CytoSorbents Achieves Strong Third Quarter 2013 Revenue Growth

CytoSorbents Achieves Strong Third Quarter 2013 Revenue Growth 
MONMOUTH JUNCTION, NJ -- (Marketwired) -- 11/06/13 --  CytoSorbents
Corporation (OTCQB: CTSO), a critical care focused company
commercializing its European Union approved CytoSorb(R) blood filter
to treat life-threatening illnesses in the intensive care unit,
provides a corporate update and reports its financial results for the
three and nine month periods ending September 30, 2013. 
Financial Highlights: 


 
--  Record total quarterly revenue of approximately $881,000 in Q3 2013,
    fueled by strong commercial sales of CytoSorb(R) and grant income
--  Solid increase in CytoSorb(R) sales to approximately $204,000 in Q3
    2013, compared to approximately $14,000 in Q3 2012, and sequentially
    59% higher than in Q2 2013
--  After the commercial launch of CytoSorb(R) in the second half of
    2012, we have now achieved trailing twelve month product sales of
    approximately $600,000
--  Gross profit margin on product revenue increased to 71% in Q3 2013,
    from 61% in the previous quarter, reflecting an increase in higher
    margin direct sales
--  Cash balance of $2.9 million at the end of the third quarter
    (including $580,000 of cash from convertible notes closed in the
    September 30, 2013 note, but received in October 2013), and the
    receipt of approximately $1,060,000 in grant funding during the
    quarter
--  Strong momentum of CytoSorb(R) sales in early Q4 2013 with
    expectation of a record fiscal 2013

  
Operational Progress 


 
--  Focused on deeper penetration into existing direct accounts, spurring
    increased awareness and usage of CytoSorb(R)
--  Expanded our direct sales force to 5 sales representatives and one
    clinical support person. We expect to have a sales team of 7 sales
    reps and one support person by year end
--  Inked an exclusive strategic partnership with Biocon, India's largest
    biotechnology company, with initial distribution in India and select
    emerging markets. Biocon is putting significant resources into
    training and market development and we anticipate 2013 revenue
--  Growth in post-market investigator initiated studies from 18 to now
    26, in the areas of sepsis, cardiac surgery, lung injury, kidney
 
   injury, trauma, and liver failure. Three studies have already begun
    enrollment, with the others either pending ethics approval or in the
    planning phase. Data is expected from several of the initial studies
    in the first half of 2014, which if positive, are anticipated to help
    drive additional CytoSorb(R) usage
--  Increased market presence with the publication and presentation of
    data from case report studies using CytoSorb(R) and exhibition at
    major critical care conferences
--  Observing strong activity around cardiac surgery applications with
    many positive case reports and more than 8 investigator initiated
    studies either starting or being planned
--  Dosing study enrollment has accelerated with 8 major trial sites with
    at least an interim data analysis by the end of 2013
--  External validation of our HemoDefend(TM) platform with announcement
    of a $200K Phase I SBIR award from NIH/NHLBI (National Institutes of
    Health and National Heart, Lung and Blood Institute)
--  Proud corporate sponsor of World Sepsis Day, hosted by the Global
    Sepsis Alliance, and the Sepsis Heroes Gala, hosted by the Sepsis
    Alliance

  
Dr. Phillip Chan, Chief Executive Officer of CytoSorbents, stated, "In
the third quarter, we achieved the highest quarterly revenue in the
history of the company based upon solid execution of our CytoSorb(R)
commercialization strategy and steady progress in Year 2 and Phase II
of our DARPA and US Army SBIR programs, respectively."  
"As our direct sales strategy transitions from the key opinion leader
phase to driving more extensive departmental usage of CytoSorb(R), we
are pleased with the growing number of physicians using our therapy,
and the direct effect this has on higher CytoSorb(R) sales. In our
direct sales territories of Germany, Austria and Switzerland, we
currently have a number of hospitals that we anticipate will soon
become 'reference accounts' for us. These hospitals are generating
steadily increasing CytoSorb(R) orders because each has an expanding
group of physicians having success with CytoSorb(R) treatment, that
spans multiple departments such as the surgical ICU (SICU), medical
ICU (MICU), and surgery departments. This is beginning to add a level
of improved visibility on future product sales that we didn't have
before. 
"In addition to continued momentum in critical care applications such
as sepsis, we are seeing increasing interest and usage during cardiac
surgery, where our CytoSorb(R) cartridge is finding early success in
either treating or reducing the risk of developing severe
inflammation that is common in the more than 1 million surgeries done
each year in the US and Europe. Unlike any other therapy, CytoSorb(R)
is uniquely and ideally suited for cardiac surgery, which may
potentially become a lucrative market if we can establish CytoSorb(R)
as standard of care." 
Dr. Chan concluded, "We believe we have only been scratching at the
surface of the critical care and surgery opportunity for CytoSorb(R).
With our dedicated team and international partners, we continue to
execute on our strategy of growth that is focused on: 


 
--  Driving direct sales in Germany, Austria and Switzerland
--  Augmenting direct sales with revenue from an increasing number of
    distributors and strategic partners worldwide
--  Generating pivotal data in certain key applications such as sepsis, to
    seek U.S. FDA approval and to eventually make CytoSorb(R) a
    universally reimbursable standard of care therapy
--  Fostering more clinical data via investigator initiated studies,
    published case reports, and conference presentations, to expand the
    breadth of clinical usage for CytoSorb(R)
--  Investing in business development and research and development, to
    help monetize our rich technology portfolio
--  And finally, ensuring that we have the resources to execute on this
    broad-reaching strategy."

  
Financial Results for the Third Quarter Ended September 30, 2013: 
CytoSorbents generated revenues of approximately $881,000 and
$605,000 for the three months ending September 30, 2013 and September
30, 2012, respectively. Product revenues were approximately $204,000
for the quarter ended September 30, 2013, as compared to product
revenues of approximately $14,000 for the three months ended
September 30, 2012. Product gross margins were approximately 71% for
the quarter ended September 30, 2013. Additionally, grant revenue and
other income approximated $677,000 and $591,000 for the three month
periods ended September 30, 2013 and 2012, respectively. 
Our net loss for the three months ending September 30, 2013 was
approximately $1,490,000 or $(0.01) per common share as compared to a
net loss of approximately $1,282,000 or $(0.01) per common share for
the three months ended September 30, 2012. 
On September 30, 2013 our cash balances were approximately $2,350,000
as compared to cash balances of approximately $1,729,000 as of
December 31, 2012. In early October 2013, we received an additional
$580,000 in cash proceeds from the sale of our 8% convertible notes
that closed on September 30, 2013. 
Financial Results for the Nine Months Ended September 30, 2013:
 For
the nine months ended Septembe
r 30, 2013, the Company generated
revenue of approximately $1,544,000 as compared to revenues of
approximately $739,000 for the nine months ended September 30, 2012,
an increase of 109%. Revenue from product sales was approximately
$508,000 in the first nine months of 2013, as compared to
approximately $64,000 in the first nine months ended September 30,
2012, an increase of 698%. This increase in product sales is a result
of our direct sales force as well as sales to distributors in other
parts of Europe and the Middle East. Product gross margins were
approximately 64% for the nine months ended September 30, 2013.
Revenue from grants was approximately $1,036,000 in the nine months
ended September 30, 2013, as compared to approximately $675,000 in
the first nine months of 2012. 
Our net loss for the nine months ended September 30, 2013 was
approximately $5,737,000 or $(0.02) per common share as compared to a
net loss of approximately $4,997,000 or $(0.03) per common share for
the nine months ended September 30, 2012. 
For additional information please see the Company's 10-Q report for
the period ended September 30, 2013 filed on November 6, 2013 on
http://www.sec.gov. 
About CytoSorbents Corporation 
 CytoSorbents is a critical care
focused therapeutic device company using blood purification to
modulate inflammation -- with the goal of preventing or treating
multiple organ failure in life-threatening illnesses. Organ failure
is the cause of nearly half of all deaths in the intensive care unit,
with little to improve clinical outcome. CytoSorb(R), the Company's
flagship product, is approved in the European Union as a safe and
effective extracorporeal cytokine filter, designed to reduce the
"cytokine storm" that could otherwise cause massive inflammation,
organ failure and death in common critical illnesses such as sepsis,
burn injury, trauma, lung injury, and pancreatitis. These are
conditions where the mortality is extremely high, yet no effective
treatments exist. CytoSorbents' 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. CytoSorbents has numerous products
under development based upon this unique blood purification
technology, protected by 32 issued US patents and multiple
applications pending, including HemoDefend(TM), ContrastSorb,
DrugSorb, and others. Additional information is available for
download on the Company's website: http://www.cytosorbents.com 
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. Forward-looking statements in this press release
are not promises or guarantees and are subject to risks and
uncertainties that could cause our actual results to differ
materially from those anticipated. These statements are based on
management's current expectations and assumptions and are naturally
subject to uncertainty and changes in circumstances. We caution you
not to place undue reliance upon any such forward-looking statements.
Actual results may differ materially from those expressed or implied
by the statements herein. Risk factors are detailed in the Company's
Form 10-K filed with the SEC on April 3, 2013, which is available at
http://www.sec.gov. 


 
                                                                            
                          CYTOSORBENTS CORPORATION                          
                       (a development stage company)                        
   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS   
               (amounts in thousands, except per share data)                
                                                                            
                          Nine months ended          Three months ended     
                            September 30,               September 30,       
                         2013          2012          2013          2012     
                     ------------  ------------  ------------  ------------ 
                      (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
                     ------------  ------------  ------------  ------------ 
Revenue:                                                                    
  Sales              $        508  $         64  $        204  $         14 
  Grant and other                                                           
   income                   1,036           675           677           591 
                     ------------  ------------  ------------  ------------ 
Total revenues              1,544           739           881           605 
                                                                            
Cost of revenue             1,074           261           621           142 
                     ------------  ------------  ------------  ------------ 
                                                                            
Gross profit                  470           478           260           463 
                                                                            
Expenses:                                                                   
  Research and                                                              
   development              1,707         1,854           294           554 
  Legal, financial                                                          
   and other                                                                
   consulting                 570           386           158           151 
  Selling, general                                                          
   and                                                                      
   administrative           1,902           916           688           360 
                     ------------  ------------  ------------  ------------ 
Total operating                                                             
 costs and expenses         4,179         3,156         1,140         1,065 
                                                                            
                                                                            
Operating loss             (3,709)       (2,678)         (880)         (602)
Other expenses, net           300           448            85            50 
                     ------------  ------------  ------------  ------------ 
Net loss                   (4,009)       (3,126)         (965)         (652)
Preferred stock                                                             
 dividend                   1,728         1,871           525           630 
                     ------------  ------------  ------------  ------------ 
Net loss available                                                          
 to common                                                                  
 shareholders        $     (5,737) $     (4,997) $     (1,490) $     (1,282)
                     ============  ============  ============  ============ 
Earnings per share:                                                         
  Basic and diluted                                                         
   earnings per                             
                                
   share             $      (0.02) $      (0.03) $      (0.01) $      (0.01)
  Basic and diluted                                                         
   weighted average                                                         
   shares                                                                   
   outstanding        232,426,316   193,383,650   242,512,486   204,438,894 
                     ============  ============  ============  ============ 
                                                                            
                                                                            
Net loss             $     (4,009) $     (3,126) $       (965) $       (652)
Other comprehensive                                                         
 loss:                                                                      
  Currency                                                                  
   translation                                                              
   adjustment                  37            --           (40)           -- 
                     ------------  ------------  ------------  ------------ 
Comprehensive loss   $     (3,972) $     (3,126) $       (925) $       (652)
                     ============  ============  ============  ============ 
                                                                            
                                                                            
                                                                            
                          CYTOSORBENTS CORPORATION                          
                       (a development stage company)                        
                   CONDENSED CONSOLIDATED BALANCE SHEETS                    
                           (amounts in thousands)                           
                                                September 30,               
                                                     2013      December 31, 
                                                 (Unaudited)       2012     
                                                -------------  ------------ 
ASSETS:                                                                     
Cash and cash equivalents                       $       2,350  $      1,729 
Accounts receivable, net                                  194            52 
Inventories                                               362           683 
Prepaid expenses and other current assets                 738           476 
                                                -------------  ------------ 
Total current assets                                    3,644         2,940 
                                                                            
Property and equipment, net                               144           145 
Other assets                                              251           254 
                                                -------------  ------------ 
TOTAL ASSETS                                    $       4,039  $      3,339 
                                                =============  ============ 
                                                                            
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
Accounts payable                                $         572  $        801 
Accrued expenses and other current liabilities            496           349 
Deferred revenue                                          436            -- 
Convertible notes payable, net                          1,562           926 
                                                -------------  ------------ 
Total current liabilities                               3,066         2,076 
                                                -------------  ------------ 
                                                                            
TOTAL LIABILITIES                                       3,066         2,076 
                                                                            
                                                                            
Redeemable Series B Convertible Preferred Stock        14,583        12,888 
                                                                            
                                                                            
Total stockholders' equity                            (13,610)      (11,625)
                                                -------------  ------------ 
                                                                            
                                                                            
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY      $       4,039  $      3,339 
                                                =============  ============ 

  
Company Contact: 
CytoSorbents Corporation
Dr. Phillip Chan
Chief Executive Officer 
(732) 329-8885 ext. *823
pchan@cytosorbents.com 
Investor Contact: 
Alliance Advisors, LLC
Alan Sheinwald 
(914) 669-0222
asheinwald@allianceadvisors.net
Valter Pinto 
(914) 669-0222 x201
valter@allianceadvisors.net 
Media Contact: 
JQA Partners
Jules Abraham 
(917) 885-7378
jabraham@jqapartners.com