CytoSorbents Corporation (OTCBB: CTSO) Q3 2014 Earnings and Operating Results Conference Call

CytoSorbents Corporation (OTCBB: CTSO)

Q3 2014 Earnings and Operating Results

November 12, 2014 @ 4:15 pm Eastern

This official company transcript has been edited for clarity

and does not differ materially from the actual conference call. Slide numbers have been inserted to allow readers to follow along

with the associated presentation.

Good day, everyone and welcome to the CytoSorbents

2014 Third Quarter Financial and Operating Results Conference Call. Today's call is being recorded and at this time I'd

like to turn the conference over to our moderator, Amy Vogel. Please go ahead, Amy.

Amy Vogel - Moderator:

Thank you operator and good afternoon.

Welcome to CytoSorbents Third Quarter 2014 Operating and Financial Results Conference Call. With us today are:

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 November 12, 2014 and the Company assumes no obligation to update these

projections in the future as market conditions change.

During today's conference call, we

will first have an overview presentation covering the financial and operational highlights for the quarter by Dr. Chan and Ms.

Bloch. We again have taken everyone's submitted questions and will do our best to address them in the presentation, and also

in the Q&A session with management to follow. Thanks everyone again for participating. If we do not answer your question, we

would ask that you contact the Company directly after the call today.

At this time, I would like to turn the

call over to Dr. Phillip Chan. Please go ahead Dr. Chan.

Thank you very much, Amy, and thank you

everyone for joining the call today. It's a pleasure to be here and welcome. As usual, following a short introduction for new and

potential investors with some recent operational highlights, Kathy will go over our financial progress for the third quarter of

2014. We will then discuss at length our plan to up-list to the NASDAQ Capital Market, answer some frequently asked questions and

review the actions for which we are seeking shareholder consent. Then the rest of the management team will have their remarks that

incorporate answers to many of the questions we have received from our analysts and shareholders. An official transcript of today's

call will be available in the next few days on our website at www.cytosorbents.com.

Slide 4: If we can fast-forward

to Slide 4. CytoSorbents is an emerging leader in the $20 billion critical care immunotherapy space and we are leading the prevention

or treatment of life threatening inflammation in the intensive care unit.

Slide 5: Most of us know that inflammation

plays a protective role in the body, protecting us against injury and infection. But most of us may not know that inflammation

actually plays a significant detrimental role in nearly every known disease. These can be life-threatening conditions like sepsis

and trauma, autoimmune diseases like rheumatoid arthritis and psoriasis, heart disease, peripheral artery disease, cancer, cancer

cachexia, neurodegenerative diseases such as Alzheimer's and multiple sclerosis, and many others. The problem is that uncontrolled

inflammation wreaks havoc on the body and can be deadly.

Slide 6: The problem is that severe,

uncontrolled inflammation can lead to organ failure. Organ failure occurs when vital organs like the lungs, the heart, the kidneys,

or the liver stops working, which is incompatible with life. Organ failure causes nearly half of all deaths in the ICU today, but

little can be done to treat or prevent it. And that is where we come in.

Slide 7: CytoSorb removes the

fuel to the fire of inflammation and represents a powerful immunotherapy tool to control inflammation. CytoSorb is approved

in the European Union as the only specifically approved extracorporeal cytokine filter and is clinically proven to reduce key cytokines

in blood in critically-ill patients. CytoSorb is approved for use in any situation where cytokines are elevated and has also

been safe in more than 3,500 human treatments, with no serious device related adverse events reported.

Slide 8: The heart of our technology

is a highly biocompatible, very porous, state-of-the-art polymer bead that acts like a tiny sponge to remove harmful substances

from blood. If you magnify these beads up close, they are roughly the size of a grain of salt and each bead has millions of pores

and channels that are capable of removing substances from blood. Big things like cells cannot get into the pores and go around

the beads, very small things go through the beads, but appropriately sized molecules will get trapped in the vast network of pores

and channels in every single bead and permanently eliminated from blood. Our technology is protected by 32 issued U.S. patents

and multiple applications pending. We manufacture these beads at our ISO 13485 certified facility in New Jersey, and our beads

are one of the highest-grade medical sorbents on the medical market today.

Slide 9: The goal of CytoSorb

is to try to prevent or treat organ failure, the leading cause of death in the intensive care unit. Our goal is to hopefully help

stabilize patients while improving patient outcome and survival while decreasing the costs of ICU and patient care. Because we

sit at the nexus of inflammation in so many of the diseases that you see in this slide as well as many others, we truly believe

that we have the potential to revolutionize critical care medicine.

Slide 10: CytoSorb is available

for sale in all 28 countries of the European Union and is currently marketed in 19 countries around the world. We sell the product

direct in Germany, Austria and Switzerland with our direct sales force, and we have now established distribution in the U.K., Ireland,

Netherlands, Turkey, Russia, India, Taiwan, and most of the countries of the Middle East, covering a total of approximately 1.7

billion lives. We are currently expanding to other EU countries and countries outside the EU that will accept CE mark approval.

I am pleased to say that we have now achieved registration of CytoSorb in Saudi Arabia and are now waiting formal Saudi FDA

approval following some initial field tests by the Ministry of Health.

Slide 11: We have also been fortunate

to have received a tremendous amount of government support for our technology. More than $15 million in federal funding has gone

into the development of this technology. First of all, DARPA, which is the leading research funding agency of the Department of

Defense that has been responsible for funding such innovations as the Internet, global positioning satellites, robotic surgery

and wheelchairs that can climb stairs, awarded us a $3.8 million five-year contract as part of their Dialysis-Like Therapeutics

program to treat sepsis and they have tasked us with removing cytokines and pathogen derived toxins. We are currently in year three

The U.S. Army also awarded us a Phase I

and Phase II SBIR contract valued at $1.15 million for trauma and burn injury research with our technology. The U.S. Air Force

is funding a 30-patient randomized controlled human pilot study in trauma and rhabdomyolysis valued at $3 million. This FDA approved

trial has begun enrollment. The U.S. Department of Health and Human Services awarded us a $0.5 million grant because of the potential

of our technology to save lives and reduce cost under the QTDP program. One of our major collaborators at University of Pittsburgh

received a $7 million five-year grant from the NIH to pursue innovations around our technology for the treatment of sepsis. And

last but not least, we were awarded a Phase I SBIR grant by NHLBI, the National Heart, Lung and Blood Institute, to advance our

HemoDefend platform for the purification of blood transfusion products, to try to improve the quality and safety of blood transfusions.

Slide 12: Now more recently, we

were the winner of the GREAT Tech awards. In October, CytoSorbents was awarded the United Kingdom GREAT Tech award for Health,

sponsored by United Kingdom Trade and Investment and the British Consulate New York. The GREAT Tech awards selected one winner

from each of six categories from a pool of more than 130 high growth companies from New York, New Jersey, Pennsylvania and Connecticut,

and we were recognized for our innovative and potentially revolutionary blood purification technology that could help save lives

and reduce the high cost of ICU care. As part of the award, the Company will receive assistance, access and resources to further

expand into the U.K. with its distribution partner, LINC Medical. The importance of this award is that the United Kingdom is the

third largest medical device market in the European Union.

Slide 13: We also were pleased to

have launched the International CytoSorb Registry that is now available in both English and German, and is currently active

with registrants that are submitting their data online. The English version is currently under beta testing and will go live in

Slide 14: We also established a

world class Cardiac Surgery Advisory Board in the United States. It consists of major leaders in the area of cardiac surgery from

around the country in such places as University of Kentucky, University of Michigan, Texas Children's Hospital in Houston,