CytoSorbents Reports Third Quarter 2019 Financial Results

Reports Third Quarter 2019 Financial Results

JUNCTION, N.J., November 5, 2019 - CytoSorbents Corporation (NASDAQ: CTSO), a critical care immunotherapy leader

using its CytoSorb blood purification technology to treat deadly inflammation in critically-ill and cardiac surgery

patients around the world, reports financial and operational results for the quarter ending September 30, 2019.

Third Quarter 2019 Financial

Quarter 2019 Operational Highlights:

Chan, Chief Executive Officer of CytoSorbents stated, "Product sales for the third quarter were just shy of our record Q2

2019 results, despite the summer seasonality and foreign exchange effects. In addition, our blended product gross margins were

77%, nearing our guidance of achieving 80% blended product gross margins on a quarterly basis this year. Though encouraging, we

expect the growth in 2020 to be far more robust, driven by a number of important catalysts. Importantly, we have the following

Dr. Chan continued, "We expect

a solid finish to 2019, consistent with our prior guidance that 2H 2019 will be stronger than 1H 2019 and current guidance that

Q4 2019 product sales will exceed those in Q4 2018. More importantly, we believe the pieces that we have labored to put into place

positions us well to return to more aggressive sales growth of CytoSorb in 2020 and beyond as the leader in this space. In the

meantime, we remain committed to our clinical trials program, intended to drive CytoSorb as standard of care in multiple applications."

"Please join us on our earnings

conference call today, details for which are below."

Conference Call Details:

Dial-In: 877-451-6152

Live Presentation Webcast: http://public.viavid.com/index.php?id=136487

that participants dial in approximately 10 minutes prior to the start of the call. There will also be a simultaneous live webcast

of the conference call that can be accessed through the following audio feed link: http://public.viavid.com/index.php?id=136487

recording of the conference call will be available under the Investor Relations section of the Company's website at http://cytosorbents.com/investor-relations/financial-results/.

for the three months ended September 30, 2019 and 2018:

product sales was approximately $5,728,000 for the three months ended September 30, 2019, as compared to approximately $5,103,000

for the three months ended September 30, 2018, an increase of approximately $625,000, or 12%. This increase was driven by an increase

in direct sales of approximately $891,000 resulting from sales to both new customers and repeat orders from existing customers,

offset by a decrease in distributor sales of approximately $266,000. In addition, sales were negatively impacted by approximately

$239,000 as a result of the decrease in the average exchange rate of the Euro to the U.S. dollar. For the three months ended September

30, 2019, the average exchange rate of the Euro to the U.S. dollar was $1.11 as compared to an average exchange rate of $1.16

for the three months ended September 30, 2018.

was approximately $367,000 for the three months ended September 30, 2019 as compared to approximately $640,000 for the three months

ended September 30, 2018, a decrease of approximately $273,000 or 43%. This decrease was a result of the completion of certain

grants prior to the three months ended September 30, 2019 and timing of certain other grant revenue.

were approximately $6,095,000 for the three months ended September 30, 2019, as compared to total revenues of approximately $5,743,000

for the three months ended September 30, 2018, an increase of approximately $352,000, or 6%.

months ended September 30, 2019 and 2018, cost of revenue was approximately $1,696,000 and $2,053,000, respectively, a decrease

of approximately $357,000. Product cost of revenues decreased approximately $66,000 during the three months ended September 30,

2019 as compared to the three months ended September 30, 2018 due to achieved production efficiencies. Product gross margins were

approximately 77% for the three months ended September 30, 2019 and approximately 72% for the three months ended September 30,

and Development Expenses:

months ended September 30, 2019, research and development expenses were approximately $3,185,000 as compared to research and development

expenses of approximately $1,943,000 for the three months ended September 30, 2018. The increase of approximately $1,242,000 was

due to an increase in clinical trial and related costs of approximately $863,000, which includes expenditures related to our REFRESH

2-AKI study, decreases in direct labor and other costs being deployed toward grant-funded activities of approximately $290,000,

which had the effect of increasing the amount of our non-reimbursable research and development costs and an increase in non-clinical

research and development salary related costs of approximately $104,000.

Financial and Other Consulting Expense:

and other consulting expenses were approximately $733,000 for the three months ended September 30, 2019, as compared to approximately

$417,000 for the three months ended September 30, 2018. The increase of approximately $316,000 was due to an increase in legal

fees of approximately $147,000 related to patent matters and certain corporate initiatives and an increase in employment agency

fees of approximately $222,000 related to the hiring of senior level personnel. These increases were offset by a decrease in accounting

fees of approximately $37,000 and a decrease in consulting fees of approximately $16,000.

General and Administrative Expense:

and administrative expenses were approximately $6,108,000 for the three months ended September 30, 2019, as compared to approximately

$4,041,000 for the three months ending September 30, 2018, an increase of $2,067,000. This increase is related to an increase

in salaries, commissions and related costs of approximately $613,000, additional sales and marketing costs, which include advertising

and conferences of approximately $462,000, an increase in royalty expenses of approximately $46,000 due to the increase in product

sales, an increase in non-cash stock compensation of approximately $529,000 related to options granted and an increase in restricted

stock expense of approximately $481,000 related to restricted stock units granted to the Company executive officers.

months ended September 30, 2019, interest expense was approximately $302,000, as compared to interest expense of approximately

$185,000 for the three months ended September 30, 2018. This increase in interest expense of approximately $117,000 was primarily

a result of the additional interest incurred related to the draw down of the $5,000,000 Term B Loan with Bridge Bank on July 31,

(Loss) on Foreign Currency Transactions:

months ended September 30, 2019, the non-cash loss on foreign currency transactions was approximately $956,000 as compared to

a loss of approximately $109,000 for the three months ended September 30, 2018. The 2019 loss was directly related to the decrease

in the spot exchange rate of the Euro to the U.S. dollar at September 30, 2019 as compared to June 30, 2019. The spot exchange

rate of the Euro to the U.S. dollar was $1.09 per Euro at September 30, 2019, as compared to $1.14 per Euro at June 30, 2019.

The 2018 loss is directly related to the decrease in the exchange rate of the Euro to the U.S. dollar at September 30, 2018 as

compared to June 30, 2018. The exchange rate of the Euro to the U.S. dollar was $1.16 per Euro at September 30, 2018, as compared

to $1.17 per Euro at June 30, 2018.

Comparison for the nine months

ended September 30, 2019 and 2018:

product sales was approximately $16,155,000 for the nine months ended September 30, 2019, as compared to approximately $14,782,000

for the nine months ended September 30, 2018, an increase of approximately $1,373,000, or 9%. This increase was driven by an increase

in direct sales of approximately $2,053,000 resulting from sales to both new customers and repeat orders from existing customers,

offset by a decrease in distributor sales of approximately $680,000. In addition, sales were negatively impacted by approximately

$977,000 as a result of the decrease in the average exchange rate of the Euro to the U.S. dollar. For the nine months ended September

30, 2019, the average exchange rate of the Euro to the U.S. dollar was $1.12 as compared to an average exchange rate of $1.19

for the nine months ended September 30, 2018.

was approximately $1,364,000 for the nine months ended September 30, 2019 as compared to approximately $1,641,000 for the nine

months ended September 30, 2018, a decrease of approximately $277,000 or 17%.

were approximately $17,519,000 for the nine months ended September 30, 2019, as compared to total revenues of approximately $16,423,000

for the nine months ended September 30, 2018, an increase of approximately $1,096,000, or 7%.

months ended September 30, 2019 and 2018, cost of revenue was approximately $5,269,000 and $5,406,000, respectively, a decrease

of approximately $137,000. Product cost of revenues increased approximately $17,000 during the nine months ended September 30,

2019 as compared to the nine months ended September 30, 2018 due to increased sales, offset by achieved production efficiencies.

Product gross margins were approximately 76% for the nine months ended September 30, 2019 and approximately 73% for the nine months

ended September 30, 2018.

and Development Expenses:

months ended September 30, 2019, research and development expenses were approximately $8,533,000 as compared to research and development

expenses of approximately $5,299,000 for the nine months ended September 30, 2018. The increase of approximately $3,234,000 was

due to an increase in clinical trial and related costs of approximately $2,856,000, which includes expenditures related to our

REFRESH 2-AKI study, an increase in non-clinical research and development salary related costs of approximately $133,000, decreases

in direct labor and other costs being deployed toward grant-funded activities of approximately $154,000, which had the effect

of increasing the amount of our non-reimbursable research and development costs and an increase in other non-clinical research

and development costs of approximately $91,000.

Financial and Other Consulting Expense:

and other consulting expenses were approximately $1,887,000 for the nine months ended September 30, 2019, as compared to approximately

$1,291,000 for the nine months ended September 30, 2018. The increase of approximately $596,000 was due to an increase in legal