Cytosorbents Corp (OTCBB:CTSO) Claws Back Some More Ground

Cytosorbents Corp (OTCBB:CTSO) has been on a wild ride over the last few months. First, in August, the ticker jumped because of some analyst coverage and positive Q2 results. It peaked at $0.30, but unfortunately, it later crashed and moved sideways for quite a while. It was fluctuating between $0.20 and $0.23 and it seemed like it’s comfortable with these levels, but over the last two sessions it’s been on the run again.

On Tuesday, it jumped up by an impressive 17% on a dollar volume of more than $570 thousand and yesterday, it added another 0.7% which means that it’s currently sitting at just under $0.26 per share.

So, what’s the reason for the latest run? Is it the preliminary Q3 results that were recently announced by the company? Or is it the potential uplisting of the stock which, according to the management team, should be completed before the end of the year? And does it have anything to do with the fact that Dr. Philip Chan, CTSO‘s CEO, recently mentioned the deadly Ebola infection in one of the press releases?

Chances are, the current surge in the right direction is triggered by a combination of all of the aforementioned factors. There’s another, more important question, however: “Can CTSO keep its gains this time?”.

As we mentioned in our first paragraph, the ticker hasn’t been all that consistent recently and the numerous peaks and drops certainly raise some questions around the future performance. Even so, many people around the message boards who claim to have been with CTSO for years reckon that things are finally coming together and that a more stable chart will soon be presented. We can see why they’re excited.

The company is moving in the right direction and the revenues are growing, but perhaps the biggest step forward will be the uplisting of the stock to one of the bigger exchanges. As Dr. Chan is insistent on pointing out, being on NASDAQ or NYSEMKT will give CTSO much more exposure and will also allow some institutional investors to pour money into the company.

But here comes the next question: “If an uplisting really is coming, then why are insiders selling shares at the current levels?”. If you take a look at the recent series of Form 4’s (this link will lead you to the latest example from yesterday) you’ll see that over the last two months, Directors have been unleashing rather big amounts of stock on the open market. On the one hand, this is exerting pressure on the price and it’s preventing the ticker from making a more consistent run. On the other, it raises some questions around the aforementioned Directors’ confidence in the company’s future.

Only the insiders can give us the reasons behind their recent moves, but we should note that if everything with the uplisting process goes according to plan, they will probably regret their decision.

Unfortunately, we’ll need to wait for some time until we see if CTSO will indeed be successful in listing the stock on the major exchanges and extending the growth. In the meantime, there are some other issues that need to be considered.

Insiders are not the only ones who can flood the open market with a large amount of discounted stock. As we mentioned in our previous articles, almost 9.5 million shares were issued during the second quarter of the year as a conversion of around $1 million worth of debt (the conversion rate stands at $0.125). In addition to this, on June 30, there was $745,000 worth of notes still outstanding and convertible at a rate of $0.10 per share.

The discounted stock and any potentially toxic financing in the future could certainly put a rather big spanner in the works which is why, despite the positive figures and press releases, considering the risks is still absolutely essential.