CytoSorbents Reports Second Quarter 2022 Financial and Operational Results PRINCETON, N.J.

CytoSorbents Reports Second Quarter 2022 Financial

and Operational Results

PRINCETON, N.J., August

2, 2022 - CytoSorbents Corporation (NASDAQ: CTSO), a leader in the treatment of life-threatening

conditions in the intensive care unit and cardiac surgery using blood purification via its proprietary polymer adsorption technology,

today reported unaudited financial and operating results for the quarter ended June 30, 2022.

Second Quarter 2022 Financial Results

Recent Operating Highlights:

Dr. Phillip Chan, Chief Executive Officer of CytoSorbents

stated, "Our second quarter core non-COVID product sales on a constant currency basis were $8.2 million and stable to the average

currency adjusted core product sales for the prior three quarters. Although not the growth we are seeking, we achieved this despite continued

softness in the German market, as the weakened healthcare system worked to recover from the massive COVID surge in the prior quarter and

grappled with a myriad of problems. These include, for example, staffing shortages, budget issues, elective procedures restrictions, and

a major 11-week hospital strike in western Germany that spanned a fifth of the population, postponing more than 10,000 operations and

closing hospital wards. Year-over-year results were further impacted by a lack of COVID-19 related revenue due to a lessening in disease

severity globally, and a drop of 12% in the Euro, to near parity with the U.S. dollar.

"Like most international companies, including

those in the medical device and blood purification industries, we are dealing with not only fallout from the COVID pandemic, but also

a storm of global macroeconomic and geopolitical uncertainty. That said, although our numbers do not yet reflect it, we are seeing some

early but encouraging signs of improvement in key markets:

Dr. Chan continued, "As we work to restore

sales growth, we continue to advance our other key initiatives.

Dr. Chan concluded, "We are excited about

the many opportunities that we have to drive our business forward, but are proceeding conservatively, recognizing there is a seasonality

to European business in general in the third quarter, driven by a lull in business activity as much of Europe takes vacation in July and

August. Because of this, we are focused on executing our game plan, while controlling costs and conserving cash. We believe the high cash

burn in Q2 2022 was an anomaly with a number of non-recurrent expenditures. These include, for example, the final $4.8 million payment

related to the construction, capital equipment, and other costs of our new manufacturing facility (with the exception of approximately

$300K in costs for the remainder of 2022), an approximate $1 million reduction in gross margin driven mainly by inefficiencies caused

by scheduled production shutdowns associated with the relocation to our new manufacturing facilities, and lower sales volumes, and a $0.6

million increase in grant and accounts receivables during the quarter. Excluding these factors, our cash burn for Q2 2022 would have been

approximately $6.5 million."

In addition, we have $5 million (based

on cost of goods) in working capital tied up in CytoSorb inventory that we have strategically built over several quarters to buffer against

any potential disruption in production with the transition to the new facility. With fairly good visibility that the new manufacturing

facility will come on-line as expected, we plan to release and monetize a portion of this inventory, which we expect could contribute

an additional $1 million to our second half 2022 cash flow. Finally, we retain financial flexibility to add debt from our $15 million

term loan with Bridge Bank if desired."

Results of Operations

Comparison for the three months ended June 30, 2022 and 2021:

Total revenue, including product revenue and grant

income, for the second quarter of 2022 was $8.5 million, down 39% from $12.0 million in the second quarter of 2021. Revenue from product

sales was approximately $7.3 million in the three months ended June 30, 2022, as compared to approximately $11.4 in the three months ended

June 30, 2021, a decrease of approximately $4.0 million, or 36%. The decrease in the average exchange rate of the Euro to the U.S. dollar

negatively impacted 2022 product sales by approximately $0.8 million. For the three months ended June 30, 2022, the average exchange rate

of the Euro to the U.S. dollar was $1.06 as compared to an average exchange rate of $1.21 for the three months ended June 30, 2021. We

estimate that demand for CytoSorb to treat COVID-19 patients was de minimis in the second quarter of 2022 as compared to approximately

$1.7 million in the second quarter of 2021. Overall direct sales declined by approximately $3.4 million resulting primarily from lower

sales in Germany due to COVID-19 pandemic-driven market conditions. COVID-19 restrictions remain in place at many hospitals throughout

Germany and these restrictions continue to limit our access to hospital personnel, particularly the physicians.

For the three months ended June 30, 2022 and 2021,

cost of revenue was approximately $3.6 million and $2.7 million, respectively. Product gross margins were approximately 67% for the three

months ended June 30, 2022 as compared to approximately 82% for the three months ended June 30, 2021. The decrease in the gross margin

percentage in 2022 was due primarily to inefficiencies associated with relocation of our production activities to our new manufacturing

facility during the second quarter of 2022.

For the three months ended June 30, 2022, operating

expenses were approximately $13.3 million, as compared to approximately $14.2 million for the three months ended June 30, 2021, a decrease

of approximately $0.9 million or 6%. Selling, general and administrative (SG&A) expenses decreased approximately 14% to $8.4 million

in the quarter from $9.8 million in the prior year. This decrease was due to a decrease in royalty expenses of approximately $0.4 million

due to the decrease in product sales, a decrease in non-cash restricted stock expense of approximately $1.5 million related to restricted

stock units granted to the Company's executive officers and a decrease in non-cash stock compensation expense of approximately

$0.8 million. This was offset by increases in salaries, commissions, and related costs of approximately $0.2 million, an increase in

sales and marketing costs, which include advertising and conference attendance of approximately $0.4 million, an increase in travel and

entertainment costs of approximately $0.3 million and an increase in occupancy costs of approximately $0.4 million related to the rent

expense on our new manufacturing facility. Research and development expenses increased by approximately $0.5 million primarily due to

costs related to our STAR-T and STAR-D trials in the United States.

Gain (Loss) on Foreign Currency Transactions:

For the three months ended June 30, 2022, the

loss on foreign currency transactions was approximately $2.5 million as compared to a gain of approximately $0.2 million for the three

months ended June 30, 2021. The 2022 loss was directly related to the decrease in the spot exchange rate of the Euro to the U.S. dollar

at June 30, 2022 as compared to March 31, 2022. The spot exchange rate of the Euro to the U.S. dollar was $1.05 per Euro at June 30, 2022,

as compared to $1.11 per Euro at March 31, 2022.

Comparison for the six months ended June 30, 2022 and 2021:

Total revenues were approximately $17.2 million

for the six months ended June 30, 2022, as compared to total revenues of approximately $22.6 million for the six months ended June 30,

2021, a decrease of approximately $5.4 million, or 24%. Revenue from product sales was approximately $15.3 million in the six months ended

June 30, 2022, as compared to approximately $21.5 million in the six months ended June 30, 2021, a decrease of approximately $6.2 million

or 29%. The decrease in the average exchange rate of the Euro to the U.S. dollar negatively impacted 2022 product sales by approximately

$1.4 million. For the six months ended June 30, 2022, the average exchange rate of the Euro to the U.S. dollar was $1.09 as compared to

an average exchange rate of $1.21 for the six months ended June 30, 2021. Though difficult to quantify, we estimate that approximately

$0.3 million of total product sales in the six months ended June 30, 2022 was due to the demand for CytoSorb to treat COVID-19 patients

as compared to $3.5 million in the six months ended June 30, 2021. Overall direct sales declined by of approximately $5.4 million resulting

primarily from lower sales in Germany due to COVID-19 pandemic-driven market conditions. COVID-19 restrictions remain in place at many

hospitals throughout Germany and these restrictions continue to limit our access to hospital personnel, particularly the physicians.

For the six months ended June 30, 2022 and 2021,

cost of revenue was approximately $5.8 million and $5.5 million, respectively, an increase of approximately $0.3 million. Product gross

margins were approximately 74% for the six months ended June 30, 2022 and approximately 79% for the six months ended June 30, 2021. The

reduction in product gross margin is due primarily to inefficiencies associated with the relocation of our production activities to our

new manufacturing facility during the second quarter of 2022.

For the six months ended June 30, 2022, operating

expenses were approximately $27.5 million as compared to approximately $24.9 million for the six months ended June 30, 2021, an increase

of approximately $2.6 million, or 10%, for the six months ended June 30, 2022. Research and development expenses were approximately $8.4

million as compared to approximately $6.0 million for the six months ended June 30, 2021, an increase of approximately $2.4 million or

40%. This increase was due to an increase in costs associated with our STAR-T and STAR-D trials in the United States. Selling, general

and administrative expenses were approximately $17.6 million for the six months ended June 30, 2022, as compared to $17.5 million for

the six months ended June 30, 2021, an increase of $0.1 million. This increase is related to an increase in salaries, commissions and

related costs of approximately $1.2 million, an increase in sales and marketing costs, which include advertising and conference attendance

of approximately $0.7 million, an increase in travel and entertainment costs of approximately $0.5 million and an increase in occupancy

costs of approximately $0.7 million related to the rent expense on our new manufacturing facility. These increases were offset by a decrease

in royalty expenses of approximately $0.5 million, a decrease in non-cash restricted stock expense of approximately $1.7 million related