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CytoSorbents Records Another Solid Quarter of Growth in Q2 2014

Companies mentioned in this article: CytoSorbents Corporation

MONMOUTH JUNCTION, N.J., Aug. 12, 2014 /PRNewswire/ -- CytoSorbents Corporation (OTCQB: CTSO), a critical care immunotherapy company commercializing its CytoSorb® cytokine adsorber to treat critically-ill patients in multiple countries worldwide, reported second quarter financial and operational results for the three and six months ended June 30, 2014.

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Q2 2014 Total Revenue of $1.0M, Driven by Record CytoSorb® sales of $663K.
Trailing 12-month CytoSorb® Sales Increased to $1.8M

Recent Financial Highlights:

    --  Achieved record CytoSorb® sales of $663K, a 418% increase over $128K in
        the same period in 2013.  Product sales were driven by continued usage
        and strong reorders from direct customers and distributors.
    --  Total revenue for the first six months of 2014 grew to $2.1M, a 215%
        increase over $663K in total revenue for the same period in 2013.
    --  CytoSorb® sales fueled much of the increase in total revenues, with
        $1.2M in sales in the first six months of 2014, a 305% increase from
        $304K in CytoSorb revenue in the first half of 2013.  The first six
        months of sales have already exceeded CytoSorb sales of $822K for all of
        2013.
    --  Product gross margins for Q2 2014 were approximately 65%.
    --  Trailing 12-month CytoSorb® sales increased to $1.8M, from $1.2M since
        the last quarter.
    --  Healthy cash and short term investments of $9.6M.

Recent Operational Highlights:

    --  Established a second foothold into the growing Asian market through an
        exclusive distribution agreement in Taiwan with HemoScien Corporation. 
        Submitted final product registration in Russia and the Middle East and
        are pending notification of approval.
    --  Biocon, our strategic distribution partner in India, is recruiting a
        dedicated sales force to sell CytoSorb® in India, and is sponsoring a
        September 2014 countrywide scientific symposium tour with a major
        CytoSorb® key opinion leader.
    --  On target with preparations to up-list to a national exchange later this
        year, with strengthening of our team through consolidation of our
        international and SEC legal counsel to DLA Piper.
    --  Continued protocol development and finalization, with plans to submit
        the IDE (Investigational Device Exemption) application for
        intra-operative usage of CytoSorb® to the FDA before the end of the
        year.  Received validation of this treatment approach via the first
        published investigator initiated study using CytoSorb® therapy
        intra-operatively during cardiac surgery in the journal, Kardiotechnik. 
        This retrospective study demonstrated that CytoSorb® usage led to a
        persistent reduction in key inflammatory markers such as IL-6 and
        procalcitonin in the post-operative period.
    --  A new sepsis research article by Dr. John Kellum and our collaborators
        at University of Pittsburgh was published in the journal, Critical Care,
        describing how CytoSorb® therapy redirects potentially dangerous
        activated immune cells away from otherwise healthy organs and toward the
        true site of infection in animals.
    --  The recent MERS (Middle Eastern Respiratory Virus) and Ebola virus
        epidemics have highlighted the need for potential adjunctive therapies
        such as CytoSorb® in deadly viral illnesses.  CytoSorbents has expanded
        its communications with various organizations and is exploring multiple
        options to help make the technology available to those in need where
        possible.
    --  Ahead of World Sepsis Day on September 13, 2014, CytoSorbents announced
        its sponsorship of the 2014 German Sepsis Society Roger-Bone Award, in
        recognition of an outstanding publication in clinical sepsis research.

Dr. Phillip Chan, CytoSorbents' Chief Executive Officer, commented, "We are very pleased with the continued broad adoption and usage of CytoSorb® in our key direct, distributor, and partner markets. This is the fourth consecutive quarter where we have achieved double-digit quarter-over-quarter increases in product sales."

Dr. Chan continued, "In the second half of this year, we anticipate that additional drivers of CytoSorb® sales will begin to come online, helping to further accelerate growth. For example:

    --  In our direct territories, our expanded sales and marketing team is
        doing an excellent job in drilling down into our accounts and spurring
        usage and end user demand amongst the daily treating physicians, for an
        increasing number of clinical applications, as well as in many
        departments in each hospital.
    --  A number of investigator-initiated studies are expected to be completed
        this year, with data available soon thereafter, particularly in cardiac
        surgery and critical illnesses. We believe this will help drive
        additional usage.
    --  We are seeing increasing uptake and reorders from key distributors and
        our strategic distribution partner, Biocon, as they achieve success in
        their marketing efforts and expand usage.  We believe our financial
        results to date do not yet reflect the impact of anticipated sales from
        our distributors in major territories such as the Middle East, Russia,
        and Taiwan, where final product registration is pending.
    --  We are in active discussions with new distributors and potential
        partners to expand into major geographic territories throughout the
        world."

"Most importantly, what is driving the expanded interest in CytoSorb®, and what is personally inspiring, are the continued case reports where our therapy has made a difference in a patient's life and clinical outcome. This is a major driver in all that we do."

"Please join us on the earnings call today at 4:15PM EDT where we will cover our progress in greater detail and address a number of questions that have been submitted by investors. 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: Tuesday, August 12, 2014
Time: 4:15 PM Eastern
Participant Dial-In: 913-312-1269
Live Presentation Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1041083

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 Six Months Ended June 30, 2014

For the six months ended June 30, 2014, the Company generated revenue of approximately $2,087,000 as compared to revenues of approximately $663,000 for the six months ended 2013, an increase of approximately $1,424,000 or 215%. Revenue from product sales was approximately $1,232,000 in the first half of 2014, as compared to approximately $304,000 in the first half of 2013, an increase approximately $928,000 or 305%. Product gross margins were approximately 63% for the six months ended June 30, 2014. Revenue from grants was approximately $850,000 in the first half of 2014, as compared to approximately $359,000 in the first half of 2013.

Our loss from operations for the six months ended June 30, 2014 was approximately $2,537,000, as compared to a loss from operations of approximately $2,829,000 for the six months ended June 30, 2013.

Financial Results for the Second Quarter Ended June 30, 2014

CytoSorbents generated revenues of approximately $1,025,000 and $291,000 for the three months ending June 30, 2014 and June 30, 2013, respectively. Product revenues were approximately $663,000 for the quarter ended June 30, 2014, as compared to product revenues of $128,000 for the quarter ended June 30, 2013. Additionally, grant revenue and other income was approximately $361,000 and $164,000 for the three month periods ended June 30, 2014 and 2013, respectively. Overall blended gross margins were approximately 35%, with product gross margins of approximately 65%.

Our loss from operations for the three months ending June 30, 2014 was approximately $1,383,000, as compared to a net loss from operations of approximately $1,407,000 for the three months ended June 30, 2013.

On June 30, 2014 our cash and short-term investments were approximately $9,623,000, as compared to cash balances of approximately $2,183,000 as of December 31, 2013. This increase in cash is a direct result of our March 2014 registered offering of our Common Stock from which we received approximately $9,451,000 in net proceeds.

For additional information please see the Company's 10-Q report for the period ended June 30, 2014 filed on August 12, 2014 on http://www.sec.gov.

2014 Third Quarter Outlook

CytoSorbents has not historically given financial guidance on quarterly results until the quarter has been completed. With Q3 2014 still ongoing, we continue to see strong momentum in CytoSorb® usage and sales and expect our trailing 12 month CytoSorb® sales to easily continue its upward trend.

About CytoSorbents Corporation

CytoSorbents Corporation is a critical care focused immunotherapy company using blood purification to control severe 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 adsorber, 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 US patents and multiple applications pending, including HemoDefend(TM), 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 intended to qualify for the safe harbor from liability established by 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.

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                                                   CYTOSORBENTS CORPORATION

                                                (a development stage company)

                            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

                                        (amounts in thousands, except per share data)


                                               Six months ended June 30,                    Three months ended June 30,

                                                        2014                         2013                        2014              2013

                                               (Unaudited)                  (Unaudited)                (Unaudited)      (Unaudited)
                                                ----------                   ----------                 ----------       ----------

    Revenues

      Sales                                           $1,233                         $304                        $663              $128

      Grant income                                       850                          359                         359               163

      Other revenue                                        4                           --                          3                --
                                                         ---                          ---                        ---               ---

      Total revenues                                   2,087                          663                       1,025               291


    Cost of revenue                                    1,329                          453                         666               199
                                                       -----                          ---                         ---               ---


    Gross profit                                         758                          210                         359                92


    Expenses:

      Research and
       development                                       583                        1,412                         347               708

      Legal, financial and other

          consulting                                     550                          413                         240               190

      Selling, general and

          administrative                               2,162                        1,214                       1,155               601
                                                       -----                        -----                       -----               ---

      Total operating costs and

        expenses                                       3,295                        3,039                       1,742             1,499


    Operating loss                                   (2,537)                     (2,829)                    (1,383)          (1,407)

    Other expenses, net                                  291                          215                         471                 8
                                                         ---                          ---                         ---               ---

    Net loss before
     benefit from
     income taxes                                    (2,828)                     (3,044)                    (1,854)          (1,415)

    Benefit from income
     taxes                                                --                          --                         --               --
                                                         ---                         ---                        ---              ---

    Net loss                                         (2,828)                     (3,044)                    (1,854)          (1,415)

    Preferred stock
     dividend                                          2,489                        1,203                       1,374               616
                                                       -----                        -----                       -----               ---

    Net loss available to
     common shareholders                            $(5,317)                    $(4,247)                   $(3,228)         $(2,031)
                                                     =======                      =======                     =======           =======

    Earnings per share:

      Basic and diluted earnings per

          share                                      $(0.02)                     $(0.02)                    $(0.01)          $(0.01)

    Basic and diluted
     weight average shares
     outstanding                                 283,424,589                  227,299,644                 301,195,959       231,583,119
                                                 ===========                  ===========                 ===========       ===========


    Net loss                                        $(2,828)                    $(3,044)                   $(1,854)         $(1,415)

    Other comprehensive loss:

        Currency translation
         adjustment                                        5                          (3)                          4               (1)
                                                         ---                          ---                         ---               ---

    Comprehensive loss                              $(2,823)                    $(3,047)                   $(1,849)         $(1,416)
                                                     =======                      =======                     =======           =======


                                               CYTOSORBENTS CORPORATION

                                             (a development stage company)

                                         CONDENSED CONSOLIDATED BALANCE SHEETS

                                                (amounts in thousands)


                                                        June 30, 2014          December 31,
                                                         (Unaudited)                          2013
                                                         ----------                           ----

    ASSETS:

    Cash and cash
     equivalents                                                      $4,878                 $2,183

    Grants and
     accounts
     receivable,
     net                                                                 330                    453

    Short-term
     investments                                                       4,745                     --

    Inventories                                                          304                    246

    Prepaid
     expenses and
     other current
     assets                                                              365                    605
                                                                         ---                    ---

        Total current
         assets                                                       10,622                  3,487


    Property and
     equipment,
     net                                                                 172                    145

    Other assets                                                         463                    414
                                                                         ---                    ---

        TOTAL ASSETS                                                 $11,257                 $4,046
                                                                     =======                 ======


    LIABILITIES AND STOCKHOLDERS' EQUITY

    Accounts
     payable                                                            $526                   $787

    Accrued
     expenses and
     other current
     liabilities                                                         639                    362

    Deferred
     revenue                                                               6                    272

    Warrant
     liability                                                           889                     --

    Convertible
     notes
     payable, net                                                        709                  1,644
                                                                         ---                  -----

        Total current
         liabilities                                                   2,769                  3,065
                                                                       -----                  -----

        TOTAL
         LIABILITIES                                                   2,769                  3,065


    Redeemable
     Series B
     Convertible
     Preferred
     Stock                                                            17,718                 15,246


    Total
     stockholders'
     equity                                                          (9,230)              (14,265)
                                                                      ------                -------


    TOTAL
     LIABILITIES
     AND
     STOCKHOLDER'S
     EQUITY                                                          $11,257                 $4,046
                                                                     =======                 ======

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SOURCE CytoSorbents Corporation