Dr Chan's Replies

June 4th (question by warren)

Dear Xxxxxx, Thank you for your email. I understand this is a sensitive point for most shareholders. In a development stage company, raising equity is an unfortunate necessity. However, I believe it is imperative that management does so responsibly. In terms of CytoSorbents, I thought it would be helpful to point out a few things that demonstrate what we are trying to accomplish. 1) If you look at our income statement for 2008, 2009 and 2010, our burn is low compared to many other development stage companies. Our entire annual net loss (excluding non-cash charges) has been less than $3M in 2008 and 2009, which includes our clinical trial costs. Please compare the cash management of our company with other development stage companies. There are some development stage companies with $20M in cash, burning $20M a year. You will find that we compare favorably. Our advantage is that we don’t need to raise a huge amount of money to continue making progress. In general, that means less dilution for shareholders. We have also been very aggressive in trying to bring in non-dilutive or less dilutive money into the company wherever possible. 2) Please compare the fully-diluted market capitalization of companies trying to make the transition from development stage to commercial stage. Even disregarding the market potential of our products, you can make a judgement on your own on how we compare. If we are successful and have a successful product, it could make raising money at low cost much easier, and at some point, the company could fund operations and expansion through positive cash flow. This is the significance of gaining CE Mark approval. Our manufacturing process is inherently low cost and in volume, our gross margins are expected to significantly exceed the 40-60% gross margins seen in the medical device industry in general. Let me remind you that this is a low cost, high margin razorblade in other company’s razors with an outstanding business model in the favorable DRG reimbursement area of critical care. 3) If you purchased the stock of our company in the past year to year and a half, in general the only dilution that shareholders have suffered was from the regular quarterly issuance of Series A and Series B preferred dividends and the issuance of common stock warrants associated with the Series B warrant exercise. The number of fully diluted shares in the company has long been determined by the Series B financing completed in June 2008. Yes, the outstanding common stock float has significantly increased due to the conversion of preferred stock into common stock, however, the fully diluted share count has been relatively stable, in comparison. If you bought X% of the company last June, on a fully-diluted basis, the ownership percentage has not changed drastically.

May 12th (question by warren)

Dear Xxxxx, Thank you for your email. Your comments capture the essence of the difficulties in buying or selling stock for insiders in a publicly-traded company undergoing a clinical trial. However, as you can see from our most recent 10-K filing, I am the beneficial owner of 603,564 common shares of CytoSorbents Corporation (on an as-if converted basis) that I purchased with my personal money.

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In terms of your other question, whenever an investor, retail or institutional, purchases shares of a company, there is always the expectation that they will sell the stock at some point. When it happens is anyone’s guess. Whether they buy shares in a PIPE financing, or on the open market, this is the nature of investing. In fact, in most private equity financings, including traditional PIPE financings, regardless of structure, investors typically have the ability to sell registered public stock at any time. That being said, I cannot predict what LPC will do with our shares. They have the ability to hold or sell our stock. They certainly have no incentive to buy our stock at $0.15, for example, and then dump it en masse the next day at $0.14 cents for a loss. Like most experienced investors, if they want to sell, the strategy is typically to sell slowly over time so that the stock price is not adversely impacted. I would also say that I was impressed by the level of due diligence they have performed on our company. These are very smart institutional investors that are selective in their investments and my perception is that they certainly understand and are excited about what we do. Looking at it from a bigger picture, I think the thing to remember is that they are providing the valuable function of helping to finance the company and advance our programs, including our clinical trial. General daily trading and market activity typically does not help a company raise money, unless they have the ability to sell stock to the public markets. This is the whole concept behind IPOs and secondary offerings. LPC provides the link for us to do so. This is to the benefit of all shareholders. Hopefully this helps to address your concerns. Thank you again for your support. Best, Phillip

June 3th (question by Warren)

Dear Xxxxxx, We have been working on a multi-faceted financing approach, looking to put together a financing package that would result in the least shareholder dilution that we could accomplish. The LPC equity line is a key part of that strategy. Our non-dilutive NJ NOL award was part of that strategy. The non-dilutive federal tax credit is another piece, for example. That being said, we need to wait until our registration statement is declared effective before drawing down on the equity line. We have been working on the S-1 and hope to file soon. We will also have to wait for our share price to rise above $0.10. Make no mistake, the LPC equity line is a good deal for shareholders. Although we never intended to rely solely on the LPC equity line, had our share price remained above $0.10, it could have been a primary financing vehicle for the company. The selling that is currently going on in the company is partly related to weakness in the overall markets and partly due to certain sellers in the market. Their motivation for selling is their own. It is not based on any “inside” information. Hopefully this helps answer your question.




Best, Phillip ____________________________ Phillip P. Chan, MD, PhD Chief Executive Officer CytoSorbents Corporation 7 Deer Park Drive, Suite K Monmouth Junction, NJ 08852 [email protected] O (732) 329-8885 ext *823 F (732) 329-8650

Oct. 1th (Question by Warren)

Dear Xxxxxx, Thank you for your email. Not specifically relating to the phrase you have highlighted, I can only say that we try to carefully review all materials that are posted on our website. Thank you again for your continued support and have a great weekend. Best, Phillip ____________________________ Phillip P. Chan, MD, PhD




Chief Executive Officer CytoSorbents Corporation 7 Deer Park Drive, Suite K Monmouth Junction, NJ 08852 [email protected] O (732) 329-8885 ext *823 F (732) 329-8650 ----------------------------- MY E-MAIL TO DR. CHAN THIS MORNING: Good morning Dr. Chan, I noticed in the wording of Cytosorbents' September, 2010 Executive Summary posted below, in one particular area, there was a difference in the way that corresponding paragraph read in the June, 2010 Executive Summary compared to the September, 2010 Executive Summary..I've underlined the phrase in the June, 2010 Executive Summary that is missing from the September, 2010 Executive Summary....My question is was the ommission of this underlined phrase intentional? Thank you in advance for your reply. Sincerely, Xxxxxx Xxxxxxxxx (shareholder) [email protected] xxx-xxx-xxxx (phone)

Aug. 20 (question by stevensegelss)

My Email to Dr.Chan:




Hi Dr Chan, I am investor in your company, I hold nearly xxxk shares. I am following this company since last year and adding shares since then. This is the first time I am writing to you. I have a few questions: 1. A enrollment means that finished 60 day follow up on a patient or they yet do a follow up? I mean to ask you is when they meant 75 enrolled -"this enrollment" that includes finished 60 day follow up or just a number and yet to need a follow up? 2. I am strictly keeping track and following all the conferences you present. My question is -"As we all know by your presentations that device works but yet we are all waiting for results and yet we don't have a partner". Does this conferences really help in getting a partner when we don't have the data on our hands? I understand that these conference helps in bringing the exposure but I don't think that will have an actual impact without the actual data. Regards XXXXX Dr.Chan's Reply: Dear XXXXX, Thank you for your email. 1) Enrollment into the study is different from study completion. Enrollment means that a patient has begun participation in the trial. Study completion for any given patient is 60 days from enrollment. This time point is to specifically calculate 60-day all-cause mortality, which is only an exploratory endpoint. Our secondary endpoints such as vent-free days and 28-day all-cause mortality require 28 days post-enrollment to complete. But please recall that cytokine reduction, specifically IL-6 reduction, is our primary endpoint. We can have this data in less than 30 days from enrollment. As for the 75 patients enrolled to date, the vast majority have now completed the study. If timing of CE Mark approval is your concern, we continue to work on our CE Mark application in parallel to the trial so that we are ready to file as soon as possible. 2) In terms of our conferences, I would argue that exposure through many different channels, including conferences, is essential to building awareness of our technology and company amongst investors, collaborators and strategic partners, and importantly, to meet the right people who can help us. Although you may not see this initially reflected in the stock price, these conferences have yielded many opportunities for the company and have laid the foundation for potential future upside for investors. I am the key person at each of these meetings and I can tell you that the response to our technology and our progress is typically extremely favorable. Hopefully this helps to answer your question. Thank you for your support of the company. Best, Phillip

July 22th (warren)

I just got home and found Dr. Chan has sent me a reply to my earlier e-mail asking him if CTSO would be presenting at the International Sepsis Symposium in Paris, France. Here is Dr. Chan's reply:




------------------ July 22, 2010 3:05 PM PDT Dear Xxxxxx, June 2th (warren) I have some of my questions and concerns answered, DL. I just NOW, moments ago saw that Dr. Chan replied to my e-mail of last week. I will follow his reply, posted verbatim below, with another posting regarding ANOTHER set of two questions regarding funding. That next set will be in a new posting. But, for now here is Dr. Chan's response from my question from last week (regarding "addressable market"): ----------------------------------- June 2, 2010 5:02 PM Dear Xxxxxx, Yes, thank you for your reminder. I was in Germany all last week and so had sporadic email coverage. Market adoption of a product is often dictated by how efficacious the product is, how much data there is to support its use, how many treatment alternatives there are, how cost-effective the solution is, how safe the treatment is, how easy the treatment is to implement, whether or not a particular treatment has become “standard of care”, manufacturing limitations, how much money is spent on sales and marketing, and many other factors. For most new products, being able to achieve 5-10% market penetration in 5 years is quite good. The peculiar thing about the severe sepsis and septic shock market is that it is a large, growing market, with few treatment alternatives and generally poor outcomes across the board, throughout the world. Only Xigris has been approved to treat sepsis and had only $160M in worldwide sales in 2008, despite being in a multi-billion dollar market. The limitations and shortcomings of Xigris (high cost, questionable efficacy and potentially dangerous bleeding side effects) have been discussed many times in the past. Please also remember that the estimates of 1 million patients in the US are for “severe sepsis or septic shock” where patients are very sick and likely in the ICU being treated. There are far more patients with run of the mill infections that are not so serious, but that would qualify a patient as having simple “sepsis”. Uncomplicated influenza is one such example. That being said, we believe that CytoSorb, if it can impact the treatment or cost of treatment of severe sepsis or septic shock in a significant way, has the ability to achieve significant market penetration in the area that it was approved in. This is dependent, of course, to the variables I discussed above. But at least 10% market penetration in 5 years is possible, particularly with the help of an aggressive strategic partner with existing distribution. As a cytokine filter, CytoSorb could also be used off label in a number of different critical care conditions where cytokine storm plays a significant role. This would further expand the markets for CytoSorb. In sepsis, there is plenty of room for competitors. Just as you have seen with anti-cytokine therapies (specifically anti-TNF MAbs) for autoimmune diseases…Remicade, Enbrel and Humira collectively account for approximately $14 billion collectively in worldwide sales, making each of them a blockbuster therapy.




I hope this helps address your question. Best, Phillip Thank you very much for your email. For this year, we are still conducting our clinical trial and cannot publicly discuss that data. At this time, we do not have plans to present at this conference. When the time is right, however, we will look to aggressively present at this and other conferences. Thanks again for your support. Phillip ____________________________ Phillip P. Chan, MD, PhD Chief Executive Officer CytoSorbents Corporation 7 Deer Park Drive, Suite K Monmouth Junction, NJ 08852 [email protected] O (732) 329-8885 ext *823 F (732) 329-8650

June 15th (Jackiedupriest)

Dr Chan's last statement below in the mid-May reply and manner is very confident and a tidbit of what I was referring to in my previous post. He reviews the other endeavors in question and then finishes countering very confidently. I contend that this is based on clinical data seen. As you recall, Berthabluefish posted this article on Japan's CHDF device, where the author from a Japanese medical center is 'claiming' superiority of their CHDF filter to treat severe sepsis compared to




a process similar to what Cytosorbents is using in testing it's product. http://www.ncbi.nlm.nih.gov/pubmed/20472... I asked Dr. Chan Tuesday via e-mail what he thought of that abstract, and how Cytosorb compared. I just got home and discovered he had replied late today (TWO days for a reply--not bad!). Here is what he said (I'm cut and pasting the entire e-mail verbatim.): ------------------------------- Thursday May 19, 2010 5:54 PM Dear Xxxxxx, Thank you for your email. Sorry I did not see that you had sent this email until just now. This group has been actively trying to treat a number of conditions with their PMMA membrane hemodiafilter with the goal of trying to reduce cytokines. Cytokines bind to the membrane and are then removed from blood. These membrane based approaches have the inherent weakness of only having 1-3 square meters of surface area on which to bind cytokines, thereby greatly limiting their capacity. They get saturated relatively quickly, limiting their effectiveness. Although the researchers tout their technology, please let me know if you have come across any randomized controlled clinical trials on their technology? They typically treat a consecutive group of affected patients, but do not compare them to a control cohort. At the end of the day, would these patients have gotten better even without the treatment? We don’t know, but that is supposed to be the purpose of doing a randomized controlled trial. This has been the general weakness of most Japanese studies on blood purification. Though I would say the Japanese are big believers in blood purification to treat disease. Another recent example of a non-controlled study. An abstract was just published in Minerva Anestesiology claiming that treatment of 12 consecutive septic patients with a Toraymyxin column “reduces” plasma levels of cytokines. First, this is hard to believe since there have been a number of studies showing that Toraymyxin does not remove cytokines well. Second, if you read the abstract, how do they know the device removes cytokines? They do not measure cytokines going into the device and then coming out of the device at an instantaneous point in time. Instead, they measured plasma cytokine levels 24 hours before and then 24 hours after treatment and showed that they decreased. A lot can happen in 48 hours. This might have nothing to do with Toraymyxin. One could argue that the patients were on antibiotics and just got better, hence the lower cytokine levels. This study needs a control arm. CytoSorbents is running one of the largest randomized controlled trials for the treatment of cytokine storm in sepsis. Few others can say that. We are one of the true pioneers in this space. Hopefully this helps to answer your question. Best, Phillip

May 19th (warren)




As you recall, Berthabluefish posted this article on Japan's CHDF device, where the author from a Japanese medical center is 'claiming' superiority of their CHDF filter to treat severe sepsis compared to a process similar to what Cytosorbents is using in testing it's product. http://www.ncbi.nlm.nih.gov/pubmed/20472... I asked Dr. Chan Tuesday via e-mail what he thought of that abstract, and how Cytosorb compared. I just got home and discovered he had replied late today (TWO days for a reply--not bad!). Here is what he said (I'm cut and pasting the entire e-mail verbatim.): ------------------------------- Thursday May 19, 2010 5:54 PM Dear Xxxxxx, Thank you for your email. Sorry I did not see that you had sent this email until just now. This group has been actively trying to treat a number of conditions with their PMMA membrane hemodiafilter with the goal of trying to reduce cytokines. Cytokines bind to the membrane and are then removed from blood. These membrane based approaches have the inherent weakness of only having 1-3 square meters of surface area on which to bind cytokines, thereby greatly limiting their capacity. They get saturated relatively quickly, limiting their effectiveness. Although the researchers tout their technology, please let me know if you have come across any randomized controlled clinical trials on their technology? They typically treat a consecutive group of affected patients, but do not compare them to a control cohort. At the end of the day, would these patients have gotten better even without the treatment? We don’t know, but that is supposed to be the purpose of doing a randomized controlled trial. This has been the general weakness of most Japanese studies on blood purification. Though I would say the Japanese are big believers in blood purification to treat disease. Another recent example of a non-controlled study. An abstract was just published in Minerva Anestesiology claiming that treatment of 12 consecutive septic patients with a Toraymyxin column “reduces” plasma levels of cytokines. First, this is hard to believe since there have been a number of studies showing that Toraymyxin does not remove cytokines well. Second, if you read the abstract, how do they know the device removes cytokines? They do not measure cytokines going into the device and then coming out of the device at an instantaneous point in time. Instead, they measured plasma cytokine levels 24 hours before and then 24 hours after treatment and showed that they decreased. A lot can happen in 48 hours. This might have nothing to do with Toraymyxin. One could argue that the patients were on antibiotics and just got better, hence the lower cytokine levels. This study needs a control arm. CytoSorbents is running one of the largest randomized controlled trials for the treatment of cytokine storm in sepsis. Few others can say that. We are one of the true pioneers in this space. Hopefully this helps to answer your question.




Best, Phillip ____________________________ Phillip P. Chan, MD, PhD Chief Executive Officer CytoSorbents Corporation 7 Deer Park Drive, Suite K Monmouth Junction, NJ 08852 [email protected] O (732) 329-8885 ext *823 F (732) 329-8650 March 9th (warren)

Dear Xxxx, Thank you for your email. The short answer is that respiratory failure with ALI or ARDS is common amongst patients with severe sepsis…cardiovascular and/or respiratory dysfunction are very common, typically followed by renal dysfunction. I prefer evidence based medicine versus anecdotal experience. Please see the following paper: Crit Care Med 2004; 32(Suppl.):S548-S553. “Mechanical ventilation in sepsis-induced acute lung injury/acute respiratory distress syndrome: An evidence based review”. The first line from the article is: “Patients with sepsis are at increased risk for developing acute respiratory failure, and most patients with severe sepsis and septic shock will require endotracheal intubation and mechanical ventilation. Nearly 50% of patients with severe sepsis will develop acute lung injury (ALI)/acute respiratory




distress syndrome (ARDS).” Recall that there are 3 levels of sepsis: sepsis, followed by severe sepsis (sepsis with organ dysfunction like respiratory failure), followed by septic shock (severe sepsis with refractory hypotension requiring vasopressors). I am not sure what this person is referring to, but he may be talking about patients with plain sepsis. But by definition, none of these patients will have organ dysfunction or ALI/ARDS. Most of these patients will not be seen in the ICU and will get better with standard of care therapy. What we are trying to address are patients with either severe sepsis or septic shock who also have ALI or ARDS. These are patients with at least 30-35% mortality. It’s not a small market by any stretch of the imagination. Do also a search on treatments for ARDS. You will find that the only thing that can be done for these patients is supplemental oxygen and supportive care like low tidal volume mechanical ventilation (prone, high frequency, etc). That alone is a big market. Every clinical trial is a subset of the overall population that has a disease. We do not believe that targeting severe septic or septic shock patients with ALI or ARDS is a limiting factor in terms of target markets. It is a very large market. Hopefully this is helpful in clarifying the issue. Best, Phillip ____________________________ Phillip P. Chan, MD, PhD Chief Executive Officer CytoSorbents, Inc. 7 Deer Park Drive, Suite K Monmouth Junction, NJ 08852 [email protected] O (732) 329-8885 ext *823 F (732) 329-虐

Feb 16th (Warren)

I had a nagging question regarding the German trials that I was curious as to how Dr. Chan might respond, if even at all. It was regarding the 'silence' in recent trials updates on the primary endpoints of




their trials, while at the same time generalzing in a favorable way on the secondary endpoints. He was gracious enough to reply, and it is posted below in it's entirety: (P.S. Anybody who might be new to this board can rest assured this is real, and not made up.) --------------------------- Dear Xxxxx, Thank you for your email and continued support. We cannot, unfortunately, police things that are said about our company or technology on message boards. We are only able to issue press releases and SEC filings that hopefully address the key concerns of shareholders. That being said, per our most recent 10-Q: "The primary endpoint of our clinical trial is cytokine reduction and is the basis of a planned CE Mark application to approve our device for clinical use in Europe. After reviewing the initial cytokine data from the first 22 patients enrolled in the protocol, our medical advisors recommended revisions to our protocol to minimize non-device related artifacts that may potentially arise if the samples are not processed or handled appropriately. The revisions to the protocol also include a provision for testing of our targeted endpoints in plasma instead of serum and changes in cytokine processing and analysis. These changes are intended to optimize the accuracy of our cytokine data for CE Mark submission. The proposed protocol changes and rationale for change were submitted to the German Ethics Committee and approved. Given these changes, cytokine data will not be statistically comparable between these 22 patients and those enrolled subsequently in the study. While the company will continue to review all patient data in the aggregate, including secondary and exploratory endpoints, the primary use of the data from the first 22 patients will be used to support the planned CE Mark application from a safety perspective. Cytokine data from all patients enrolled subsequent to these 22 patients, as well as safety data on all patients enrolled in the study, will be used for submission to the CE Mark authority. The Company has recruited thirty nine (39) patients in the clinical study to date. Management continues to anticipate that a total of approximately 80 patients, including these 22 initial patients, will be required to complete our study. The Company has the flexibility to enroll up to a total of 100 patients." Because we had previously disclosed the potential for artifact in our cytokine data in our sepsis pilot study, we did not feel that it was appropriate to comment on this primary endpoint in our November clinical update. We did not feel it was responsible to try to report on and emphasize the significance of cytokine data that could have been biased by artifact. Rather than do this, we elected to omit this data from the update. Under the current trial protocol, we have addressed all of the known issues with cytokine processing, handling and testing in our trial. So hopefully our cytokine data that we submit for CE Mark approval will be as clean as we can make it. Thank you again for your support,




Phillip

Jan 28th (deageno)

Well, that doubt (can't help it) that i used to have with regards to most having on this board as stating they've got replies from none other than the CEO himself regarding questions etc, has been put to rest good and proper. From: [email protected] Sent: Wednesday, 27 January 2010 11:33:09 PM To: HK ([email protected]); [email protected] Dear HK, Thank you for your email and I apologize for the delay. I believe I was travelling back from San Francisco when you sent it, and I must have overlooked it. Although I cannot answer some of your questions specifically, what I can say is that we have an active, ongoing business development program, we expect enrollment to increase in Q1, and that we view Asia, partcularly China and India, as potentially major future markets for us. In terms of efficacy, please see our most recent clinical trial update press release in November 2009. Hopefully this helps address some of your questions. Thank you for your support. Best, Phillip




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