Good day, everyone, and welcome to the CytoSorbents Third Quarter 2015 Financial Results Conference Call. [Operator Instructions] Today’s call is being recorded. And at this time, I’d like to turn the conference over to our moderator, Lee Roth. Please go ahead.

Thank year, Sharon, and good morning everyone. Welcome to the CytoSorbents third quarter 2015 operating and financial results conference call. Joining me today from the company management are Dr. Phillip Chan, Chief Executive Officer and President; Kathleen Bloch, Chief Financial Officer; Vincent Capponi, Chief Operating Officer; Chris Cramer, VP of Business Development and Dr. Christian Steiner, VP of Sales and Marketing from Germany. Before I turn the call over to Dr. Chan, I’d like to remind listeners that during this 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. Detailed discussions of the risks and uncertainties are included in the company’s filings with the SEC. Our actual results may differ from those discusses. Any projections as to the company’s future performance represented by management include estimates as of today, Friday, November 13, 2015 and we assume no obligation to update these projections in the future as market conditions change. During today’s call, we’ll have an overview presentation covering the financial and operating highlights of third quarter by Dr. Chan and Ms. Bloch. Following that presentation, we’ll open the line to your questions during the live Q&A session with the rest of the management team. At this time, it’s my pleasure to turn the call over to Dr. Phillip Chan. Dr. Chan, go ahead, please.

Thank you very much, Lee, and thank you everyone for joining the call today. Welcome. The management team is pleased to be here today. Following the presentation, we’ll have a live Q&A session and then an official transcript of today’s call will be available within the next week on our Web site at www.cytosorbents.com. For those of you who would like to learn more about our flagship product, CytoSorb, I would encourage you to visit www.cytosorb.com where we have a lot of new and current information. CytoSorbents is a leader in critical care immunotherapy. We are leading the prevention or treatment of life-threatening inflammation in the ICU and cardiac surgery using our CytoSorb blood purification technology. Severe inflammation is deadly in the ICU. Millions of people every year are admitted to the intensive care units and hospitals worldwide each year with deadly inflammatory conditions such as sepsis and life-threatening infection, acute respiratory syndrome and lung injury or burn injury, trauma, pancreatitis, influenza even cancer immunotherapy and other inflammatory diseases. I these conditions massive information driven by an activation of the immune response and a development of a cytokine storm causes cell death and organ failure and nearly half of all deaths in the ICU are due to organ failure where there are no effective therapies. But because of the lack of effective therapies approximately one in every three patient dies and the cost can be staggering, the lack of active therapies leads to patients lingering days to weeks at a time in the Intensive Care Unit at a cost of $2,000 to $3,000 a day in the ICU on average and it is not surprising that we spend nearly 1% of our gross domestic product that is all of the good and services of the United States of America on…

Thank you, Phil and good morning everyone. For today’s call I will be providing an update regarding CytoSorb in its third quarter 2015 financial results including product sales as well as an update around our working capital and tax runway. Turning to our financial results, for the third quarter of 2015 our CytoSorb product sales were approximately $1.071 million, which is the highest quarterly product sales in our company’s history, this represents of 4% increase over third quarter 2014 product sales of approximately $1.032 million, a decrease in the exchange rate of the euro had a negative effect on our reported results, which we will cover in more detail in a little bit. Grant and other income was $272,000 for the third quarter of 2015, as we achieved certain billable milestones related to our cytokine activities during the quarter. And finally we note that we were able to achieve gross profit margin on product sales of approximately 63% in the third quarter of 2015. Next, our nine months revenue results. CytoSorb product sales for the nine months ended September 30, 2015, were approximately $2.5 million, which is a 13% increase over the first nine months of 2014 product sales of approximately $2.3 million. As with the third quarter, product sales for the nine months were negatively impacted by the declining exchange rate for the euro, our gross profit margins of product sales were approximately 62% for the nine months ended September 30, 2015 and next we look at our chart of product sales by quarter. The white-blue bar that is the bottom portion of the bar on this chart represents our actual reported sales. Note look our record Q3 2015 sales of $1.1 million which is an increase of approximately $300,000 or 39% over sales in the third quarter of…

Thank you very much Kathy. Now on few operating highlights. As we discussed in the press release today, the first thing is that we submitted for Expedited Access Pathway of designation. The FDA has established the Expedited Access Pathway or EAP program that is intended to facilitate the approval of medical devices that treat life-threatening conditions and have no approved alternative treatments. So we have submitted our EAP application to request EAP designation and it is the equivalent of breakthrough designation for drugs and biologics but for medical devices. Given that the application is under review, it would not be appropriate for us to discuss at this time, but we will have an update in the future at the appropriate time. In terms of our cardiac surgery partner, I’m pleased to announce that the valuation by our cardiac surgery partner in France, one of the top four cardiac surgery companies in the world is now successfully completed. We are currently in discussions with the cardiac surgery partners and we’ll have an update at the appropriate time as well. In the meantime Cytosorbents has been used and more than an estimated 1,000 intra-operative cardiac surgery cases to date in Europe. As a summary some of the recent clinical activity in cardiac surgery at a Second International CytoSorb Users Meeting, preliminary results were presented from three safety and inflammatory mediator biomarker studies using CytoSorb intra-operatively in a heart-lung machine and low-risk cardiac surgery patients. The first study we’ve done at the University of Hamburg at Eppendorf, 20 patients randomize control pilot study which is now complete. The second one was a 37 patient randomize control pilot study at the Medical University of Vienna, which is also now complete. And at the University of Cologne interim data from 142 of 300 patients comparing…

[Operator Instructions] We’ll take our first question from Jonathan Aschoff of Brean Capital.

What is the average selling price and the range and the direct and distributor sale mix?

We’ve not broken that out directly, but what we have said is that our direct sales are typically above a $1,000 a cartridge. But we’ve not broken out what the ASPs are for distributor sales. On that we have gross margins of 63% as we previously mentioned.

How about that direct and distributor sales mix?

We’ve not broken that out either. Right now the reason why we haven’t done that is because of the lumpiness of distributor sales and whenever we sign a distributor there is typically some type of stocking order, then followed by purchases as they develop the market. And so because of that, trying to -- it varies quarter-to-quarter between the ratio of direct and distributor sales.

Can you give me the reorder versus new orders for 3Q?

Although we have not broken that out historically, we have been talking about that as a benchmark potentially in the future. But what we can tell you is that historically as well as in the third quarter reorders are the predominant orders that are making up bulk of our product sales.

So in that kind of begs, how many of the target docks has been reached by your direct sales force are you going to add more than I believe you said two by the end of the year, you already added two or so you said, are you going to go beyond that or stop and see how that does?

So I think when you look at other major international companies that focus on the direct sales territories that we’re focusing on, their sales force is comparably sided. So because critical care medicine is typically in major hospitals, in ICUs, you can target those ICUs relatively efficiently with a relatively small sales force, it is very different from the primary care sales force that you need -- to that many pharmaceutical companies need to develop in order to get at those private offices all over the place. So I think for now we are looking to bring on a medical science liaison who will help our sales people in the market, we’re also, as Kathy mentioned, adding two additional sales people hopefully to shop up early in 2016 and we think that should suffice for the moment.

But did you tell us how many of the target docs you guys have reached?

So we are in the majority of university and public hospitals throughout Germany today as well as in Austria we’ve been looking at for inroads in Switzerland as well. That is our direct sales territory. And I think that as a surrogate for this, when you go to these critical care conferences and we host Symposia, at our last Symposia there were more than 300 physicians in attendance in that Symposia and that was an international conference. And we see similar types of numbers when we have our German and German speaking country focused initiatives as well. So I would count those as hundreds of key opinion leaders and they continue to grow. As you know we used to use key opinion leaders as a surrogate for adoption, but they are just too numerous to count at this point and so we’ve stopped providing that number.

What was the original timeline for Fresenius to start selling, was it always one quarter, ’16?

No, I think Chris Cramer can actually give a little bit more detail on this. But I think that our goal was to try to get this launched in Q4 this year. And so it still may happen, but maybe Chris if you’d like to give a comment on that?

I’d say overall we’re in the final stages of preparing for a full market launch. So in Q3 I see lots of premarketing work was done to really focus on building support of what I’ll call local physicians champions in the six countries that are covered under the partnership and these are physicians that are highly respected, they are thought leaders in this field of critical care. So this quarter, we expect them to begin with initial use of CytoSorb, and our goal is to leverage the positive experiences from these physicians as we start to broadly introduce CytoSorb across the FMC territory. In addition of that I think what Phil had also mentioned is, there is various technical operational preparations that are expected to wrap up soon. So overall I’d say both sides are coordinating very closely, we want ensure successful rollout and we expect to go live with what I would call first full commercial efforts in the six countries starting in Q1 2016.

Okay. Well congrats on the revenue guys. Thank you very much.

Thanks very much Jonathan.

Our next question will come from R. K. Ramakanth of HC Wainwright.

My question is on the revenues, how sustainable are these -- is there any lumpiness in this number? Based on your 2015 guidance it looks like you could record about the same number in next quarter, but I just want to understand how sustainable this number is and what kind of growth you could think about in the coming year?

Yes, I’ll ask Kathy and Christian actually to comment on this as well. But I think what we are very encouraged by is the fact that this quarter was actually very broad based in terms of contributions to the different segment, so both distributors and direct sales reorders from major reference sites, new orders, et cetera. So across the board it was very strong, there was no concentration necessarily of any one customer beyond what we’ve seen historically in the past, now last year in the Q3, it was actually very strong quarter, an unusually strong quarter given the fact that we had a number of distributors come online at that time, placing initial opening orders and other things and so this year, we actually see this as much more sustainable than what we saw last year and I think which bodes well in the future. Kathy and Christian did you have any other comments?

Thank you, Phil. I just confirm what you have said, I think this quarter was a healthy quarter, very organic growth and you know the direct market, especially Germany is our model market for our business and our commercialization. And we had started there first and therefore also the development of the market is most advanced compared to the other markets. So the development of the market in Germany is very encouraging, so far example we have increased the number of ordering customers dramatically compared to last year. So more than 50% and this contributes to a more sustainable revenue stream and I think that we’re looking forward to further growth.]

Great. In terms of the ex-U.S. marketing strategies, you’ve been talking about the top four cardiac surgery company and -- so I thought by now the evaluation should be done and probably even get into the launch phase, but what -- not the early ratio, but what’s going on there, what was the timeline, now how -- when were they finally make a decision as to launching the product?

Yes Chris, is that something that you would like to comment on as well?

Yes, sure Phil. Hi R.K. How are you?

Good.

So, I would say with the cardiac partnership, so as Phil mentioned here evaluation projects completed in Q3 2015, and as part of this project we worked with one of the top surgical teams in France. CytoSorb was used intra-operatively on patients undergoing complex cardiac surgery and just notably these patients are very similar to those that will enrolled in the refresh trial, I would say that overall the clinical valuation went very well in fact as good as we could have expected and it reinforced many of the positive attributes of CytoSorb that we’re seeing in the field today. So I thought that was very good. So currently we’re in what I would call this discussions with the partner about next steps and at this point we can’t comment anymore on that, but we’ll keep everyone informed as to our progress on future goals.

Okay. Thank you and talking about the REFRESH study and the EAP designation, how does EAP designation help in terms of conducting clinical studies or review or approvals, where does it help you in terms of the development within the United States?

Sure. So I will talk more generally, and these comments are not related to our specific application. But the FDA had realized that there were a lot of medical devices that could be helping patients, who have no other option and help them. But because of the restrictions that the FDA had on safety and efficacy and the stringent requirements that they had. And it’s difficult for those potentially useful products from ever making into market. And if patients who had no other choice we’re willing to undertake the risk of using these products that there was a push that they should essentially be able to do so. But of course the FDA’s approach is of course to protect the U.S. population and to make sure that devices meet the safety and efficacy requirements. So they came up with a program that mirrors the breakthrough designation pathway for drugs and biologics. We are -- the things that achieve breakthrough designation and things that achieve EAP designation will be essentially put on a fast track for essentially early market approval. And this would require a approval of the data designation plan, which would lay out a clinical study that would be performed, that would be the basis of that early market approval. And what they have said in your guidance is that they are now looking to have the definitive efficacy and safety study which often involved 20-day all-cause mortality which is an extremely hard and points to hit. But they said that for devices that have been demonstrated to be safe, they would be willing to approve products earlier based upon lesser endpoint, less stringent endpoints potentially things like days in the intensive care unit for example. And so, but the program also though with require that the sponsor, the developer of that medical device would commit to a post market strategy where they would eventually get the data to show and to meet the stringent requirements of the FDA on efficacy and safety. So it really is along the guidance of the FDA’s risk benefit relationship of devices that are relatively low-risk for the potential benefit that they may provide and I think that would be genesis of the program. So essentially the short answer is that is sort of a fast track, it provides a collaborative working relationship between the FDA and the company, they would assign a senior person on that trial to help push through this pre-market study and to work very closely with the company [audio gap] be done. So that is a little bit about the EAP, does that answer your question R.K.?

Yes, that’s good. And the last question for me is on HemoDefend. Now that you have a $1.5 million to go in. What’s the development timeline for this and how different is the current structure is going to be compare to what has been done before?

So in Phase 1, it was predominantly development phase program, we were taking our existing technology that we had already developed really more of a first generation technology. And developed it further and optimized it, so that we had the performance that you saw on the slide that I showed you. Now this is considered actually quite good data in fact a poster on this, on our results from the Phase 1 study was actually selected as a top poster at the American Association of Blood Banking conference. And it was also the product was chosen as an innovative -- as a product worthy of being featured in the innovation NHLBI, National Heart-Lung and Blood Innovation conference that was becoming up very shortly. So the Phase 2 is really designed to take it to the next level, it is really as with all SBIR or small business innovative research programs, the goal is to push towards commercialization and that’s exactly what we plan to do. We have the polymer, it’s undergoing some additional optimization, but we worked out many, many different things as it relates to potential commercial products and is it something that we are looking to test on man [ph]. So with this Phase 1 -- Phase 2 SBIR program. So that will involve testing human blood that has been purified with the HemoDefend technology and evaluating that blood in humans.

Okay. Thank you very much.

Thank you, R.K.

And our next question will come from Andrew D’Silva of Merriman Capital. Andrew D’Silva: Thanks for taking my call. First just a few questions, first of with your internal models today as you look out into 2016, are you expecting the majority of revenues to you continue to come from internally derived initiatives as they have in the past like in Germany and surrounding areas? Or are you expecting third-party relationships such as for Fresenius and [indiscernible] and her distributor network to be the majority of your ’16 product sales this time? Also if you could just highlight any regions that you expect outperformed the norm, so us as analysts can be dig a little deeper in the landscape there?

Sure, as I mentioned in the press release, I think that we -- at the end of 2015, we’re seeing a convergence of a lot of the different things that we’ve been working on that would have a potential build in a broad based way contribute to our revenue growth in 2016. When we first started selling this product in 2012 really first year of commercialization with 2013, which predominantly is small sales force selling direct. In 2014 it was complemented by some early activity in partnering and early distributors. In ’15, it was sort of a combination of strategic partners distributors and direct sales, but with a lot of big territories for example like France, and Poland, Sweden, Norway, Denmark, Russia, Middle East and others that were developing but not yet contributing actively to our revenue. So in 2016, we see this all coming together, I think which is why we’re so optimistic about our potential growth in 2016 particularly with the kind of momentum that we’re seeing now. Kathy is there anything that you might want to add to that or?

No, I think you stated that right, so it has been a mix and the direct sales of course started to develop much earlier than the distributor sales. So we still have some lumpiness and catch up in the distributor area, but they are going to be growing as we move ahead and add new territories I believe and as we receive repeat orders from the existing distributors.

Christian, maybe if you want to tell us a comment about what your perspective was?

Yes, as I said in the call though the direct market are kind of modern markets and as Kathy said we have started that with earlier or one and a half years earlier than in the most of the distributor markets. So that means that all the instruments and projects and campaigns we are doing here and leading to accelerated goals, we will trump late into the other market as well. But this of course with some delay. On the other hand having the experiences and the learning in the direct markets we can kind of short cut in other markets. And also the going appearance on [indiscernible] and along have to increase the speed of adoption. Andrew D’Silva: So just to recap on that, so is it fair to assume into ’16 that as you grow that a greater portion of your revenues will come from third-party distribution and strategic partnerships versus internally derived initiatives?

So I think that we are seeking a balance, clearly direct sales is a very strong engine of growth right now with broad based support in our direct sales territories from key opinion leaders and where we have reimbursement and the infrastructure is set up to really increase sales more rapidly. But of course the lower margin distributor sales and partner sales are important to our business and we see that contributing as well. I think just to, maybe give you a little bit of guidance, I mean our goal is to increase our gross -- our blended gross margins between those two through a combination of product -- through a combination of customer diversification as well as reducing the cost of goods sold as well. So I think that it will be a broad based revenue growth model going forward. Andrew D’Silva: And then just a follow-up on Fresenius, I don’t know if the question was asked in this way yet, but did they actually placed their initial fulfilment or stocking order as of today or are we looking for that initial order to be met in the first quarter?

I think we expect that as they move into the markets in the formal launch, they would want to have enough stocks available to be able to do that. So whether or not that’s in Q4 or Q1 we don’t know. Andrew D’Silva: But there was no official like timing requirement for them to actually place their stoking order or initially you thought there was a time spend that they had to meet, that’s not true?

We are within this first term year of the agreement and so we believe that they will meet their requirements. Andrew D’Silva: Okay. Fantastic and the last question, can you just remind me again as far as what the differences between the REFRESH I and II are?

As to REFRESH I is really a feasibility and efficacy -- feasibility and safety study. And it is really designed to FDA comfort with this product in the United States amongst U.S. clinical trials sites again it's a relatively small study 40-patients among eight centers. Where the primary end point is safety and the primary efficacy end point is reduction in free hemoglobin. What we’ve said in the past is that the FDA -- we will meet with the FDA prior to REFRESH, the design of REFRESH II and get guidance from them on what REFRESH II will look like, it could take one of two paths, one is a potential the de novo 510k where they would accept biomarker reduction as an end point, they would clearly use our biomarker data from REFRESH I as a decision making point for that, or it would be a potential PMA trial, where they would use clinical end points as an end point and that would be a larger study than the de novo 510k biomarker end point. But the design of the trial and the selection of the patients all that is very similar, in fact if I made efficacy and reduction in adverse events as a primary end point of REFRESH I we can almost roll that into a REFRESH II and so it is very similar design, where we are using CytoSorb intra-operatively in elective cardiac surgery patients undergoing complex cardiac surgery procedures.

And our next question will come from Steve [indiscernible] of WBD [ph].

Good afternoon I’m going to dive into something that you would just talked about on FDA because -- obviously FDA is always inundated with folks that are coming and saying we’re only got third and fourth in line, but this is obviously that critical unmet need, what kind of feedback has FDA given you and can you give us some background on how things have progressed with FDA? And also clinicians are an integral part of dealing with FDA, what kind of momentum and efficacy are you seeing with that, because obviously if you are talking about the results clinicians know that they just don't have a choice in some of these cases and what do you think as far as them saying no, you are right, this we have to do something?

Sure. I think what we can point out is that currently today, we have three FDA approved IDEs, one in the treatment of acute respiratory distress syndrome, one in the area of treating trauma and rhabdomyolysis and that is the one being pursued with the U.S. Airforce and then the third IDE is approved for cardiac surgery for our REFRESH trial. So the FDA knows our technology, know it quite well, in fact as part of the DARPA program where we collaborated with likes of Harvard, [indiscernible], MIT next stage genetic Battelle labs and others, they have been very integrated, in fact in that program and through that we’ve had even additional contact with the FDA. So that being said, in terms of key opinion leaders, et cetera. We have right now three very strong advisory boards, one in the area of sepsis and critical care, which includes the likes of Dr. Joseph Berlo [ph], Dr. Eugene More, Jeff Berlo [ph] is the Chief of Critical Care Medicine and Dr. Eugene More is the head of the editor in Chief of the Journal Trauma for example, Dr. John Callen [ph], who is the Vice Chair of research at the university of Pittsburg medical center, and their critical care program, there in fact Dr. Callen [ph] has been a long standing collaborator of our over the course of the more than a decade of research, he has done all the -- most of the pre-clinical animal work on our technology and is considered one of the really true key opinion leaders in the area of using blood purification to treat life threatening illness like sepsis, as well as very well known in area kidney injury in critical illness as well. So we have a very strong group there, we have outstanding trauma advisory board, we also have an outstanding critical -- outstanding cardiac surgery advisory board as well, so we are plugged into really major pleasures in the REFRESH trial also we’re dealing with some of the really top cardiac surgeons in the country and so we feel comfortable with that level of support and we are grateful that they have such interest in our technology. That being said, we are not approved yet in the United States and there is -- we’ve looked to expand the awareness of our technology overtime as we get closer and closer to the market place.

All right, I’ll jump back in the queue. But you had mentioned [indiscernible] obviously when you are talking about every single ICU where someone is put on a ventilator, that’s a significant consequence. What are the Europeans saying in feedback back to you, because when you incubate someone and then reinsulate someone. You are now all of a sudden in a situation where it just a significant negative spiral. What kind of feedback are you’re getting there? And thanks I’ll jump back in the queue.

So when we look at the clinical benefit of the technology. Where we see the major clinical benefit is in the stabilization of hemodynamics and blood pressure. Of course blood pressure is extremely critical to being able certainly oxygenated blood to your vital organs, they don’t get a lack of oxygen and then die. And so that’s the major area, but the second area is in the area of capillary leak syndrome. In the capillary leak syndrome is -- to explain this is that your blood vessels, typically the walls of the blood vessels have an integrity that is based upon the cells lining the blood vessels that they’re stuck together very tightly. What happens is that deadly inflammation and what happens in cytokine storm is that cytokine and other inflammatory mediators can actually a cause those cell-to-cell contacts to become weekend and actually to become broken. And so imagine as an analogy a brick wall and then basically taking brick out of the wall. Right now anything from one side can get to the other side and in acute respiratory distress syndrome and lung injury that’s exactly what happen. You get this capillary leak in the lung and then you get fluid flowing from your blood vessels directly into your air sacks of your lungs, your alveoli and you’re essentially drawing the patient from the inside -- the patient is drawing from the inside out. And that capillary leak syndrome plays a major role in actually organ dysfunction all over the body. For example, when you get tissue edema in the kidneys for example. Often time, they can’t expand that much and that pressure builds up and then you reduce blood supply -- blood flow into those kidney. So these are just some ways of how this capillary leak syndrome can be some dangerous. And I think you’ve heard on the testimonial video how in many cases that we have been successful in helping improve oxygenation and improved respiratory function using our technology. So I think that there is a significant play in the treatment of acute lung injury as well as acute respiratory distress syndrome and we have a number of studies specifically focused on looking at that potential benefit.

Well again thank you for those answers and obviously looking forward to on the first KOL basically says they’re not going to take it anymore and FDA basically agrees. Thank you.

Thank you.

And Mr. [indiscernible] I can may continue with any more questions.

I’m good. Thank you.

Thank you very much. We’re showing no further questions at this time. Right now I’d like to turn the call back over to management for any closing remarks.

Well, thanks Lee. Well thank you everyone for taking the time today to get on the call in the middle of the morning and we certainly appreciate your participation and support. If you have any other questions, please feel free to reach out to Amy Vogel at avogel@cytosorbents.com and we will try to get you answers to some of your questions as needed. So in the meantime, we look forward to the next update on the next quarterly call. Thank you everyone and have a great day.

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