Unassociated Document

    UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 10-Q
 

 
x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

or

o  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number: 000-51038

MedaSorb Technologies Corporation
(Exact Name of Registrant as Specified in Its Charter)

Nevada
98-0373793
(State or Other Jurisdiction of
Incorporation Or Organization)
(I.R.S. Employer Identification No.)

7 Deer Park Drive, Suite K, Monmouth Junction, New Jersey 08852
(Address of Principal Executive Offices)
 
 (732) 329-8885     
(Registrant’s Telephone Number, Including Area Code)
 

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   þ Yes   ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes o No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer, large accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨
 
Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a
smaller reporting company)
 
Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   ¨ Yes   þ No

As of November 13, 2009 there were 60,765,816 shares of the issuer’s common stock outstanding.

 
 

 
 
MedaSorb Technologies Corporation
(a development stage company)
FORM 10-Q

TABLE OF CONTENTS
 
 
Page
PART I. FINANCIAL INFORMATION
 
   
Item 1. Financial Statements (September 30, 2009 and 2008 are unaudited)
 
Consolidated Balance Sheets
3
Consolidated Statements of Operations
4
Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
5
Consolidated Statements of Cash Flows
6
Notes to Consolidated Financial Statements
8
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
13
   
Item 3. Quantitative and Qualitative Disclosures about Market Risk
14
   
Item 4(T). Controls and Procedures
14
   
PART II. OTHER INFORMATION
 
Item 1. Legal Proceedings
15
   
Item 1A. Risk Factors
15
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
15
   
Item 3. Defaults of Senior Securities
15
   
Item 4. Submission of Matters to a Vote of Security Holders
15
   
Item 5. Other Information
15
   
Item 6. Exhibits
15

 
2

 
 
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements. 
MEDASORB TECHNOLOGIES CORPORATION
(a development stage company)

CONSOLIDATED BALANCE SHEETS
 

 
   
September 30,
   
December 31,
 
  
 
2009
   
2008
 
   
(Unaudited)
       
             
ASSETS
           
             
Current Assets:
           
Cash and cash equivalents
 
$
937,316
   
$
2,749,208
 
Short-term investments
   
     
199,607
 
Prepaid expenses and other current assets
   
64,027
     
117,003
 
                 
Total current assets
   
1,001,343
     
3,065,818
 
                 
Property and equipment - net
   
28,871
     
52,057
 
                 
Other assets
   
257,553
     
269,310
 
                 
Total long-term assets
   
286,424
     
321,367
 
                 
Total Assets
 
$
1,287,767
   
$
3,387,185
 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
               
                 
Current Liabilities:
               
Accounts payable
 
$
806,186
   
$
885,465
 
Accrued expenses and other current liabilities
   
109,649
     
92,239
 
Notes payable
   
     
50,000
 
                 
Total current liabilities
   
915,835
     
1,027,704
 
                 
Notes payable
   
     
 
Total long term liabilities
   
     
 
                 
Total liabilities
   
915,835
     
1,027,704
 
                 
Stockholders’ Equity (Deficit):
               
10% Series B Preferred Stock, Par Value $0.001, 200,000 shares authorized at September 30, 2009 and December 31, 2008, respectively; 58,052.54 and 55,558.64 shares issued and outstanding, respectively
   
58
     
55
 
10% Series A Preferred Stock, Par Value $0.001, 12,000,000 shares authorized at September 30, 2009 and December 31, 2008, respectively; 8,248,969 and 8,793,060 shares issued and outstanding, respectively
   
8,249
     
8,793
 
Common Stock, Par Value $0.001, 500,000,000 Shares authorized at September 30, 2009 and December 31, 2008, respectively, 48,111,587 and 25,263,517 shares issued and outstanding, respectively
   
48,112
     
25,264
 
Additional paid-in capital
   
78,744,551
     
77,786,850
 
Deficit accumulated during the development stage
   
(78,429,038
)
   
(75,461,481
)
Total stockholders' equity (deficit)
   
371,932
     
2,359,481
 
                 
Total Liabilities and Stockholders' Equity (Deficit)
 
$
1,287,767
   
$
3,387,185
 

See accompanying notes to consolidated financial statements. 

 
3

 
 
MEDASORB TECHNOLOGIES CORPORATION
(a development stage company)

CONSOLIDATED STATEMENTS OF
OPERATIONS
 

 
   
Period from
                         
   
January
22,1997
                         
   
(date of
inception) to
   
Nine months ended
September 30,
   
Three months ended
September 30,
 
   
September 30,
2009
   
 2009
   
2008
   
2009
   
2008
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
Revenue
 
$
   
$
   
$
   
$
   
$
 
                                         
Expenses:
                                       
                                         
Research and development
   
45,894,399
     
1,602,636
     
1,376,921
     
532,705
     
594,358
 
Legal, financial and other consulting
   
7,228,256
     
228,231
     
272,774
     
100,459
     
115,310
 
General and administrative
   
22,938,038
     
628,591
     
678,547
     
207,402
     
160,663
 
Change in fair value of management and incentive units
   
(6,055,483
)
   
     
     
     
 
                                         
Total expenses
   
70,005,210
     
2,459,458
     
2,328,242
     
840,566
     
870,331
 
                                         
Other (income)/expenses:
                                       
                                         
Gain on disposal of property and equipment
   
(21,663
)
   
     
     
     
 
Gain on extinguishment of debt
   
(216,617
)
   
     
     
     
 
Interest (income)/expense, net
   
5,592,949
     
(6,304
)
   
36,236
     
492
     
(7,580
)
Penalties associated with non-registration of Series A Preferred Stock
   
361,495
     
     
     
     
 
Total other (income)/expense, net
   
5,716,164
     
(6,304
)
   
36,236
     
492
     
(7,580
)
                                         
Loss before benefit from income taxes
   
(75,721,374
)
   
(2,453,154
)
   
(2,364,478
)
   
(841,058
)
   
(862,751
)
                                         
Benefit from income taxes
   
(248,529
)
   
     
     
     
 
Net loss
   
(75,472,845
)
   
(2,453,154
)
   
(2,364,478
)
   
(841,058
)
   
(862,751
)
Preferred Stock Dividend
   
2,956,193
     
514,403
     
735,218
     
174,638
     
154,077
 
Net Loss available to common shareholders
 
$
(78,429,038
)
 
$
(2,967,557
)
 
$
(3,099,696
)
 
$
(1,015,696
)
 
$
(1,016,828
)
                                         
Basic and diluted net loss per common share
         
$
(0.08
)
 
$
(0.12
)
 
$
(0.02
)
 
$
(0.04
)
Weighted average number of shares of
                                       
common stock outstanding
           
35,693,072
     
25,073,756
     
42,029,900
     
24,697,913
 
 
See accompanying notes to consolidated financial statements.

 
4

 
 
MEDASORB TECHNOLOGIES CORPORATION

(a development stage company)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY (DEFICIT)

 
Period from
December 31, 2008 to
September 30, 2009
(Unaudited)
 
   
Members
Equity
   
Deferred
   
Common Stock
   
Preferred Stock B
   
Preferred Stock A
   
Additional
Paid-In
   
Deficit
Accumulated
During the
Development
   
Total
Stockholders' 
Equity
 
   
(Deficiency)
   
Compensation
   
Shares
   
Par value
   
Shares
   
Par
Value
   
Shares
   
Par
Value
   
Capital
   
Stage
   
(Deficit)
 
Balance at December 31, 2008
  $     $       25,263,517     $ 25,264       55,558.64     $ 55       8,793,060     $ 8,793     $ 77,786,850     $ (75,461,481 )   $ 2,359,481  
                                                                                         
Stock based compensation – employees, consultants and directors
                                                    179,105             179,105  
                                                                                         
Issuance of Series A Preferred Stock as dividends
                                        618,232       618       88,577       (89,195 )      
                                                                                         
Issuance of Series B Preferred Stock as dividends
                            4,185.04       4                   418,500       (418,504 )      
                                                                                         
Conversion of Series A and Series B into Common
                22,848,070       22,848       (4,407.29 )     (4 )     (1,162,323 )     (1,162 )     (21,682 )            
                                                                                         
Exercise of warrants
                            2,140.10       2                   214,008             214,010  
                                                                                         
Warrant modification as inducement to exercise
                                                    14,885             14,885  
                                                                                         
Conversion of notes payable and accrued interest to Series B Preferred Stock
                            576.05       1                   64,308       (6,704 )     57,605  
                                                                                         
Net loss
                                                          (2,453,154 )     (2,453,154 )
                                                                                         
Balance at September 30, 2009
  $     $       48,111,587     $ 48,112       58,052.54     $ 58       8,248,969     $ 8,249     $ 78,744,551     $ (78,429,038 )   $ 371,932  

 
5

 
 
MEDASORB TECHNOLOGIES
CORPORATION
(a development stage company)

CONSOLIDATED STATEMENTS OF
CASH FLOWS

 
   
Period from
             
  
January 22,1997
             
  
 
(date of
inception) to
   
Nine months
ended
   
Nine months
ended
 
  
 
September
30, 2009
   
September
30, 2009
   
September
30, 2008
 
  
 
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
Cash flows from operating activities:
                 
Net loss
 
$
(75,472,845
)
 
$
(2,453,154
)
 
$
(2,364,478
)
Adjustments to reconcile net loss to net cash used in operating activities:
                       
Common stock issued as inducement to convert convertible notes payable and accrued interest
   
3,351,961
     
     
 
Issuance of common stock to consultant for services
   
30,000
     
     
 
Depreciation and amortization
   
2,379,029
     
38,263
     
77,775
 
Amortization of debt discount
   
1,000,000
     
     
 
Gain on disposal of property and equipment
   
(21,663
)
   
     
 
Gain on extinguishment of debt
   
(216,617
)
   
     
 
Interest expense paid with Series B Preferred Stock in connection with conversion of notes payable
   
3,147
     
— 
     
 3,147
 
Abandoned patents
   
183,556
     
     
 
Bad debts - employee advances
   
255,882
     
     
 
Contributed technology expense
   
4,550,000
     
     
 
Consulting expense
   
237,836
     
     
 
Management unit expense
   
1,334,285
     
     
 
Expense for issuance of warrants
   
533,648
     
14,885
     
40,354
 
Expense for issuance of options
   
1,432,600
     
179,105
     
251,540
 
Amortization of deferred compensation
   
74,938
     
     
 
Penalties in connection with non-registration event
   
361,496
     
     
 
Changes in operating assets and liabilities:
                       
Prepaid expenses and other current assets
   
(335,575
)
   
52,976
     
46,581
 
Other assets
   
(56,393
)
   
10,240
     
(23,067
Accounts payable and accrued expenses
   
2,742,652
     
(54,264
)
   
25,637
 
Accrued interest expense
   
1,823,103
     
     
 
Net cash used by operating activities
   
(55,808,960
)
   
(2,211,949
)
   
(1,942,511
)
                         
Cash flows from investing activities:
                       
Proceeds from sale of property and equipment
   
32,491
     
     
 
Purchases of property and equipment
   
(2,226,932
)
   
(6,411
)
   
 
Patent costs
   
(434,879
)
   
(7,149
)
   
(13,664
)
Purchases of short-term investments
   
(393,607
)
   
     
 
Proceeds from sale of short-term investments
   
393,607
     
199,607
     
 
Loan receivable
   
(1,632,168
)
   
     
 
                         
Net cash (used)/provided by investing activities
   
(4,261,488
)
   
186,047
     
(13,664
)
                         
Cash flows from financing activities:
                       
Proceeds from issuance of common stock
   
400,490
     
     
 
Proceeds from issuance of preferred stock
   
9,579,040
     
     
4,894,603
 
Proceeds from exercise of warrants
   
214,010
     
        214,010
         
Equity contributions - net of fees incurred
   
41,711,198
     
     
 
Proceeds from borrowings
   
8,603,631
     
     
225,000
 
Proceeds from subscription receivables
   
499,395
     
     
 
                         
Net cash provided by financing activities
   
61,007,764
     
214,010
     
5,119,603
 

See accompanying notes to consolidated financial statements.

 
6

 
 
Net change in cash and cash equivalents
   
937,316
     
(1,811,892
   
3,163,428
 
                         
Cash and cash equivalents - beginning of period
   
     
2,749,208
     
211,613
 
                         
Cash and cash equivalents - end of period
 
$
937,316
   
$
937,316
   
$
3,375,041
 
                         
Supplemental disclosure of cash flow information:
                       
                         
Cash paid during the period for interest
 
$
590,189
   
$
   
$
 
                         
Supplemental schedule of noncash investing and financing activities:
                       
                         
Note payable principal and interest conversion to equity
 
$
10,434,319
   
$
57,605
   
$
225,000
 
                         
Issuance of member units for leasehold improvements
 
$
141,635
   
$
   
$
 
                         
Issuance of management units in settlement of cost of raising capital
 
$
437,206
   
$
   
$
 
                         
Change in fair value of management units for cost of raising capital
 
$
278,087
   
$
   
$
 
                         
Exchange of loan receivable for member units
 
$
1,632,168
   
$
   
$
 
                         
Issuance of equity in settlement of accounts payable
 
$
1,609,446
   
$
   
$
 
                         
Issuance of common stock in exchange for stock subscribed
 
$
399,395
   
$
   
$
 
                         
Costs paid from proceeds in conjunction with issuance of preferred stock
 
$
768,063
   
$
   
$
147,500
 
                         
Preferred stock dividends
 
$
2,956,193
   
$
514,403
   
$
735,218
 
                         
Net effect of conversion of common stock to preferred stock prior to merger
 
$
559
   
$
   
$
 

During the nine months ended September 30, 2009 and 2008, 4,407.29 and -0- Series B Preferred Shares were converted into 12,174,834 and -0- Common shares, respectively.  During the nine months ended September 30, 2009 and 2008, 1,162,323 and -0- Series A Preferred Shares were converted into 10,673,236 and -0- Common shares, respectively.   For the period from January 22, 1997 (date of inception) to September 30, 2009, 4,407.29 Series B Preferred Shares and 1,725,601 Series A Preferred Shares were converted into 12,174,834 and 11,296,978 Common Shares, respectively.

See accompanying notes to consolidated financial statements.

 
7

 
 
MedaSorb Technologies Corporation
Notes to Consolidated Financial Statements
(UNAUDITED)
September 30, 2009

1.  BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the requirements of Form 10-Q of the Securities and Exchange Commission (the “Commission”) and include the results of MedaSorb Technologies Corporation (the “Parent”), formerly known as Gilder Enterprises, Inc., and CytoSorbents, Inc. (f/k/a MedaSorb Technologies, Inc.), its wholly-owned operating subsidiary (the “Subsidiary”), collectively referred to as “the Company.” Accordingly, certain information and footnote disclosures required in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. Interim statements are subject to possible adjustments in connection with the annual audit of the Company's accounts for the year ended December 31, 2009. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) which the Company considers necessary for the fair presentation of the Company's consolidated financial position as of September 30, 2009 and the results of its operations and cash flows for the nine and three month periods ended September 30, 2009 and 2008, and for the period January 22, 1997 (date of inception) to September 30, 2009. Results for the nine and three months ended are not necessarily indicative of results that may be expected for the entire year. The unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company and the notes thereto as of and for the year ended December 31, 2008 as included in the Company’s Form 10-K filed with the Commission on April 10, 2009.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has experienced negative cash flows from operations since inception and has a deficit accumulated during the development stage at September 30, 2009 of $78,429,038. The Company is not currently generating revenue and is dependent on the proceeds of present and future financings to fund its research, development and commercialization program. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The Company is continuing its fund-raising efforts.  Although the Company has historically been successful in raising additional capital through equity and debt financings, there can be no assurance that the Company will be successful in raising additional capital in the future or that it will be on favorable terms.  Furthermore, if the Company is successful in raising the additional financing, there can be no assurance that the amount will be sufficient to complete the Company's plans. These consolidated financial statements do not include any adjustments related to the outcome of this uncertainty.

The Company is a development stage company and has not yet generated any revenues. Since inception, the Company's expenses relate primarily to research and development, organizational activities, clinical manufacturing, regulatory compliance and operational strategic planning.  Although the Company has made advances on these matters, there can be no assurance that the Company will continue to be successful regarding these issues, nor can there be any assurance that the Company will successfully implement its long-term strategic plans.

The Company has developed an intellectual property portfolio, including 26 issued and multiple pending patents, covering materials, methods of production, systems incorporating the technology and multiple medical uses.
 
2.  PRINCIPAL BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Nature of Business
The Company, through its subsidiary, is engaged in the research, development and commercialization of medical devices with its platform blood purification technology incorporating a proprietary adsorbent polymer technology.  The Company is focused on developing this technology for multiple applications in the medical field, specifically to provide improved blood purification for the treatment of acute and chronic health complications associated with blood toxicity. As of September 30, 2009, the Company has not commenced commercial operations and, accordingly, is in the development stage.  The Company has yet to generate any revenue and has no assurance of future revenue.

Principles of Consolidation
The consolidated financial statements include the accounts of the Parent, MedaSorb Technologies Corporation, and its wholly-owned subsidiary, CytoSorbents, Inc. All significant intercompany transactions and balances have been eliminated in consolidation.

 
8

 
 
Development Stage Corporation
The accompanying consolidated financial statements have been prepared in accordance with the provisions of accounting and reporting by development stage enterprises.
 
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Short Term Investments
Short-term investments include short-term bank certificates of deposit with original maturities of between three and twelve months.  These short-term notes are classified as held to maturity and are valued at cost, which approximates fair value.  These investments are considered Level 2 investments under accounting standards for fair value measurements.
 
Property and Equipment
Property and equipment are recorded at cost less accumulated depreciation. Depreciation of property and equipment is provided for by the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the lesser of their economic useful lives or the term of the related leases. Gains and losses on depreciable assets retired or sold are recognized in the statements of operations in the year of disposal. Repairs and maintenance expenditures are expensed as incurred.

Patents
Legal costs incurred to establish patents are capitalized. When patents are issued, capitalized costs are amortized on the straight-line method over the related patent term. In the event a patent is abandoned, the net book value of the patent is written off.
 
Impairment or Disposal of Long-Lived Assets
The Company assesses the impairment of patents and other long-lived assets under accounting standards for the impairment or disposal of long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amount and fair value.
 
Research and Development
All research and development costs, payments to laboratories and research consultants are expensed when incurred.

Income Taxes
Income taxes are accounted for under the asset and liability method prescribed by accounting standards for accounting for income taxes. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax asset will not be realized. Under Section 382 of the Internal Revenue Code the net operating losses generated prior to the reverse merger may be limited due to the change in ownership. Additionally, net operating losses generated subsequent to the reverse merger may be limited in the event of changes in ownership.
 
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities. Actual results could differ from these estimates. Significant estimates in these financials are the valuation of options granted and the valuation of preferred shares issued as stock dividends.

Concentration of Credit Risk
The Company maintains cash balances, at times, with financial institutions in excess of amounts insured by the Federal Deposit Insurance Corporation. Management monitors the soundness of these institutions in an effort to minimize its collection risk of these balances.

Financial Instruments
The carrying values of cash and cash equivalents, short-term investments, accounts payable and other debt obligations approximate their fair values due to their short-term nature.

Stock-Based Compensation
The Company accounts for its stock-based compensation under the recognition requirements of accounting standards for accounting for stock-based compensation, for employees and directors whereby each option granted is valued at fair market value on the date of grant. Under these accounting standards, the fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model.
 
The Company also follows the guidance of accounting standards for accounting for equity instruments that are issued to other than employees for acquiring, or in conjunction with selling, goods or services for equity instruments issued to consultants.
 
 
9

 
 
Net Loss Per Common Share
Basic EPS is computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period. The computation of Diluted EPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings (See Note 6).
 
Effects of Recent Accounting Pronouncements
In December 2007, the FASB issued an amendment to an existing accounting standard which provides guidance related to business combinations. The amendment retains its fundamental requirements that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. This amendment also establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This amendment will apply prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. The provisions of this amendment did not have a significant impact on the Company's statements of operations or financial position.
 
In March 2008, the FASB issued a new accounting standard which provides guidance related to disclosures about derivative instruments and hedging activities and amends an existing accounting standard to expand the disclosure requirements to provide greater transparency about (i) how and why an entity uses derivative instruments, (ii) how derivative instruments and related hedge items are accounted for and its related interpretations, and (iii) how derivative instruments and related hedged items affect an entity's financial position, results of operations and cash flows. To meet those objectives, the new accounting standard requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. The new accounting standard is effective for fiscal years and interim periods beginning after November 15, 2008. The provisions of the new accounting standard did not have a significant impact on the Company's statements of operations or financial position.
 
In May 2009, the FASB issued a new accounting standard related to subsequent events, which provides guidance on events that occur after the balance sheet date but prior to the issuance of the financial statements. The new accounting standard distinguishes events requiring recognition in the financial statements and those that may require disclosure in the financial statements. Furthermore, the new accounting standard requires disclosure of the date through which subsequent events were evaluated. The new accounting standard is effective for interim and annual periods after June 15, 2009. The Company adopted the new accounting standard for the quarter ended June 30, 2009, and have evaluated subsequent events through November 13, 2009.
 
In June 2009, the FASB issued a new accounting standard which provides guidance related to the FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of a previously issued standard. The new accounting standard stipulates the FASB Accounting Standards Codification is the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. The new accounting standard is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The implementation of this standard did not have a material impact on the Company's statements of operations or financial position.
 
3.  CONVERTIBLE NOTES

The Company has outstanding Promissory Notes in the aggregate principal amount of $50,000, due in September 2009, which bear interest at the rate of 10% per annum. The holder of the Promissory notes has the option to convert, on an all-or-none basis, the entire principal and outstanding interest of their Notes into the Series B Preferred Stock issued in June 2008.  In addition, pursuant to the terms of such Promissory Notes, upon such conversion, each note holder will receive five-year warrants to purchase that number of shares of Common Stock equal to the quotient obtained by dividing (x) 25% of the principal amount of the Promissory Note being converted, by (y) $0.0362, the purchase price per share of Common Stock issuable upon conversion of the Series B Preferred Stock.

In September 2009 the holder of these Promissory Notes elected to convert in full principal and accrued interest totaling $57,605 into equity per the terms of these notes.  Accordingly, the Company issued this investor 576.05 shares of Series B Preferred stock and a five-year warrant to purchase 397,825 shares of Common Stock with an exercise price of $0.0362 per share.

In accordance with accounting standards for convertible securities with beneficial conversion features, the Company allocates the proceeds associated with the issuance of preferred stock based on the relative fair value of the preferred stock and warrants. Additionally, the Company evaluates if the embedded conversion option results in a beneficial conversion feature by comparing the relative fair value allocated to the preferred stock to the market value of the underlying common stock subject to conversion. In connection with the preferred stock issuance per the Note conversion during September 2009, the Company recorded total proceeds of $57,605. The Company allocated the total proceeds based on the related fair value as follows: $54,253 was allocated to the preferred stock and $3,352 to the warrants. Additionally, the embedded conversion option resulted in a beneficial conversion feature in the amount of $3,352. The value assigned to the warrants resulting from the relative fair value calculation as well as the value of the beneficial conversion feature is recorded as a preferred stock dividend and is presented in the consolidated statements of operations. In addition, the Company considers the guidance of accounting standards for accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own common stock and derivative instruments and hedging activities and concluded that the conversion feature embedded in the preferred stock only provides for physical settlement and there are no net settlement features. Accordingly, the Company has concluded that the conversion feature is not considered a derivative.
 
4.  STOCKHOLDERS' EQUITY (DEFICIT)

During the nine months ended September 30, 2009 the Company recorded non-cash stock dividends totaling $507,699 in connection with the issuance of 4,185.04 shares of Series B Preferred Stock and 618,232 shares of Series A Preferred Stock as a stock dividend to its preferred shareholders as of September 30, 2009. The Company has estimated the fair value of the shares issued as stock dividends based upon the last completed financing transaction involving the underlying common shares in June 2008.
 
During the nine months ended September 30, 2009, 4,407.29 Series B Preferred Shares were converted into 12,174,834 Common shares.  During the nine months ended September 30, 2009, 1,162,323 Series A Preferred Shares were converted into 10,673,236 Common shares.   
 
During the nine months ended September 30, 2009, the Company issued stock options to employees, consultants and directors resulting in aggregate compensation expense of $8,378, of which $584 and $7,794 is presented in research and development expenses and general and administrative expenses, respectively.

During the nine months ended September 30, 2009, the Company incurred stock-based compensation expense due to the amortization of unvested stock options.  The aggregate expense for the nine months ended September 30, 2009 is $170,727, of which $73,895 and $96,832 is presented in research and development expenses and general and administrative expenses, respectively.

The summary of the stock option activity for the nine months ended September 30, 2009 is as follows:
 
         
Weighted
   
Weighted
 
         
Average
   
Average
 
         
Exercise
   
Remaining
 
   
Shares
   
per Share
   
Life (Years)
 
                   
Outstanding, January 1, 2009
   
18,158,846
   
$
1.05
     
9.1
 
Granted
   
5,118,858
   
$
0.123
     
9.2
 
Cancelled
   
   
$
     
 
Exercised
   
   
$
     
 
Outstanding September 30, 2009
   
23,277,704
   
$
0.84
     
8.6
 

 
10

 

The fair value of each stock option was valued using the Black Scholes pricing model which takes into account as of the grant date the exercise price (ranging from $0.084 to $0.168 per share) and expected life of the stock option ( ranging from 5-10 years), the current price of the underlying stock and its expected volatility (approximately 25 percent), expected dividends (-0- percent) on the stock and the risk free interest rate (2.7 percent) for the term of the stock option.

At September 30, 2009, the aggregate intrinsic value of options outstanding and currently exercisable amounted to approximately $12,200.

The summary of the status of the Company’s non-vested options for the nine months ended September 30, 2009 is as follows:
 
         
Weighted
 
         
Average
 
         
Grant
Date
 
   
Shares
   
Fair
Value
 
             
Non-vested, January 1, 2009
   
6,280,604
   
$
0.05
 
Granted
   
5,118,858
   
$
0.003
 
Cancelled
   
     
 
Vested
   
(4,589,075
)
 
$
0.041
 
Exercised
   
     
 
Non-vested, September 30, 2009
   
6,810,387
   
$
.02
 
 
As of September 30, 2009, approximately $144,700 of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted average period of 0.90 years.

As of September 30, 2009, the Company has the following warrants to purchase common stock outstanding:
 
Number of Shares
   
Warrant
Exercise
 
Warrant
To be Purchased
   
Price per Share
 
Expiration Date
  15,569    
$
6.64
 
March 31, 2010
  816,691    
$
4.98
 
June 30, 2011
  1,200,000    
$
0.90
 
June 30, 2011
  900,000    
$
0.40
 
June 30, 2011
  339,954    
$
2.00
 
September 30, 2011
  52,080    
$
2.00
 
July 31, 2011
  400,000    
$
0.40
 
October 31, 2011
  240,125    
$
1.25
 
October 24, 2016
  3,986,429    
$
0.035
 
June 25,2013
  397,825    
$
0.0362
 
September 30, 2014
 
As of September 30, 2009, the Company has the following warrants to purchase Series A Preferred Stock outstanding:

 
 
  
Warrant
Exercise
  
 
Number of
 
  
Price per
  
Warrant
Shares to be
Purchased
 
  
Preferred
Share
  
Expiration
Date
  525,000    
$
1.00
 
June 30, 2011
 
If the holder of warrants for preferred stock exercises in full, the holder will receive additional five-year warrants to purchase a total of 210,000 shares of common stock at $0.40 per share.
 
In September 2009 the Company extended the expiration date of its warrants for Series B Preferred stock by 10 calendar days and offered an additional warrant for common stock as inducement for the Series B warrant holders to exercise their warrants.  The additional warrant offered to participants in the exercise of Series B warrants was a twelve (12) month option to purchase one (1) dollar in Common Stock at an exercise price of $0.107 per share, for every one (1) dollar of Series B warrants they exercise.  For this modification of the Series B warrant the Company recorded a non-cash charge of approximately $15,000.  The warrants were granted subsequent to the close of the third quarter and accordingly, a non-cash charge of approximately $2 will be recorded in the fourth quarter of 2009.

As of September 30, 2009 Series B warrant holders had exercised warrants to purchase 2,140.1 shares of Series B which had an exercise price of $100 per share.  From this exercise of these warrants the Company received net cash proceeds of $214,010.

As of September 30, 2009, the Company has the following warrants to purchase Series B Preferred Stock outstanding:

 
 
  
Warrant
Exercise
  
 
Number of
 
  
Price per
  
Warrant
Shares to be
Purchased
 
  
Preferred
Share
  
Expiration
Date
  12,859.9    
$
100.00
 
October 5, 2009

 
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5.  COMMITMENTS AND CONTINGENCIES

Employment Agreements

The Company has employment agreements with certain key executives through December 2009. The agreements provide for annual base salaries of varying amounts.

Litigation
 
The Company is currently not involved, but may at times be involved in various claims and legal actions.  Management is currently of the opinion that these claims and legal actions would have no merit, and any ultimate outcome will not have a material adverse impact on the consolidated financial position of the Company and/or the results of its operations.
 
Royalty Agreements

Pursuant to an agreement dated August 11, 2003, an existing investor agreed to make a $4 million equity investment in the Company. These amounts were received by the Company in 2003. In connection with this agreement, the Company granted the investor a future royalty of 3% on all gross revenues received by the Company from the sale of its CytoSorb device. The Company has not generated any revenue from this product and has not incurred any royalty costs through September 30, 2009. The amount of future revenue subject to the royalty agreement could not be reasonably estimated nor has a liability been incurred, therefore, an accrual for royalty payments has not been included in the consolidated financial statements.

License Agreements

In an agreement dated September 1, 2006, the Company entered into a license agreement which provides the Company the exclusive right to use its patented technology and proprietary know how relating to adsorbent polymers for a period of 18 years. Under the terms of the agreement, MedaSorb has agreed to pay royalties of 2.5% to 5% on the sale of certain of its products if and when those products are sold commercially for a term not greater than 18 years commencing with the first sale of such product.  The Company has not generated any revenue from its products and has not incurred any royalty costs through September 30, 2009. The amount of future revenue subject to the license agreement could not be reasonably estimated nor has a liability been incurred, therefore, an accrual for royalty payments has not been included in the consolidated financial statements.

Warrant agreement

As inducement to invest additional funds in the private placement of Series B Preferred Stock, additional consideration was granted to the participants of the Series B Preferred Stock offering in the event that litigation is commenced against Medasorb prior to June 30, 2018, claiming patent infringement on certain of the Company’s issued patents.  In the event this litigation arises the Company may be required to issue warrants to purchase in the aggregate up to a maximum of ten million shares of Common Stock subject to certain adjustments.  Through September 30, 2009 no such litigation has arisen and due to the deemed low probability of this potential outcome; the Company has not booked a contingent liability for this agreement.
 
6. NET LOSS PER SHARE

Basic loss per share and diluted loss per share for the nine and three month periods ended September 30, 2009 and 2008 have been computed by dividing the net loss for each respective period by the weighted average number of shares outstanding during that period. All outstanding warrants and options representing 31,626,377 and 25,073,756 incremental shares at September 30, 2009 and 2008, respectively, as well as shares issuable upon conversion of Series A and Series B Preferred Stock and Preferred Stock Warrants representing 232,547,948 and 182,285,696 incremental shares at September 30, 2009 and 2008, respectively, have been excluded from the computation of diluted loss per share as they are anti-dilutive.

7. SUBSEQUENT EVENTS

The Company has evaluated subsequent events occurring after the balance sheet through the date of November 13, 2009, which is the date the financial statements were issued.  

In October 2009 investors exercised warrants to purchase an additional 11,217.42 shares of Series B Preferred Stock.  From this exercise of warrants the Company received net cash proceeds of $1,096,742.
 
In October 2009, in connection with the total exercise of Series B warrants, the Company granted twelve (12) month warrants to purchase a total of 12,483,665 shares of Common Stock with an exercise price of $0.107 per share.  This Common Stock warrant issuance was part of an inducement for Series B warrant holders to exercise their warrants (See Note 4).

During October and November 2009 a total of 1,603,630 shares of Series A Preferred Stock were converted into 6,518,152 shares of Common Stock, and a total of 2,221.26 shares of Series B Preferred Stock were converted into 6,136,077 shares of Common Stock.

 
12

 

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

These unaudited condensed consolidated financial statements and management’s discussion should be read in conjunction with the audited financial statements of the Company and the notes thereto as of and for the year ended December 31, 2008 as included in the Company’s Form 10-K filed with the Securities and Exchange Commission (the “Commission”) on April 10, 2009.

Forward-looking statements

Statements contained in this Quarterly Report on Form 10-Q, other than the historical financial information, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements involve known and unknown risks, uncertainties or other factors which may cause actual results, performance or achievement of the Company to be materially different from any future results, performance or achievement expressed or implied by such forward-looking statements. Primary risk factors include, but are not limited to: ability to successfully develop commercial operations; the ability to obtain adequate financing in the future when needed; dependence on key personnel; acceptance of the Company's medical devices in the marketplace; obtaining government approvals, including required FDA approvals; compliance with governmental regulations; reliance on research and testing facilities of various universities and institutions; product liability risks; limited manufacturing experience; limited marketing, sales and distribution experience; market acceptance of the Company's products; competition; unexpected changes in technologies and technological advances; and other factors detailed in the Company's Current Report on Form 10-K filed with the Commission on April 10, 2009. 

Plan of Operations

We are a development stage company and expect to remain so for at least the next several quarters. We have not generated revenues to date and do not expect to do so until we commercialize and receive the necessary regulatory approvals to sell our proposed products. We will seek to commercialize a blood purification technology that efficiently removes middle molecular weight toxins from circulating blood and physiologic fluids.
 
We are focusing our efforts on the commercialization of our CytoSorb™ product. The first indication for CytoSorb™ will be in the adjunctive treatment of sepsis (bacterial infection of the blood), which causes systematic inflammatory response syndrome. CytoSorb™ has been designed to prevent or reduce the accumulation of high concentrates of cytokines in the bloodstream associated with sepsis. It is intended for short term use as an adjunctive device to the standard treatment of sepsis. To date, we have manufactured the CytoSorb™ device on a limited basis for testing purposes, including for use in clinical studies. We believe that current state of the art blood purification technology (such as dialysis) is incapable of effectively clearing the toxins intended to be adsorbed by our CytoSorb™ device.

Following the sepsis indication, we intend to continue our research in other acute conditions where CytoSorb™ has indicated potential in preliminary studies to prevent or reduce the accumulation of cytokines in the bloodstream. These conditions include the prevention of post-operative complications of cardiac surgery (cardiopulmonary bypass surgery) and damage to organs donated for transplant prior to organ harvest. We are also exploring the potential benefits the CytoSorb™ device may have in removing drugs from blood.

In December 2006, we submitted a proposed pilot study for approval to the FDA with respect to our CytoSorb™ device.  In the first quarter of 2007, we received approval from the FDA to conduct a limited study of five patients in the adjunctive treatment of sepsis. Based on management’s belief that proceeding with the approved limited study would add at least one year to the approval process for the United States, we made a determination to focus our efforts on obtaining regulatory approval in Europe before proceeding with the FDA.

We estimate that the market potential in Europe for our products is substantially equivalent to that in the U.S. Given the opportunity to conduct a much larger clinical study in Europe, and management’s belief that the path to a CE Mark should be faster than FDA approval, we decided to target Europe as the introductory market for our CytoSorb™ product. To accomplish the European introduction, in July 2007 we prepared and filed a request for a clinical trial with a German Central Ethics Committee. We received approval of the final study design in October of 2007.
 
We are currently approved by the German Ethics Committee to conduct a clinical study of up to 100 patients with acute respiratory distress syndrome or acute lung injury in the setting of sepsis. By December 31, 2008 we had initiated and opened for enrollment seven (7) hospital units to participate in our clinical study and had identified an additional six (6) sites that may be added to our study to accelerate enrollment. As of November 2009 the number of hospital units participating in our study has increased to twelve (12).

To date patient enrollment has been slower than originally anticipated.   The Company has taken a number of steps to improve recruitment, the most significant of which is the increase in the number of our clinical trial sites.  With more sites actively seeking to enroll patients, we expect the patient enrollment rate to increase going forward. Concurrent with the clinical study, we have commenced preparation for the CE Mark submission process.   Assuming a successful outcome of the study, the Company intends to apply for CE Mark approval.    
 
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.

 
13

 

The clinical protocol for our European clinical study has been designed to allow us to gather information to support future U.S. studies. In the event we receive the CE Mark and are able to successfully commercialize our products in the European market, we will review our plans for the United States to determine whether to conduct clinical trials in support of a 510K or PMA registration. No assurance can be given that our proposed CytoSorb™ product will work as intended or that we will be able to obtain CE Mark (or FDA) approval to sell CytoSorb™. Even if we ultimately obtain CE Mark approval, because we cannot control the timing of responses from regulators to our submissions, there can be no assurance as to when such approval will be obtained.

Our research and development costs were, $1,602,636 and $1,376,921, for the nine months ended September 30, 2009 and 2008 respectively and $532,705 and $594,358 for the three months ended September 30, 2009 and 2008, respectively. We have experienced substantial operating losses since inception. As of September 30, 2009, we had an accumulated deficit of $78,429,038 which included losses of $841,058 and $2,453,154 for the three and nine month periods ended September 30, 2009. In comparison, we had losses of $862,751 and $2,364,478 for the three and nine month periods ended September 30, 2008. Historically, our losses have resulted principally from costs incurred in the research and development of our polymer technology, and general and administrative expenses, which together were $740,107 and $2,231,227 for the three and nine month periods ended September 30, 2009 and $755,021 and $2,055,468 for three and nine month periods ended September 30, 2008.

Off-balance Sheet Arrangements

We have no off-balance sheet arrangements.

Liquidity and Capital Resources

Since inception, our operations have been financed through the private placement of our debt and equity securities. At December 31, 2008 we had cash of $2,749,208. As of September 30, 2009 we had cash on hand of $937,316, and current liabilities of $915,835.  In October 2009 an additional $1,096,742 was received by the Company from investors exercising warrants to purchase Series B Preferred Stock.

We believe that we have sufficient cash to fund our operations into the second quarter of 2010, following which we will need additional funding before we can complete our clinical studies and commercialize our products.  We will continue to seek funding for the long term needs of the Company. There can be no assurance that financing will be available on acceptable terms or at all. If adequate funds are unavailable, we may have to suspend, delay or eliminate one or more of our research and development programs or product launches or marketing efforts or cease operations.
 
Our Annual Report dated December 31, 2008 was prepared assuming we will continue as a going concern, and the auditors’ report on those financial statements expresses substantial doubt about our ability to continue as a going concern.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable to smaller reporting companies.

 Item 4(T). Controls and Procedures.

Management's annual report on internal control over financial reporting

Management of Medasorb is responsible for establishing and maintaining adequate internal control over financial reporting under the supervision of the President and Chief Executive Officer and the Chief Financial Officer. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Management evaluated the design and operation of our internal control over financial reporting as of September 30, 2009, based on the framework and criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and has concluded that such internal control over financial reporting is effective. There are no material weaknesses that have been identified by management.

An evaluation was performed, under the supervision of, and with the participation of, our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-(e) to the Securities and Exchange Act of 1934). Based on that evaluation, the Company’s management, including our Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were adequate and effective, as of September 30, 2009, to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

We do not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the system are met and cannot detect all deviations. Because of the inherent limitations in all control systems, no evaluation of control can provide absolute assurance that all control issues and instances of fraud or deviations, if any, within the Company have been detected.

This report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this report.

Changes in internal control over financial reporting

There were no significant changes in our internal controls over financial reporting that occurred subsequent to our evaluation of our internal control over financial reporting for the nine months ended September 30, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 
14

 

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In February 2008, Alkermes, Inc. commenced an action against us in the United States District Court for the District of Massachusetts, alleging that our use of the name MedaSorb infringes on Alkermes’ registered trademark “MEDISORB.” In the action, Alkermes sought an injunction against our further use of the name MedaSorb. Pursuant to a Settlement Agreement dated June 18, 2008, the Company will continue to use the name MedaSorb Technologies Corporation for the near term, but its wholly-owned subsidiary, through which the Company conducts all of its operational activities, has ceased using the “MedaSorb” name to avoid any potential confusion with Alkermes’ similarly named product.  The operating subsidiary has been renamed CytoSorbents, Inc. as of November 2008. 

Item 1A. Risk Factors

Not required to be provided by smaller reporting companies.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

In February 2009, our Series B Preferred Shareholders voted to approve to waive any Event of Default and liability due upon an Event of Default pursuant to Section 6(ix) of the Certificate of Designation of Series B Preferred Shares that shall arise from or in connection with the occurrence of a Non-Registration Event as provided in Section 11.4 of the Series B Subscription Agreement.  The Registration Statement has been filed but it has not been declared effective as of the date of this filing.  A copy of the Resolution of the Series B Preferred Shareholders to Waive the Registration Penalty is attached as Exhibit 10.1 hereto.

Item 5. Other Information

None.

Item 6. Exhibits.
 
Number
 
Description
     
31.1
 
Certification of Phillip Chan, Chief Executive Officer of the Registrant, pursuant to Rules 13a-14(a) and 15(d)-14(a) of the Securities Exchange Act of 1934
     
31.2
 
Certification of David Lamadrid, Chief Financial Officer of the Registrant, pursuant to Rules 13a-14(a) and 15(d)-14(a) of the Securities Exchange Act of 1934
     
32.1
 
Certification of Phillip Chan, Chief Executive Officer of the Registrant, pursuant to Rules 13a-14(B) and 15(d)-14(b) of the Securities Exchange Act of 1934
     
32.2
 
Certification of David Lamadrid, Chief Financial Officer of the Registrant, pursuant to Rules 13a-14(B) and 15(d)-14(b) of the Securities Exchange Act of 1934

 
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
MEDASORB TECHNOLOGIES
CORPORATION
     
Dated: November 13, 2009
By:  
/s/ David Lamadrid
 
Name: David Lamadrid
 
Title: Chief Financial Officer
 
(On behalf of the registrant and as
 principal accounting officer)

 
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