CytoSorbents 2012 End of Year Shareholder Letter Monmouth Junction, NJ - (

CytoSorbents 2012 End of Year Shareholder Letter

Monmouth Junction, NJ - (January

9, 2013) - CytoSorbents Corporation (OTCBB:CTSO), a critical care focused company using blood purification to treat life-threatening

illnesses, issued the following letter to shareholders.

Dear Shareholders and Friends,

As we welcome 2013, it marks an opportune

time to reflect upon our many important accomplishments in the past year and to further elaborate on our vision for the future.

Our mission is to improve and save lives,

reduce spiraling healthcare costs, and increase shareholder value by driving the success of CytoSorbents. To this end, we are building

the Company upon three pillars of value.

This represents our overarching strategy

for the Company. With trailing revenues expected to be approximately in the range of $1.2-1.4 million in 2012 (unaudited results)

- a combination of primarily grant income and early product revenue - we hope that we are just at the beginning of creating

a valuable growth company.

Commercialization of

We officially launched direct sales of

CytoSorb in Germany, Austria and Switzerland in the second half of 2012. CytoSorb is approved in the E.U. as a first-in-class

extracorporeal cytokine filter to be used in any situation where cytokines are elevated. We are positioning the device as a safe

and powerful new tool to control cytokine storm, reduce uncontrolled inflammation, and potentially prevent or treat organ failure.

The launch was the culmination of a significant effort to position CytoSorbents as a commercialization focused company.

Since the first commercial availability

of the CytoSorb cytokine filter in Q4 2011, through the end of 2012, we have generated product revenues in the range of $190-$200K.

CytoSorb sales in Q4 2012 (unaudited results) are expected to be nearly half this total figure, reflecting primarily the first

full quarter that our direct sales team was active.

Going forward, we are implementing a multi-pronged

strategy for CytoSorb sales expansion. The first part focuses on direct sales in Germany, Austria and Switzerland, using our

direct sales force. The advantage of direct sales is that we intimately control the sales process, have direct contact with the

KOLs and end-users that facilitates feedback and planning, and can sell with higher gross margins. We are currently in the key

opinion leader adoption phase, where there is naturally a lag between when a KOL first agrees to use or trial the CytoSorb

filter, to when we achieve first sales, to when we can achieve broader departmental usage with reorders. That said, as we have

described before, KOL approval is one of the most important steps to driving adoption and greater usage. CytoSorb has been

generally met with enthusiasm by physicians, as little can be done today to help critically ill patients, and CytoSorb attacks

the well-known underlying causes of organ failure. This seeding of the market will hopefully help generate ongoing data and clinical

usage in many different applications.

The second phase of the strategy is to

work with distributors or strategic partners to expand the commercial footprint of CytoSorb to the rest of Europe and to other

countries that accept European regulatory approval. This will allow us to leverage their pre-established sales force and distribution

capabilities, including important KOL contacts, enabling broader CytoSorb filter sales.

By layering these two sources of revenue

with grant income from government R&D contracts, we hope to accelerate our revenue growth and time to cash flow breakeven.

If our European strategy is successful, it would provide an abundance of opportunities for the Company. We estimate that Germany

alone represents a total addressable market of at least $500 million to $1 billion for critical care applications. However, to

further drive success of the Company, we plan to pursue U.S. regulatory approval for CytoSorb . We intend to leverage our existing

FDA approved IDE application (to run a small sepsis trial), to run a larger pivotal trial in the U.S. The timing of a trial in

the U.S. is subject to many variables, and we are working through those now with the intent of conducting detailed discussions

with the FDA regarding trial design later this year. Should a pivotal trial be successful in the U.S., it could lead to U.S. FDA

approval and be yet another major catalyst to CytoSorb adoption and usage worldwide.

With each new CytoSorb treatment,

we learn more about how best to use it. In our ongoing dosing study, CytoSorb has been successfully used with continuous treatment

(each cartridge used for 24 hours) for 7 days with no serious device related events. The trial is ongoing, with additional patients

being enrolled, samples collected and data being analyzed. We are currently expanding the study to include a total of seven hospitals

in Germany, all of which are leading university hospitals that expressed an interest to join our trial. We are also using the trial

as an opportunity to answer some important questions related to treatment, which will be helpful to further guide clinical usage.

Outside of the trial, in every day clinical

practice, physicians have had generally encouraging results with CytoSorb . For example, there have been a number of cases

of septic shock and multiple organ failure where CytoSorb was used in patients with extremely high cytokine levels (e.g. IL-6

greater than 20,000 pg/ml). These patients were extremely sick with a variety of infections ranging from a Streptococcal limb infection

to suspected gram negative sepsis following complications from a gynecologic procedure. In each of these cases, the prognosis was

reportedly grim by the treating physicians. With Cytosorb treatment, IL-6 levels dropped dramatically over the course of several

days, with an eventual resolution of organ failure, and patient recovery. Based upon feedback from these physicians, they are interested

in documenting these surprising results for potential publication.

There have also been a handful of cases,

unfortunately, where CytoSorb has not been able to rescue the patient. A common theme in these treatment failures appears

to be either suboptimal usage of Cytosorb or treatment that was too late in the disease process. We cannot expect CytoSorb

to save all patients, particularly when patient's illnesses are so advanced that recovery is unlikely. That said, the more

clinical experience we gain with the technology, the better the odds of treating these patients optimally and having a better clinical

Overall, we continue to make significant

progress in our commercialization efforts and are pleased with the initial physician response and clinical experience.

Research and Development update

We continue to advance our technologies

and grow our product pipeline through investments in research and development. We have recently been awarded approximately $5M

in government contracts that help to fund these efforts.

DARPA $3.8M Contract

As part of DARPA's "Dialysis-like

Therapeutics" program to treat sepsis, we were awarded a $3.8M five-year contract in August to develop advanced polymers that

can remove not only cytokines but also a variety of bacterial and biowarfare toxins. Our technology is ideally suited for this

broad spectrum capability. In fact, we have already demonstrated the ability of CytoSorb to remove a number of these toxins

in vitro such as Staphylococcus aureus alpha toxin, a potent toxin that is responsible for cell destruction and widespread

tissue damage in Staph. aureus and methicillin resistant Staph. aureus, or MRSA, infection. MRSA is one of the leading and most

deadly hospital acquired infections. Outside of this DARPA contract, Dr. John Kellum at University of Pittsburgh has demonstrated

in an animal model of sepsis, that a reduction of cytokines by CytoSorb hemoadsorption appears to redirect the immune response

to the area of infection, helping to control it even in the absence of antibiotics, while preventing unwanted immune-mediated injury

to uninvolved, healthy organs. These new and exciting findings highlight the multi-factorial and synergistic benefit that CytoSorb

may have in these critical illnesses (i.e. reduction of cytokine storm, removal of damaging bacterial toxins, redirection of the

immune response, and others) and why we believe our technology is the best-in-class solution.

United States Army $1M Phase 2 SBIR

We are nearing the completion of our negotiations

of our $1 million Phase 2 SBIR award with the U.S. Army. Ahead of this, we have been continuing our work from the Phase I SBIR

award, and should be in a good position to make rapid progress with funding. We remain excited by the prospect of continuing to

work with the Army and obtaining efficacy data in animal models of both burn injury and trauma which, if positive, will help advance

these applications in human treatment. We are also encouraged by interest from other branches of the military in our technologies,

which may lead to other opportunities.

Business Development

One of the key goals of the Company is

to establish strategic partnerships for various products in our pipeline. We cannot commercialize all of them by ourselves, so

leveraging the expertise, financial resources, and infrastructure of dedicated partners remains a logical option. The majority

of our products under development have achieved proof-of-concept, at a bare minimum.

One of our most advanced development candidates

is our HemoDefend blood purification technology. HemoDefend is designed to remove contaminants in blood transfusion products that

can cause transfusion reactions, effectively "washing blood" without the cost, time and trouble of actually doing so.