June 4th (question by warren)Dear Xxxxxx,Thank you for your email. I understand this is a sensitive point for most shareholders. In a developmentstage company, raising equity is an unfortunate necessity. However, I believe it is imperative thatmanagement does so responsibly.In terms of CytoSorbents, I thought it would be helpful to point out a few things that demonstrate whatwe are trying to accomplish.1) If you look at our income statement for 2008, 2009 and 2010, our burn is low compared to manyother development stage companies. Our entire annual net loss (excluding non-cash charges) has beenless than $3M in 2008 and 2009, which includes our clinical trial costs. Please compare the cashmanagement of our company with other development stage companies. There are some developmentstage 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. Ingeneral, that means less dilution for shareholders. We have also been very aggressive in trying to bringin 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 transitionfrom 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 asuccessful product, it could make raising money at low cost much easier, and at some point, thecompany 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 grossmargins are expected to significantly exceed the 40-60% gross margins seen in the medical deviceindustry 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 onlydilution that shareholders have suffered was from the regular quarterly issuance of Series A and SeriesB preferred dividends and the issuance of common stock warrants associated with the Series B warrantexercise. The number of fully diluted shares in the company has long been determined by the Series Bfinancing completed in June 2008. Yes, the outstanding common stock float has significantly increaseddue 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 sellingstock for insiders in a publicly-traded company undergoing a clinical trial. However, as you can seefrom 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.