(AMEX Symbol: XCR)

Presentation

January 14, 2008

Forward-Looking Statements

Except for statements of historical fact, the matters discussed in this presentation are forward looking and pursuant to the safe harbor provisions of the private Securities Litigation Reform Act of 1995. These forward-looking statements reflect numerous assumptions and involve a variety of risk and uncertainties, many of which are beyond the company’s control that may cause actual results to differ materially from stated expectations. These risk factors include, among others, limited operating history, difficulty in developing, exploiting, and protecting proprietary technologies, the risk that our technology may not be effective, uncertainty as to the outcome of legal proceedings, intense competition, and substantial regulation in the medical device and healthcare industries, as discussed in the Company’s periodic reports filed with the Securities and Exchange Commission, available on its website at http:/www.sec.gov.

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Management Team

• Terren PeizerExecutive Chairman

• Winson Tang, MD, FACP Chief Operating Officer

• Victor Gura, MDChief Medical Officer

• Robert Weinstein, CPA, MBAChief Financial Officer

• CEO, Chairman & Founder Hythiam

• Amgen, Vertex, Tularik, Isis, Pacific Capital Grp

• Cedars-Sinai Med. Cntr, Assoc. Clin. Prof., UCLA

• Citi Private Equity, Able Labs, GE Capital

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Selected Board Members

• Hans Polaschegg, PhD

• Dan Goldberger, MSME

• Kelly McCrann, MBA

Fresenius, Chairman - Extracorp Circ & Infusion Tech Committee

Sound Surgical, Glucon, OSI Systems, Optiscan, Nellcor

DaVita, PacificCare, KPMG, McKinsey

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Xcorporeal Highlights• Extra-corporeal medical devices that could replace the function

of failing or failed organs• Multiple initial products

– Portable Hospital Hemodialysis device– Portable Home Hemodialysis device– Wearable Artificial Kidney

• First U.S. 510(k) filing Q4, 2008 - FDA clearance expected Q1, 2009

• Minimal to low risk strategy– Prototype device tested successfully in humans– Well defined and straightforward regulatory strategy– Well delineated reimbursement codes

• Multi-billion dollar and clearly defined markets

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XcorporealRenal Replacement Therapy Devices

• Portable Hemodialysis Device - Hospital CRRT/Acute Hemodialysis

• Portable Hemodialysis Device - Home Hemodialysis – ESRD

• Wearable Artificial Kidney - Home Hemodialysis – ESRD

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Xcorporeal Hospital Portable Renal Replacement Device

• Truly portable device – Smaller (< two cubic feet) and lighter than competitor

devices (30-40 lbs)– Reduced fluid (dialysate) requirement– Easier to operate, reduced training requirement

• Fully functional– Continuous Renal Replacement Therapy (CRRT)– Intermittent Hemodialysis

• Product status– Functional prototype undergoing bench testing – FDA 510(k) filing in Q4, 2008

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Xcorporeal Proprietary Disposable Manifold

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•The complexity of setting up a dialysis machine has been reduced to a single step of inserting a proprietary manifold into themachine.

•This reduces machine size, disposable cost, and simplifies operation.

Benefits of Xcorporeal Hospital Portable Renal Replacement Device• Decrease workload for hospital ICU staff

– No plumbing requirements• Use simple tap water versus bagged dialysate

– Simple to use operator interface– Snap-in disposable unit– Simple set-up, tear down and clean-up

• Cost effective– Decrease in medical staff time (nurse, pharmacist)– Decrease in staff training downtime– No need for bagged dialysate ($180/treatment)

• Flexibility– Truly portable, no utility hookup limitations

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Portable DeviceDevelopment Timeline

Q1 Q2 Q3 Q4 Q1 Q2 2008 2009

Full Product Specification - COMPLETE

Functional Prototype - COMPLETE

Bench Testing

Industrial Design Prototype

Pre-Production Prototype

Verification & Validation

FDA Submission

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Hospital Hemodialysis Device Market

• US Market Opportunity = $1.4 billion– Growing at 10% per year

• Aging Population• Increasing severity of hospitalized patients

• Disposable Market– 242,000 patient hospitalizations per year estimated 2008– Average 8 days per hospitalization– $500 revenue per day for fluids and disposables– Disposable Market = 242,000 x 8 x $500 = $968 million

• Device Market– Market = 62,000 beds x .25/bed x $30k/machine = $465 million

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Xcorporeal Home PortableRenal Replacement Device

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• Truly portable device – Smaller (< two cubic feet) and lighter than competitor

devices (30-40 lbs)– Reduced fluid requirement– Easier to operate, reduced training requirement– No special plumbing nor electrical requirements

• Fully functional– Wide range of flow rates – treat larger patients

• Product status– Working prototype– FDA 510(k) filing in Q2 2009

Benefits of Xcorporeal HomePortable Renal Replacement Device

• Truly portable– Substantially smaller and lighter than any existing device– No utility requirements, tap water and 110VAC only

• Ease of Use– No fluid handling device– Fully disposable fluid circuit, no cleaning or sterilization– 50 – 600 ml / minute range of flow rates

• Ease of Treatment– One step, one-handed set up– Graphical user interface

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Home Use Development Timeline

Q1 Q2 Q3 Q4 Q1 Q2 2008 2009

Full Product Specification - COMPLETE

Functional Prototype - COMPLETE

Bench Testing

Industrial Design Prototype

Pre-Production Prototype

Verification & Validation

FDA SubmissionClinical Trial

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Chronic Hemodialysis Market

• U.S. Market Opportunity = $6.7 billion– 357,000 chronic dialysis patients– 3 treatments per week– $120 Medicare reimbursement / treatment– Market = 357,000 x 3 x $120 x 52 weeks = $6.7 billion

• Home hemodialysis penetration is less than 1% today but will grow because– Appropriate equipment becomes available (Xcorporeal,

NxStage, Fresenius off label)– Longer, more frequent therapy is better medicine (4+

treatments per week versus 3)– Home hemodialysis reduces capital and skilled labor

requirements

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Home Hemodialysis is a significant Growth Opportunity in ESRD

• Patient Benefits– Increased time on hemodialysis with improved

outcomes– Potential for daily dialysis– Improved quality of life: diet, sleep, time

• Provider Benefits– Decreased need for nurses/techs – Increase in revenues without need for

additional infrastructure– More frequent treatments decreases need for

expensive medications

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Home Hemodialysis Device Comparison

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  XcorporealRenal

Solutions (*) NxStageFresenius

2008K

Blood Flow Rates 50 – 600 150 - 400 50 - 600 20 - 600

Dialysate Flow Rates 50 – 500 200 - 400 50 - 200 100 - 800

Dialysate/4-hr (liters) 6 6 20 - 30 120

Dialysate Regeneration Yes Yes No No

Dry Weight (pounds) < 40 195 80 160

Size (cubic feet) < 2.0 16 5 16

Portable Yes No Partial No

Drainage Required No No Yes Yes

Installation Cost Low Medium Medium High

* Not marketed.

XcorporealWearable Artificial Kidney

• “Disruptive” technology

• Wearable, battery operated light-weight device

• Fully automated, simple to use

• Prototype tested successfully

• Successful human trials published in The Lancet & Kidney International December 2007

• 24 hrs/7 days therapy with potential to revolutionize care of ESRD patients

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Wearable Artificial KidneyFeasibility Prototype

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Waste

InfusateHeparin

Bi-Carbonate

Sorbent 3

Sorbent 2

Sorbent 1

Bi Phase Pump

Dia

lyze

rBubbleSensor

BloodSensor

MeteringPump

MeteringPump

MeteringPump

MeteringPump

Patient

Blood LoopSterile

Change weekly in clinic

Dialysate LoopChange daily at

homeDrain Valve

Wearable Artificial Kidney

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Clinical Trial Results

• Initial clinical study conducted with a prototype device at The Royal Free Hospital, London

– 8 ESRD subjects dialyzed for mean of 6.4 hrs

– Clearances of creatinine, urea, and beta-2-microglobulin achieved (chart follows)

– No adverse events reported

– Subjects were able to walk unhindered during dialysis treatment

– Presented at ASN November 5, 2007

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Clinical Trial Results

• Sustained reductions in key blood chemistries• Clearance of both small and middle molecules• Clearance meets or exceeds daily toxin production

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-50%

-45%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

0:00 2:00 4:00 6:00 8:00

Time (hrs)

% C

ha

ng

e

Urea

Creatinine

Beta2 Microglobulin

WAK Development Timeline

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 2010

Feasibility Prototype - COMPLETE

Feasibility Studies - COMPLETE

Second Generation Prototype

Longer Duration Feasibility Studies

Pre-Production Prototype

Clinical Trial

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Intellectual Property• Portable Artificial Kidney

– 18 patents pending or in process

• Wearable Artificial Kidney– Exclusive in-licensed patents

• Wearable ultra-filtration device– Wearable, self-contained, device for continuous excess fluid

management

• Wearable continuous renal replacement therapy device– Expands on patent above to include renal replacement patients

and battery-operated power source

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Selected Financial Information September 30, 2007

• Cash and Marketable Securities - $20.3 million

• Shares Outstanding - 14.4 million

• Market Capitalization - $72 million at 12/31/07

• $1.2 million monthly cash burn rate

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Company Near-Term Milestones

• Hospital Portable Hemodialysis Device– Functional Prototype (completed) Q4, 2007

– Pre-Production Prototype Q3, 2008

– FDA 510(k) submission Q4, 2008

– Commercialization target Q2, 2009

• Home Portable Hemodialysis Device– Functional Prototype (completed) Q4, 2007

– Pre-Production Prototype Q3, 2008

– Clinical trial Q2, 2009

– FDA 510(k) submission Q3, 2009

– Commercialization target Q4, 2009

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Comparable – NxStage Medical (NXTM)• Emerging growth hemodialysis company• “System One” device

– Home hemodialysis: > 2,000 patients; <0.5% market– Hospital CRRT for acute renal failure

• Financial Metrics– $560M market capitalization – 12/31/07

• 14x trailing twelve months revenues • 9x annualized Q3, 2007 revenues

– Quarter ended September 30, 2007 financial highlights• $33M in cash• $13M operating expenses• $16.1M operating loss

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Comparable AcquisitionFresenius purchase of Renal Solutions

• $190 million purchase price– $100 million at closing– $60 million in one year, $30 million contingency

• Sorbent technology• Allient device

– Cleared by FDA over two years ago– Not brought to market

• Why significant for Xcorporeal– Suggests sorbent technology valuable– High acquisition price for “scarce” assets

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Xcorporeal Highlights• Extra-corporeal medical devices that could replace the function

of failing or failed organs• Multiple initial products

– Portable Hospital Hemodialysis device– Portable Home Hemodialysis device– Wearable Artificial Kidney

• First U.S. 510(k) filing Q4, 2008 - FDA clearance expected Q1, 2009

• Minimal to low risk strategy– Prototype device tested successfully in humans– Well defined and straightforward regulatory strategy– Well delineated reimbursement codes

• Multi-billion dollar and clearly defined markets

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APPENDIX

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Management Team

• Nina Peled, PhD, MBASVP - Quality & Regulatory

• James Braig, MSME

SVP - Product Dev.

• Barry Fulkerson

VP - Hardware Systems

• Russ Joseph, MS

VP - Disposable Engineer

Hansen, Cygnus, Amira, Lumenis, i-STAT, BM

Optiscan, Square One

Tech, Ohio Medical

NxStage, COBE (Prisma, CS3), Gambro

Gish Biomedical, Sorin, Baxter Healthcare

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Product Development Team

• Internal team of engineers with expertise in dialysis equipment and disposables who previously worked at Cobe, Gambro, Aksys, NxStage and Baxter

• Contract Product Development Group in Southern California to leverage the expertise of an additional 10-15 engineers

• Manufacturing to be outsourced

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Renal Disease Overview

• Acute Renal Failure– Hospital-based, majority in Intensive Care Unit– 200,000 acute renal failure patients – 50% mortality rate

• End Stage Renal Failure– Approximately 2 million “known” ESRD patients worldwide– 65% of patients expire within 5 years– Patient’s poor quality of life

• Care provided primarily outside the home• Non-ambulatory• Intermittent care – Significant peaks and valleys

– Constantly ill– Majority disabled

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Reimbursement Codes (CMS/Medicare) are Established

Procedure Code Amount Comments

Ultrafiltration

Aquapheresis

36514 $720/tx Code for plasmapheresis

Acute / CRRT HD 90935 $406/tx

Home HD 90925

90921

$1800/mo Includes all HD supplies

Outpatient HD 90925

90921

$96-123/tx Varies depending on region

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Regulatory Strategy

Device U.S. E.U. Clinical Trials

Hospital Hemodialysis

510(k) CE None

Home Hemodialysis 510(k) CE 30-40 patients

Wearable Artificial Kidney

PMA CE Estimate 100-200 patients

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Renal Replacement Therapy Market Opportunity - Company estimates

$ in millions US Europe Asia Total

Hospital Renal Replacement Device:

Disposables $968 $660 $484 $2,112

Device $465 $465 $232 $1,162

Total Hospital RR Device $1,433 $1,125 $716 $3,274

ESRD-Home Renal Replacement Device and Wearable Artificial Kidney:

Total Home RRD and WAK $6,704 $7,146 $3,537 $17,387

Total All Devices $8,137 $8,271 $4,253 $20,661

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