CytoSorbents Reports Strong Growth in Q1 2014

                CytoSorbents Reports Strong Growth in Q1 2014

PR Newswire

MONMOUTH JUNCTION, N.J., May 14, 2014

MONMOUTH JUNCTION, N.J., May 14, 2014 /PRNewswire/ --CytoSorbents Corporation
(OTCBB: CTSO), a critical care immunotherapy company using blood purification
to treat life-threatening illnesses, reports first quarter operational and
financial results for the three months ended March 31, 2014.

CytoSorbents Logo

Achieved record total revenue and CytoSorb® sales of $1.1M and $569,000,
respectively, in Q1 2014 with continued strong momentum expected in Q2 2014

Q1 2014 Financial Highlights:

  oRecord total revenue for the first quarter of 2014 of approximately $1.1M,
    driven by increases in both product and grant income
  oAchieved record quarterly CytoSorb® sales of $569K. This represents a
    sequential 81% increase from the prior quarter product sales of $314K, and
    a 223% increase over product sales of $176K in Q1 2013
  oProduct gross margins for Q1 2014 were in excess of 60%
  oGrant income increased 152% to $491K during Q1 2014, compared to $195K in
    Q1 2013
  oSuccessfully raised $10.2M in a March 2014 financing led by Brean Capital,
    strengthening the balance sheet with $9.5M cash, net of fees and expenses,
    and providing the company with significant growth capital. As of March 31,
    2014, cash and short-term investments were approximately $11.2M
  oReceived $458K in non-dilutive funding from the New Jersey Technology
    Business Tax Certificate Transfer Program

Recent Operational Highlights:

  oExpanded CytoSorb® distribution to the Middle East, including Saudi
    Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain, and Oman (the
    Gulf Cooperation Council or GCC) and Yemen, Iraq, and Jordan through an
    exclusive agreement with Techno Orbits. Recently visited Saudi Arabia to
    train the team at Techno Orbits and to introduce the technology to one of
    the major hospitals in Saudi Arabia treating patients infected with the
    deadly MERS coronavirus
  oContinued to expand the key opinion leader base to more than 150
    physicians supporting CytoSorb® usage, with now more than 3,000 human
    treatments safely performed
  oExpanded our direct sales force to 7 direct sales representatives and 1
    clinical support specialist, and will shortly add a dedicated distributor
    support representative
  oAdvanced the U.S. clinical trial strategy with recruitment of a
    world-class cardiac surgery advisory board, hiring of a clinical trial
    manager, and development of a draft protocol for a planned cardiac surgery
    trial in the U.S.
  oPublication of a case report study describing the successful use of
    CytoSorb® in a near-fatal case of necrotizing fasciitis in the
    International Journal of Artificial Organs
  oAnnounced a research collaboration with the University of Pennsylvania
    School of Veterinary Medicine focused on potential cancer immunotherapy
    applications of CytoSorb® as well as other critical care treatments
  oExhibited at or attended eight major international healthcare conferences,
    with a focus on critical care, cardiac surgery, and other applications.
    Sponsored a well-attended CytoSorb® research symposium with four major key
    opinion leader speakers at one of the largest European critical care
    conferences, ISICEM 2014
  oReceived the Export Achievement Award by U.S. House of Representatives
    Rush Holt, awarded by the U.S. Department of Commerce and the
    International Trade Administration

Dr. Phillip Chan, MD, PhD, CEO of CytoSorbents, commented, "As an emerging
leader in critical care immunotherapy, our CytoSorb® cytokine reduction filter
is being used internationally to treat a growing number of life-threatening
conditions where uncontrolled inflammation plays a deadly role. On today's
conference call, we will briefly explore why we believe that CytoSorb® may
have benefit in the treatment of patients infected with the deadly MERS
(Middle East Respiratory Syndrome) coronavirus, that has hospitalized 538
people to date in 17 countries, killing more than 25% of those afflicted, with
now 2 documented cases in the United States. MERS coronavirus appears to be
similar, but more deadly, than the SARS (Severe Acute Respiratory Syndrome)
coronavirus that led to a global outbreak in 2003, which infected 8,098 people
and killed 774 people, according to the World Health Organization (WHO). Both
MERS and SARS lead to a severe viral pneumonia and sepsis, with a significant
elevation of cytokines documented in SARS patients. This 'cytokine storm' is
believed to increase the risk of organ failure and death in many deadly viral
infections, such as SARS and seasonal and avian flu. There is currently no
specific treatment, vaccine, or cure for MERS, and treatment has been
predominantly supportive care to date. Although we have not yet treated
patients infected with the MERS coronavirus and do not yet know if or how our
products will benefit patients infected with MERS, with our distribution and
recent users training in Saudi Arabia, we believe we are well-positioned to
have a first CytoSorb® treatment case soon."

Dr. Chan continued, "Notwithstanding new potential applications, we are
pleased with the increased adoption and usage of CytoSorb® by physicians that
are translating into solid growth in CytoSorb® sales, both direct and through
distributors. With our recent successful $10.2M financing, we believe we have
the resources to continue to execute on our multi-faceted strategy to
accelerate revenue growth and generation of clinical data that we outlined in
our Fiscal 2013 year-end investor call. CytoSorb® is now being actively
marketed in 18 countries around the world. We plan to continue our geographic
expansion, via independent distributors and/or strategic partners, into many
of the remaining 22 countries of the European Union where CytoSorb® is already
approved, and into countries outside of the E.U. that will accept E.U.
approval. These actions, and others, are expected to provide additional
catalysts to increase shareholder value ahead of our goal to up-list to a
national exchange later this year."

"Please join us on the earnings call today at 4:15PM EDT where we will cover
our progress in greater detail. The investor presentation and a written
transcript of the conference call will be available within a week of the
webcast on our website."

Conference Call Details:
Date: Wednesday, May 14, 2014
Time: 4:15 PM Eastern
Participant Dial-In: 480-629-9809
Live Presentation Webcast: http://public.viavid.com/index.php?id=109209

An archived recording of the conference call will be available under the
Investor Relations section of the Company's website at
http://www.cytosorbents.com/invest.htm

Financial Results for the First Quarter Ending March 31, 2014

For the three months ended March 31, 2014, the Company generated total revenue
of approximately $1,062,000 as compared to revenues of approximately $371,000
for the three month period ended March 31, 2013, an increase of 186%. Revenue
from product sales was approximately $569,000 in the three months ended March
31, 2014, as compared to approximately $176,000 in the three months ended
March 31, 2013, an increase of 223%. This increase in sales is the result of
the efforts of our direct sales team in Germany, as well as sales to
distributors in other parts of Europe, the Middle East, and Asia.

Grant revenue was approximately $491,000 and $195,000 for the three months
ended March 31, 2014 and 2013, respectively.

Overall, first quarter 2014 product gross margins were in excess of 60%, with
blended gross margins, including costs of grant income, of approximately 38%.

In the first quarter of 2014, we received approximately $9,451,000 in net
proceeds in connection with the registered offering of our common stock. In
addition, we received approximately $300,000 in proceeds from the sale of
2,483,399 shares of Common Stock per the Purchase Agreement with Lincoln Park
Capital in January 2014, and we received approximately $458,000 in
non-dilutive cash from the sale of our net operating losses under the New
Jersey Technology Business Tax Certificate Transfer Program.

Since inception, our operations have been primarily financed through the
private placement of our debt and equity securities. At March 31, 2014, we
had current assets of approximately $11,828,000 including cash on hand and
short-term investments of approximately $11,161,000 and current liabilities of
approximately $3,299,000. We believe we have sufficient cash to fund our
operations into 2016; however, we may need additional capital to fully fund
Pivotal trials in the United States and/or Germany. These funds could
potentially be obtained via multiple sources such as through strategic
partnerships, government-sponsored studies, or traditional equity financings.

The Company's net loss was approximately $1.0 million for the quarter ended
March 31 2014, compared to a net loss of approximately $1.6 million in the
year ago period. Cash on hand and short term investments were approximately
$11.2 million as of March 31, 2014 as compared with approximately $2.2 million
at December 31, 2013.

2014 Second Quarter Outlook

CytoSorbents has not historically given financial guidance on quarterly
results until the quarter has been completed. With Q2 2014 still ongoing, we
continue to see strong momentum in CytoSorb® usage and sales and expect Q2
2014 CytoSorb® sales to easily exceed those of Q2 2013.

About CytoSorbents

CytoSorbents Corporation is a critical care focused immunotherapy company
using blood purification to reduce uncontrolled 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®, 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 risk of death 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 U.S. patents and multiple applications pending, including
HemoDefend™, 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 within the meaning of
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements include, but are not limited to,
statements about our plans, objectives, representations and contentions 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, the risks discussed in our Annual Report on
Form 10-K, filed with the SEC on March 31, 2014, 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.



CYTOSORBENTS CORPORATION

(a development stage company)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(amounts in thousands, except per share data)
                                          Three months ended

                                          March 31,
                                          2014           2013
                                          (Unaudited)    (Unaudited)
Revenue:
 Sales                                 $ 569          $ 176
 Grant income                            491            195
 Other revenue                           2              ---
Total revenue                               1,062          371
 Cost of revenue                         662            253
Gross margin                                400            118
Other expenses:
Research and development                    237            704
Legal, financial and other consulting       310            223
Selling, general and administrative         1,007          613
Total expenses                              1,554          1,540
Loss from operations                        (1,154)        (1,422)
Other (income)/expense:
Interest expense/(income), net              137            207
Change in warrant liability                 (316)          ---
Total other (income)/expense, net           (179)          207
Loss before benefit from income taxes       (975)          (1,629)
Benefit from income taxes                   —              —
Net loss                                    (975)          (1,629)
Preferred stock dividend                    1,115          586
Net loss available to common              $ (2,090)      $ (2,215)
shareholders
Basic and diluted net loss per common     $ (0.01)       $ (0.01)
share
Weighted average number of shares of        265,479,874    222,968,576
common stock outstanding
Net loss                                  $ (975)        $ (1,629)
Other comprehensive loss:
                                            1              (2)
 Currency translation adjustment
Comprehensive loss                        $ (974)        $ (1,631)



CYTOSORBENTS CORPORATION

(a development stage company)

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)
                                                March 31,
                                                2014           December 31,
                                                (Unaudited)    2013
ASSETS


Current Assets:
Cash and cash equivalents                       $  6,416       $  2,183
Grants and accounts receivable, net                327            453
Short-term investments                             4,745          —
Inventories                                        147            246
Prepaid expenses and other current assets          193            605
Total current assets                               11,828         3,487

                                                   155            145
Property and equipment, net
Other assets                                       410            414
Total long-term assets                             565            559

                                                $  12,393      $  4,046
Total Assets




LIABILITIES AND STOCKHOLDERS' EQUITY


Current Liabilities:
Accounts payable                                $  528         $  787
Accrued expenses and other current liabilities     380            362
Deferred revenue                                   117            272
Warrant liability                                  547            —
Convertible notes payable, net of debt             1,727          1,644
discount
Total current liabilities                          3,299          3,065
Total liabilities                                  3,299          3,065
Redeemable Series B Convertible Preferred          16,353         15,246
Stock
Total stockholders' equity (deficiency)            (7,259)        (14,265)

                                                $  12,393      $  4,046
Total Liabilities and Stockholders' Equity
(Deficiency)



Logo - http://photos.prnewswire.com/prnh/20140408/MM00899LOGO

SOURCE CytoSorbents Corporation

Website: http://www.cytosorbents.com
Contact: CytoSorbents Corporation, Dr. Phillip Chan, Chief Executive Officer,
(732) 329-8885 ext. *823, pchan@cytosorbents.com, Investor Contact: Amy Vogel,
(732) 329-8885 Ext. *825, avogel@cytosorbents.com
 
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