Amy Vogel – Investor Relations Phillip Chan – President and Chief Executive Officer Kathleen Bloch – Chief Financial Officer Christian Steiner – VP, Sales and Marketing, Germany Vincent Capponi – Chief Operating Officer Chris Cramer - VP, Business Development

Good day, everyone and welcome to the CytoSorbents 2014 Third Quarter Financial and Operating Results Conference Call. Today’s call is being recorded. At this time, I’d like to turn the conference over to our moderator, Ms. Amy Vogel. Please go ahead, Amy.

Thank you, operator and good afternoon. Welcome to CytoSorbents' third quarter 2014 operating and financial results conference call. With us today are, Dr. Phillip Chan, Chief Executive Officer and President; Vincent Capponi, Chief Operating Officer; Kathleen Bloch, Chief Financial Officer; Dr. Christian Steiner, VP of Sales and Marketing from Germany; and Chris Cramer, VP of Business Development. 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 filing 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 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 at 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 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 Web site at www.cytosorbents.com. 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. Now most of us know that inflammation plays a protective in the body protecting us against injury and infection. But most of us may not know that inflammation actually plays a major 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 MS and many others. The problem is that uncontrolled inflammation wreaks havoc on the body and can be deadly. The real problem is that severe inflammation can drive organ failures. An organ failure occurs when vital organs like the lungs, the heart, the kidneys, the liver, when they stop working and that is incompatible with life. Organ failure causes nearly half of all deaths in the…

Thank you, Phil, and good afternoon everyone. For today's call I will be providing an update regarding primarily CytoSorbent's revenues. For the quarter ended September 30, 2014, we have achieved record CytoSorb quarterly sales of $1 million. This is the first time in our company history and is in fact a 406% increase over product sales of approximately $204,000 in the same period of 2013. In fact, the quarterly sales of $1 million have exceeded CytoSorb sales for the entire year of 2013 which were $822,000. And our product gross margins for Q3 2014 were approximately 65%. Then for the nine months of 2014, our total revenue was approximately $3.2 million which is an increase of 111% compared to total revenues of approximately $1.5 million for the first nine months of 2013. CytoSorb product sales fueled this increase in total revenues with $2.3 million in sales in the first nine months of 2013 which is a 346% increase from $508,000 in CytoSorb revenue in the first nine months of 2013. Our grant income for the nine months ended September 30, 2014 was approximately $985,000 which is tracking similar to our grant income of approximately $1 million for the nine months ended September 30, 2013. For the first nine months of 2014, our blended gross margins were approximately 44% and our CytoSorb product gross margins were approximately 66%. So let's look at the company's historical quarterly sales for each of the last nine quarters since we began commercialization of CytoSorb in late 2012. With our record third quarter product sales of more than $1 million, the company has posted what is its fifth consecutive quarter of double-digit quarter over quarter growth. Our quarter over quarter growth between the third quarter of 2014 and the second quarter of 2014 was actually 56%.…

Well, thank you very much, Kathy. Now I would like to go into more detail about the planned up-listing to the NASDAQ Capital Market. A quick summary of the approvals we were seeking in our recently sent proxy statement. I also want to clear up some misperceptions about some of these issues and answer number of frequently asked questions concerning the planned reverse split. Now as we have said before, we believe that there are many potential benefits of up-listing. First and foremost, we believe that up-listing to the NASDAQ Capital Market will increase our visibility in the investor community. Currently many institutional investors, because our stock is under a dollar on the OTC bulletin boards, cannot invest in our company for a number of restrictive reasons. We believe that these reasons would go away once we do an up-listing and that they would no longer be restricted from owning our shares. We also believe that our analyst coverage and the news releases will be more impactful. Many of the analysts currently that cover our stock are focused predominantly on institutional investors who cannot currently own our stock. Now that we would, if we are successful in up-listing, we believe that this analyst coverage would be much more impactful. Another potential benefit of up-listing is increased liquidity for investors. As I will show you some data in just a moment, the average daily trading volume increased by three times in the three months following in OTC to NASDAQ national market up-listing. In addition, the median stock appreciation of 2013 up-listed NASDAQ companies was 69% in 2013 and the median stock appreciation of 2014 OTCBB to NASDAQ up-listed companies was 15% in 2014. Now these are based on historical data, past results do not predict future performance and we cannot predict…

Thanks, Phil. We have been very busy here at the company preparing for the up-listing. In the previous conference call we told you a little bit about the progress we have made which included choosing DLA Piper as our legal advisor. We also adopted a code of business conduct and ethics as well as an insider trading policy, both of which are required governance items for the major exchanges. And we have also recently established NASDAQ compliant committees of our Board of Directors and we have adopted charters for each committee, also required. In addition, since our last call we have simplified our capital structure with the conversion on October 9, 2014 of 100% of our series A and series B preferred shareholders to common shareholders. This was a very important step in the up-listing process, since we believe most institutional investors prefer to invest in a company that does not have preferred shares with priority interest. Of course it is also necessary for us to complete a reverse stock split to bring our stock price to the minimum price required by NASDAQ for up-listing companies. And in that regard, on November 6, 2014 we filed our proxy with the consent solicitation to our shareholders asking that they approve five actions recommended by our board of directors. Phil will talk more about those later. Going into the up-listing, we have the benefit of analyst coverage by Brean, H.C. Wainwright, Merriman and Zacks. And, as Phil previously discussed, we are at a point in time where we have made significant operating progress, most importantly the increase in CytoSorb sales. Yesterday we filed our application to up-list to the NASDAQ National Market. NASDAQ has already assigned us a listing analyst and they have begun their review process. And the two remaining steps towards the up-listing are currently underway. We have selected a consultant who will assist us with the documentation and testing of our system of internal controls, another requirement for a company traded on a major exchange, and we are continuing investor outreach in an attempt to generate interest in our stock, particularly among institutional investors. And based upon all of this progress, we believe we are in a strong position to execute the up-listing before the end of this year. Phil?

Thank you very much, Kathy. I would also note that we do not believe that the up-list is a singular event. We absolutely plan to support the company following the up-list with a very defined strategy. Following the up-list we have several goals. First is to continue to drive growth in CytoSorb sales. We will continue to build key opinion leaders support, drive deep into accounts, expand to multiple indications in multiple ICUs within each hospital. We plan to continue geographic expansion with new distributors and strategic partners. Drive country by country product registrations and also invest in the support infrastructure of both direct and distributed this sales. We also plan to continue to pursue strategic partnerships for CytoSorb and for our pipeline. We also plan to prioritize clinical data with build out of our clinical trial capability, start of the U.S. pivotal cardiac surgery trial, obtain data from investigator initiated studies, make progress in our U.S. Air Force funded trauma pilot and other funded studies, as well as continue to build upon the data being held by the CytoSorb registry. We also continue to aggressively plan to spread the word on CytoSorbents via meetings with institutional investors, investor conferences, additional analyst coverage and an upgraded PR strategy. We also plan to aggressively pursue research grant programs in new product development. Now, all of you have now been sent a consent solicitation statement seeking your approval of five proposals needed to up-list. Your vote is required before December 1, 2014. The first item is to approve a 25:1 reverse split for our common stock. The second is to reduce authorized common stock from 800 million to 50 million shares. The third is to reduce authorized preferred stock from 100 million to 5 million shares. The fourth is to approve the…

Thanks Dr. Chan. Over the last week we’ve collected a number of questions from investors. Our first question is for Christian. Christian, could you please give us an update on the development of the commercialization of CytoSorb?

Yes, certainly, thank you, Amy. First of all we are very excited and proud that we have reached this milestone exceeding $1 million in terms of product revenue for one quarter. This was a major effort of the sales team and reflects our progress in the commercialization of our CytoSorb therapy. The success is based on the strong reorder business in our direct sales and excellent progress of our distribution partners. Both in old and new markets. The growth of our unit sales was even higher than our dollar revenue suggests since the euro to dollar exchange rate went down and the majority of our business is done in euros. Commercialization includes a massive amount of effort in addition to the [extra sales] [ph] process. For example, it has been very difficult to find and hire the right sales reps that are best suited for our direct business. However, we have seven reps currently and we will have 10 reps at the beginning of the new year as planned. We are also adding new support people to our sales department as well as leadership on the distribution side to allow us to grow faster and to help manage our rapidly increasing distributor business. Training and education of new sales personnel and new distribution partners and continued education of the current sales force is critical. In the past quarter alone, we have conducted for multiple day training sessions at our Berlin offices, and five training sessions at distributors. Clinical data is critically important for the further development and commercialization of the therapy. As Philip mentioned before, we are pleased with the launch of our international CytoSorb Registry after [ethics] [ph] board approval and successful beta testing completion. The study project is now running at many and many Germany speaking centers have started using the registry. The English platform is in Beta testing and the launch officially in early January 2015. Many international [sites] [ph] have already announced their interest to participate. The investigator initiated trial is also a very important part of our strategy to generate additional clinical data. Of the more than 40 studies being planned, 11 trials are actively recruiting patients and another 6 to 8 studies will start recruitment within the next several weeks. More than 20 other projects are either in preparation or in [ethics] [ph] committee review. To speed up and oversee the development in this field, we have hired a European Medical Director will start on the first quarter of 2015. Reimbursement is also very important in establishing new therapies and usually requires both medical as well as health economics evidence. We are actively seeking to improve the reimbursement situation in many of our markets. All this work normally is not visible to the public but is expected to lead us to new performance levels in the coming weeks, months and quarters.

Thanks, Christian. Can you elaborate a little bit more on the progress with the distribution business?

Sure. We continue our aggressive geographic expansion in the EU and in countries outside of Europe that accept European regulatory approval and we will have more to discuss before the end of the year. One of the challenges we face is the transfer of knowledge about how to best use CytoSorb. We have begun to formalize this during our distributor trainings. This has worked very well with our partners in India and Turkey for example. In India, we recently organized a roadshow together with Biocon, where one of our experienced key opinion leaders from Germany was able to present to more than 350 thought leaders in India in a multicity lecture series. We already had more than 70 cities, sites I mean, in India before the roadshow and we look forward to see how this number will grow as a result of our marketing efforts as well as the increased number of applications including cardiac surgery that Biocon will go after following the announced partnership expansion. As Phil mentioned, another major success was the registration of CytoSorb in Saudi Arabia after long and demanding process. We have already trained the sales team of our partner, Techno Orbits and CytoSorb has been used to now treat the first patients in the field test by the ministry of health. Pending this evaluation, we expect to obtain approval that will extend throughout the Gulf Cooperation Council countries of the Middle East. Amy?

Thanks, Christian. Can you also comment on the acceptance of the CytoSorb therapy by key opinion leaders?

Yes, of course. As you can remember, from the beginning we have [counted] [ph] and reported a number of key opinion leaders that were using or were committed to using our CytoSorb therapy in patients care or in clinical studies. I think we have now outgrown this way of measuring our progress since we can now see the growing acceptance from the number of treatments, reorders and projects we are doing. It is clear that the current acceptance is based on high interest and especially because of the positive experiences users are seeing with our CytoSorb therapy. Nevertheless, we know that we owe the medical community hard data and medical evidence, so we are working on this. While we are very focused on the German speaking community in the beginning since this is covered obviously by the direct sales team, we are now starting to have more projects prepared on an international basis. This could only be achieved with the help of our success so far.

Thank you. And one last question for you. Germany university hospitals have traded a number of Ebola patients. Was any of these patients treated with CytoSorb?

No, not as of now. Germany does have seven centers, approximately 50 ICU beds where the equipment is adequate and the personnel have been trained and educated to treat Ebola patients. Five of these university hospitals are already using CytoSorb in different indications. All sites are informed about availability of the therapy and the current state of knowledge. However, it is of course solely a decision of the treating medical doctors on what therapy is applied to have these patients suffering from such a terrible disease. But we have received positive feedback from a number of doctors at these sites who think that our cytokine reduction approach makes a lot of sense. Amy?

Thanks so much, Christian. Another topic on people's minds is the progress regarding the new manufacturing facility. Vince, can you provide us an update?

Thanks, Amy. As I mentioned in previous quarterly updates, we had initiated a number of infrastructure upgrades to accommodate further growth within our existing facility. These upgrades would allow us to increase production capacity within our current manufacturing facility with minimal cost. We have now completed those infrastructure upgrades and have begun the process of hiring manufacturing personnel to complete a second shift. The addition of a second shift provides additional capacity to bridge our transition from the current location into a new facility. Since our last meeting we have identified and contracted with an engineering firm for the new manufacturing, R&D and corporate center. We are completing the initial engineering phase of the project focusing on the manufacturing and office layout, while concurrently working with our recently signed real estate broker to identify a new site. Our objective is to identify an existing facility that will not require extensive modification to keep costs down and expedite facility renovations to allow for occupancy in a timely manner. The new facility is a progression step to a final manufacturing facility and is expected to be able to meet our production needs for the next several years while increasing operational efficiency and helping us to work through any scaling issues.

Thanks so much, Vince. Now a question for Chris. Chris, can you tell us more about the recent Biocon partnership expansion announcement. What's changing and what can we expect from the partnership moving forward?

Thanks, Amy. Biocon has been an exceptional partner and I am very excited about our expanded relationship. Let me just add some color commentary to what Phil talked about earlier in the call. As you know, we initiated our relationship in September 2013 to launch CytoSorb in India and select emerging markets to enable physicians to treat sepsis. As Biocon began working with its customers, it became very clear that they were increasingly identifying other conditions where very high levels of cytokines have also been known to cause organ failure. In particular, we saw a broader opportunity to treat patients experiencing a systemic inflammatory response syndrome, also known as SIRS, brought about by a cytokine storm. SIRS is caused by a wide range of life-threatening conditions seen in the intensive care unit. It can also because by surgical interventions, particularly cardiac surgery. Throughout my discussions with Biocon, we identified an opportunity to address this market need and felt strongly that we could accelerate product adoption by continuing to build the CytoSorb clinical evidence base. That said, there are several important new developments to highlight. First, the approved applications have grown to encompass all critical care applications in the intensive care unit. While sepsis will continue to be a strategic focus, Biocon will now also promote CytoSorb for a broad range of conditions involving the SIRS response, including lung injury, postoperative SIRS, pancreatitis, burns, trauma and tropical diseases such as dengue fever and malaria, to name a few. Additionally, because Biocon has a strong cardiac care commercial organization and CytoSorb can be used to attempt to control inflammation associated with cardiac surgery, Biocon will now promote CytoSorb for inter-operative use during cardiac surgery. Finally, Biocon will take a leadership role in developing new clinical evidence by coordinating and publishing results from…

Chris, you recently announced an initial partnership with a leading global medical device company in the treatment of cardiovascular disease. Can you talk about the goals of this initial partnership and what it means for CytoSorbents?

Yes. Cardiac surgery is a large and strategically important opportunity for the company. There are about 1.5 million cardiac procedures performed each year worldwide and the number of people suffering from cardiovascular disease is growing. Similar to the ICU conditions that CytoSorb can be used for, high risk cardiac surgery patients may routinely suffer the same harmful effects of excess inflammation that if left untreated can cause organ injury. We are very excited because we believe CytoSorb holds the promise to improve patient safety while decreasing serious complications and their high associated cost, particularly in those undergoing complex cardiothoracic procedures. Because of the nature of this partnership, we jointly agreed with the partner not to disclose their name at this time. While we cannot mention them by name, suffice it to say we are an excellent company working with one of the leading global medical device companies in the treatment of cardiovascular disease. They are known throughout the world for their long tradition of innovation and have influenced nearly all of the modern equipment used by cardiothoracic surgeons and their teams today. Under the terms of this agreement, the partnership will commence with an initial market evaluation period to determine various market parameters, obtain clinical data and build key opinion leaders support in France. Following a successful evaluation, the parties would jointly determine how to expand upon both the size and geographic footprint of the partnership. The focus of this initial collaboration will be to introduce CytoSorb to and work with some of the top cardiac professionals in France. Currently we are working with the partner to simultaneously register the product in France and to start educating select KOLs on our product. Over the coming months we will work with these physicians to implement CytoSorb in their clinical practice and gain valuable insights. The experience gained during the market evaluation period will enable us to build support for CytoSorb and strategically position it for success in the intra-operative cardiac surgery market. I am confident that with the positive evaluation in France, we will be able to broaden our relationship with this partner. At such time in the future, we will be able to release more information about this partnership.

Thanks so much, Chris. While we seem to have covered the major questions, Dr. Chan, do you have any closing remarks for us?

Thank you, Amy, and thank you everyone for participating on the call today. If you have any additional question, feel free to forward them to Ms. Amy Vogel at avogel@cytosorbents.com, and we will try to address them in our next update or sooner. Thank you, again and have a great evening.

Thank you. That does conclude our conference for today. I’d like to thank everyone for their participation and have a great day.