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<TITLE>December 18, 2009 S-1 DOC</TITLE>
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<FONT SIZE=2><B><P ALIGN="RIGHT">As filed with the Securities
and Exchange Commission on December 18, 2009<BR>
                                               Registration No. 333-________
</B></FONT><FONT SIZE=2><B><P ALIGN="CENTER">UNITED STATES<BR>
                     SECURITIES AND EXCHANGE COMMISSION<BR>
                                   Washington, D.C. 20549</P>


<P ALIGN="CENTER">FORM S-1</P>
<FONT SIZE=2><P ALIGN="CENTER">REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</P>
</FONT><FONT SIZE=3><P ALIGN="CENTER">CARDO MEDICAL, INC.<BR>
</B></FONT><FONT SIZE=2>                  (Exact Name of registrant as specified in its charter)&nbsp;</P>

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<FONT SIZE=2><P ALIGN="CENTER">Delaware</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"> 3842</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">23-2753988</FONT></TD>
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<TR><TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">(State or other jurisdiction of</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">(Primary Standard Industrial</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">(I.R.S. Employer</FONT></TD>
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<TR><TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">incorporation or organization)</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Classification Code Number)</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Identification Number)</FONT></TD>
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<P ALIGN="CENTER"></P>
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<FONT SIZE=2><P ALIGN="CENTER">9701 Wilshire Blvd., Suite 1100, Beverly Hills, CA  90212<BR>
                  (310) 274-2036</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">(Address, including zip code, and telephone number, including area code, of registrant's principal
executive offices)</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">&nbsp;</TD>
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<FONT SIZE=2><P ALIGN="CENTER">Dr. Andrew A. Brooks, M.D., Chief Executive Officer<BR>
                  Cardo Medical, Inc.<BR>
                  9701 Wilshire Blvd., Suite 1100, Beverly Hills, CA  90212<BR>
                  Telephone: (310) 274-2036<BR>
                  Fax: (310) 271-2632<BR>
                  Please send a copy of all communications to:<BR>
                  Bradley Houser, Esq.<BR>
                  Akerman Senterfitt<BR>
                  One Southeast Third Ave., 25 <SUP>th</SUP> Floor<BR>
                  Miami, Florida 33131-1714<BR>
                  Telephone: (305) 374-5600<BR>
                  Fax: (305) 374-5095</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">(Name, address, including zip code, and telephone number, including area code, of agent for
service)</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">&nbsp;</TD>
</TR>
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<FONT SIZE=2><P ALIGN="CENTER">As soon as practicable after this Registration Statement becomes effective.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">(Approximate date of commencement of proposed sale to the public)</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="CENTER"></P>
<P>If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 check the following box.&nbsp;</FONT><FONT FACE="Wingdings" SIZE=2><FONT FACE="Wingdings"
SIZE=2>x</P>
</FONT></FONT><FONT SIZE=2><P>If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the
Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering.&nbsp;</FONT><FONT FACE="Wingdings" SIZE=2><FONT FACE="Wingdings" SIZE=2>o</P>
</FONT></FONT><FONT SIZE=2><P>If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act,
check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering.&nbsp;</FONT><FONT FACE="Wingdings" SIZE=2><FONT FACE="Wingdings" SIZE=2>o</P>
</FONT></FONT><FONT SIZE=2><P>If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act,
check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering.&nbsp;</FONT><FONT FACE="Wingdings" SIZE=2><FONT FACE="Wingdings" SIZE=2>o</P>

</FONT></FONT><FONT SIZE=2><P>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 the definitions of &quot;large accelerated filer,&quot; &quot;accelerated filer&quot; and
&quot;smaller reporting company&quot; in Rule 12b-2 of the Exchange Act.</P>

<P>(Check one):

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Large accelerated filer  &nbsp;&nbsp; <FONT FACE="WINGDINGS">&#168; <FONT FACE="Times New Roman">
</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P>
Accelerated filer &nbsp;&nbsp; <FONT FACE="WINGDINGS">&#168; <FONT FACE="Times New Roman">
</FONT></TD>
<TD WIDTH="35%" VALIGN="TOP">
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Non-accelerated filer &nbsp;&nbsp; <FONT FACE="WINGDINGS">&#168; <FONT FACE="Times New Roman">
<BR>(Do not check if a smaller reporting company)
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<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>
Smaller reporting company &nbsp;&nbsp; <FONT FACE="WINGDINGS">&#120; <FONT FACE="Times New Roman"></P>
</FONT></TD>
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<B><FONT SIZE=2><P ALIGN="CENTER">CALCULATION OF REGISTRATION FEE</P></B>

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<TR><TD WIDTH="28%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P ALIGN="CENTER">Title of each class of<BR>securities to be registered</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">Amount to be<BR>registered<SUP>(1)</SUP></B></FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P ALIGN="CENTER">Proposed<BR>maximum<BR>offering price<BR>per unit<SUP>(2)</SUP></B></FONT></TD>
<TD WIDTH="22%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P ALIGN="CENTER">Proposed<BR>maximum<BR>aggregate<BR>offering price<SUP>(2)</SUP></B></FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P ALIGN="CENTER">Amount of<BR>registration fee</B></FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">Common Stock, par value $0.001 per share</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">18,333,450</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">$ &nbsp;&nbsp; 0.61</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">$ &nbsp;&nbsp;  11,183,404.50</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">$ &nbsp;&nbsp; 624.03</FONT></TD>
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</TABLE>


<P>____________</P>

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<TR><TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="95%" VALIGN="TOP">&nbsp;</TD>
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<FONT SIZE=2><P>(1)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<FONT SIZE=2><P>The number of shares that are to be registered includes 17,757,837 shares issued in the first and second tranches of the
private placement that closed on October 27, 2009 and November 13, 2009, respectively, and 575,613 shares underlying the warrants issued
to the placement agent.</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT SIZE=2><P>(2)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<FONT SIZE=2><P>Estimated solely for the purpose of calculating the registration fee which was computed in accordance with Rule
457(c) under the Securities Act of 1933, as amended (the &quot;Securities Act&quot;), on the basis of the average bid and asked prices as
reported on the OTC Bulletin Board on December 14, 2009.</FONT></TD>
</TR>
</TABLE>


<FONT SIZE=2><P>The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the
Commission acting pursuant to said section 8(a), may determine.</P>

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<FONT SIZE=2 COLOR="#ff0000">
<P><A NAME="FIS_SUBJECT_STOCK_INFO">THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND
MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.</A></P>
</FONT>

<B><P ALIGN="CENTER">PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED&nbsp;_____________.</P></B>

<P ALIGN="CENTER"><IMG SRC="image451.gif" WIDTH=331 HEIGHT=131></P>
<B><P ALIGN="CENTER"> PROSPECTUS<BR>
</B>                  18,333,450 Shares<BR>
<B>                  CARDO MEDICAL, INC.<BR>
</B>                  Common Stock<BR>
                  OTC Bulletin Board Trading Symbol: CDOM.OB</P>


<P>The selling stockholders may offer and sell from time to time up to an aggregate of 18,333,450 shares of Cardo Medical, Inc. (the
&quot;Company&quot;) common stock that they own or that they may acquire from us upon exercise of warrants. For information
concerning the selling stockholders and the manner in which they may offer and sell shares of our common stock, see &quot;Selling
Stockholders&quot; and &quot;Plan of Distribution&quot; in this prospectus.</P>
<P>We will not receive any proceeds from the sale by the selling stockholders of their shares of common stock other than the exercise
price of the warrants if and when the warrants are exercised unless the warrants are exercised on a cashless basis.</P>

<P>On December 17, 2009, the last reported sale price for our common stock on the OTC Bulletin Board was $1.01 per share.</P>

<B><P>Investing in shares of our common stock involves a high degree of risk. You should purchase our common stock only if you can
afford to lose your entire investment. See &quot;Risk Factors,&quot; which begins on page&nbsp;3.</P>
<P>Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.</P>
</B><P>The selling stockholders have not engaged any underwriter in connection with the sale of their shares of common stock. The
selling stockholders may sell their shares of common stock in the public market based on the market price at the time of sale or at
negotiated prices. The selling stockholders may also sell their shares in transactions that are not in the public market in the manner set
forth under &quot;Plan of Distribution.&quot;</P>
<P>You should rely only on the information contained in this prospectus. We have not authorized any dealer, salesperson or other person
to provide you with information concerning us, except for the information contained in this prospectus. The information contained in this
prospectus is complete and accurate only as of the date on the front cover page of this prospectus, regardless of the time of delivery of this
prospectus or the sale of any common stock. This prospectus is not an offer to sell these securities and we are not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.</P>

<P ALIGN="CENTER">The date of this prospectus is December [ &nbsp; ], 2009.</P>


</FONT><FONT SIZE=2 COLOR="#ff0000"><B><P>
The information in this prospectus is not complete and may be changed.  We may not sell these securities until the registration statement filed with the Securities
and Exchange Commission is effective.  This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
</P> </B>

</FONT><FONT SIZE=2>


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<B><FONT SIZE=2><P ALIGN="CENTER"><A NAME="V116648_POSAM_HTM_TOC">TABLE OF CONTENTS</A></P></B>


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<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Prospectus Summary</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297508">
1</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
The Offering</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297509">
3</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Risk Factors</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297510">
3</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Forward-Looking Statements</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297511">
24</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Use Of Proceeds</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297512">
26</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Dilution</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297513">
26</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Selling Stockholders</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297514">
26</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Plan Of Distribution</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297515">
29</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Description of Securities to be Registered</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297516">
31</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Interests of Named Experts and Counsel</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297517">
32</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Information With Respect to the Registrant</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297518">
32</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297519">
44</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Management's Discussion And Analysis Of Financial Condition and Results of Operations</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297520">
45</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297521">
58</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Directors and Executive Officers</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297522">
58</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Executive Compensation</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297523">
61</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Security Ownership of Certain Beneficial Owners and Management</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297524">
63</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Transactions with Related Persons, Promoters and Certain Control Persons</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297525">
66</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Corporate Governance</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297526">
66</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Material Changes</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297527">
66</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Incorporation of Certain Information by Reference</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297528">
66</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Disclosure of Commission Position on Indemnification for Securities Act Liabilities</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297529">
66</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Legal Matters</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297530">
66</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Experts</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297531">
67</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
How to get more Information</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297532">
67</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Financial Statements</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><A HREF="#_Toc248297533">
F-1</FONT></TD>
</TR>
</Table>

<P> &nbsp; </P>
<P> &nbsp; </P>
<P> &nbsp; </P>

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<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<B><FONT SIZE=2><P ALIGN="CENTER"><A NAME="#_Toc248297508">PROSPECTUS SUMMARY</A></P>
</B><P>This summary does not contain all of the information that is important to you. You should read the entire prospectus, including the
Risk Factors and our consolidated financial statements and related notes appearing elsewhere in this prospectus before making an
investment decision.</P>
<B><P ALIGN="JUSTIFY">Our Business</P>
</B><P>Cardo Medical, Inc. ("Cardo" or the "Company"), a Delaware corporation, is an orthopedic medical device company specializing in
designing, developing and marketing reconstructive joint devices and spinal surgical devices. Reconstructive joint devices are used to
replace knee, hip and other joints that have deteriorated through disease or injury. Spinal surgical devices involve products to stabilize the
spine for fusion and reconstructive procedures. Within these areas, Cardo intends to focus on the higher-growth sectors of the orthopedic
industry, such as advanced minimally invasive instrumentation and bone-conserving high-performance implants. Cardo is focused on
developing surgical devices that will enable surgeons to bridge the gap between soft tissue-driven sports medicine techniques and
classical reconstructive surgical procedures. Cardo commercializes its reconstructive joint devices through its Cardo Orthopedics division
and its spine devices through its Cardo Spine division.</P>

<I><B><P ALIGN="CENTER">GENERAL</P>
</I>
</B><P>On June 18, 2008, Cardo Medical, LLC, a California limited liability company, entered into a Merger Agreement and Plan
of Reorganization with clickNsettle.com, Inc. ("CKST") and Cardo Acquisition, LLC, a California limited liability company and wholly-owned
subsidiary of CKST. Upon the consummation of the transactions contemplated by the Merger Agreement, CKST acquired Cardo Medical,
LLC through a merger of Cardo Medical, LLC with Cardo Acquisition, with Cardo Medical, LLC continuing as the surviving entity in the
Merger and a wholly-owned subsidiary of CKST. Pursuant to the Merger Agreement, all of the issued and outstanding units of Cardo
Medical, LLC's membership interests were converted into the right to receive shares of the common stock of CKST.  In connection with the
consummation of the Merger, CKST approved through its stockholders an amendment to its Amended and Restated Certificate of
Incorporation to change its name from "clickNsettle.com, Inc." to "Cardo Medical, Inc."</P>
<P>Our executive offices are located at 9701 Wilshire Blvd., Suite 1100, Beverly Hills, California 90212.  Our telephone number is (310)
274-2036.  Our website is www.cardomedical.com. Information on our website or any other website is not part of this prospectus.
References to &quot;we,&quot; &quot;us,&quot; &quot;our&quot; and similar words in this prospectus refer to Cardo Medical, Inc. and its
consolidated subsidiaries.</P>

<B><P ALIGN="JUSTIFY">Sale of Securities to the Selling Stockholders</P>
</B><P>On October 27, 2009, we sold, in the first tranche of a private placement, 9,949,276 shares of common stock at $0.35 per share.
On November 13, 2009, we sold, in the second tranche of a private placement, 7,808,561 shares of common stock at $0.35 per share.   In
the private placement, we issued an aggregate of 17,757,837 shares of common stock at $0.35 per share, to 74 accredited investors.  In
conjunction with the private placement, Cardo Medical, Inc. issued to the placement agent warrants to purchase 575,613 shares of the
Company's common stock, a number that is equivalent to six percent (6%) of the number of shares of common stock sold in the private
placement transaction to investors that were solicited by the placement agent (&quot;Approved Investors&quot;), at an exercise price of
$0.44 per share.  The warrants issued to the placement agent in the private placement are sometimes referred to as the &quot;Placement
Agent Warrants&quot;.  The Placement Agent Warrants expire on November 13, 2014 and may be exercised on a cashless basis.</P>
<P>We paid the placement agent for this offering a commission equal to eight percent (8%) of the gross proceeds from the offering that
was received from Approved Investors.  Additionally, the placement agent received (i) a cash non-accountable expense allowance equal to
one percent (1%) of the gross proceeds of the offering received from Approved Investors; (ii)&nbsp;reimbursement of the placement
agent's out-of-pocket expenses related to the offering, including its legal fees and expenses up to $40,000; and (iii) warrants to purchase
575,613 shares of common stock equal to six percent (6%) of the number of shares sold in the offering to Approved Investors at a exercise
price of $0.44 per share.</P>

<P ALIGN="CENTER">                      1
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<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>


<P>The registration rights agreement entered into with subscribers in the offering requires us to use commercially reasonable efforts to
have this registration statement declared effective by the Securities and Exchange Commission (&quot;SEC&quot;) as soon as practicable,
but in no event later than the one hundred twenty (120) calendar days after the final closing date or one hundred fifty (150) calendar days if
the SEC reviews the registration statement.</P>

<P> &nbsp; </P>
<P> &nbsp; </P>
<P> &nbsp; </P>
<P> &nbsp; </P>
<P> &nbsp; </P>
<P> &nbsp; </P>
<P> &nbsp; </P>
<P> &nbsp; </P>
<P> &nbsp; </P>
<P> &nbsp; </P>
<P> &nbsp; </P>

<P ALIGN="CENTER">                      2
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<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>


<B>
<P ALIGN="CENTER"><A NAME="#_Toc248297509">THE OFFERING</A></P></B>

<TABLE CELLSPACING=0 CELLPADDING=0 BORDER=0 WIDTH=90%>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>Common Stock Offered:</FONT></TD>
<TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P>The selling stockholders are offering a total of 18,333,450 shares of common stock, of which 17,757,837 shares are
outstanding and 575,613 shares are issuable upon exercise of warrants.</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="60%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>Outstanding Shares of Common Stock:</FONT></TD>
<TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P>230,293,141 shares<SUP>1,2  </SUP></FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="60%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Common Stock to be Outstanding<BR>
After Exercise of Placement Agent Warrants:</FONT></TD>
<TD WIDTH="60%" VALIGN="BOTTOM">
<FONT SIZE=2><P>230,868,754 shares<SUP>1</SUP></P>
</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="60%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>Use of Proceeds:</FONT></TD>
<TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P>We will receive no proceeds from the sale of any shares by the selling stockholders. In the event that the placement
agent exercises its warrants, we would receive the exercise price. If all warrants are exercised, we would receive approximately $253,270
unless the warrants are exercised on a cashless basis, all of which, if and when received, would be used for working capital and other
corporate purposes.</FONT></TD>
</TR>
</TABLE>

<P>___________ </P>

<TABLE CELLSPACING=0 CELLPADDING=0 BORDER=0 WIDTH=90%>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT SIZE=2><P>(1)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<FONT SIZE=2><P>As of December 14, 2009. Does not include a total of 2,358,400 shares of common stock granted under existing
options to purchase common stock.</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT SIZE=2><P>(2)</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<FONT SIZE=2><P>As of December 14, 2009. Does not include the 575,613 shares of common stock issuable upon exercise of warrants
held by the placement agent.</FONT></TD>
</TR>
</TABLE>


<B><FONT SIZE=2><A NAME="#_Toc248297510">
<P ALIGN="CENTER">RISK FACTORS</A></P>
</B>
<P>This registration statement includes &quot;forward-looking statements&quot; within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), including, in particular, certain statements about our plans, strategies and prospects. Although we
believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot
assure you that such plans, intentions or expectations will be achieved. Important factors that could cause our actual results to differ
materially from our forward-looking statements include those set forth in this Risk Factors section.  </P>
<P>An investment in the securities is speculative and involves a high degree of risk.  You should carefully consider the risk factors
described below together with the other information contained in this prospectus before making a decision to purchase our securities.  If
any of the risks described below occur, or if other risks not identified below occur, our business, business prospects, cash flow, financial
condition, stock price and results of operations could be materially adversely affected.  Under these circumstances, the trading price of our
common stock could decline, and you may lose all or part of your investment.  Additional risks and uncertainties not presently known to us
or that we currently deem immaterial also may impair our financial condition and operations.  Furthermore, references to &quot;we,&quot;
&quot;us&quot; and &quot;our&quot; are references to the Company.  </P>
<B>
<P>In addition to the risk factors related to the offering set forth below, the risk factors set forth in the SEC filings, including the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2008, and future filings with the SEC are incorporated by reference
into this prospectus.</P>
</B>
<P>You understand that, certain unique factors make an investment in the Company subject to a high degree of risk.  You have been
cautioned that an investment in the Company is speculative and involves significant risks, and that it is probably not possible to foresee
and describe all of the business, economic and financial risk factors which may affect the Company. </P>

<P ALIGN="CENTER">                      3
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<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<P>This document contains &quot;forward-looking statements,&quot; as that term is defined under the Private Securities Litigation Reform
Act of 1995, or the PSLRA.  Forward-looking statements include statements about our expectations, beliefs or intentions regarding our
product development efforts, business, financial condition, results of operations, strategies or prospects.  You can identify forward-looking
statements by the fact that these statements do not relate strictly to historical or current matters.  Rather, forward-looking statements relate
to anticipated or expected events, activities, trends or results as of the date they are made.  Because forward-looking statements relate to
matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to
differ materially from any future results expressed or implied by the forward-looking statements. </P>

<P>Any or all of our forward-looking statements in this document may turn out to be wrong.  They can be affected by inaccurate
assumptions we might make or by known or unknown risks and uncertainties.  Many factors mentioned in our discussion in this document
will be important in determining future results.  Consequently, no forward-looking statement can be guaranteed.  Actual future results may
vary materially.  While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any
obligation to do so to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking statements.  We
intend that all forward-looking statements be subject to the safe-harbor provisions of the PSLRA.  These forward-looking statements are
only predictions and reflect our views as of the date they are made with respect to future events and financial performance. </P>

<P>Risks and uncertainties, the occurrence of which could adversely affect our business, include the following: </P>

<B><P>Risks Related to Our Business, Industry and Regulatory Matters </P>
</B>
<B><I><P>We expect to incur significant losses, either directly or indirectly through the companies in which we develop our products, for at
least the next several years, and we cannot assure you that we will ever be profitable. </P>
</B></I>
<P>We expect to incur significant losses over the next several years, either directly or indirectly through the companies in which we
develop our products, as we expand our research and development activities, apply for regulatory approvals, develop additional technology
and expand our operations.  We cannot assure you that we will be successful in selling or licensing any of the products we might develop
or predict the terms we may be able to obtain in any sales or licensing transaction. </P>

<B><I><P>We have a limited number of products currently available for sale and there is a high risk that our research and development
efforts might not successfully generate any viable product candidates in the future. </P>
</B></I>
<P>We currently have nine products available for sale, all of which are in the early stages of distribution.  Other than those nine products,
we are in the preliminary stages of product identification and development, and have identified only a few potential additional products.  We
have not yet conducted preclinical studies or clinical testing on these potential additional products.  It is statistically unlikely that the few
products that we have identified as potential candidates will actually lead to successful development efforts, and we do not expect any
additional products resulting from our research to be commercially available for several years, if at all.  Our leads for potential products will
be subject to the risks and failures inherent in developing medical devices and products, including, but not limited to, the unanticipated
problems relating to research and development, product testing, confirming intellectual property rights and non-infringement, regulatory
compliance, manufacturing, marketing and competition.  Additional expenses may exceed current estimates and, therefore, adversely
affect our profitability. </P>

<B><I><P>We will need to raise additional funds in the future to fund our operations and research, and these funds may not be available
on acceptable terms, if at all. </P>
</B></I>
<P>We anticipate spending significant amounts of cash on expanding our research and development, sales and marketing efforts, and
product commercialization.  We expect proceeds from the recent private placement will be sufficient to provide working capital
requirements for the next nine months.  However, actual capital requirements may change as a result of various factors, including: </P>


<UL>
<LI>the success of our research and development efforts, and any changes in the breadth of our research and development
programs;</LI>
</UL>


<P ALIGN="CENTER">                      4
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<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<UL>
<LI>results from preclinical studies and clinical trials conducted by us or our collaborative partners or licensees, if any;</LI>
<LI>the number and timing of acquisitions and other strategic transactions;</LI>
<LI>our ability to maintain and establish corporate relationships and research collaborations;</LI>
<LI>our ability to manage growth and costs associated with this growth, and the costs associated with increased capital expenditures;</LI>
<LI>the time and costs involved in filing, prosecuting, defending and enforcing patent and intellectual property claims;</LI>
<LI> the cost and timing of obtaining and maintaining regulatory approval or clearance for our products and products in development;</LI>
<LI>the expenses we incur in manufacturing and selling our products;</LI>
<LI>the revenues generated by sales of our products; </LI>
<LI>expenses that may be incurred in pursuing or defending any potential litigation; and</LI>
<LI>the costs associated with our employee retention programs and related benefits. </LI></UL>


<P>Our primary goal as it relates to liquidity and capital resources is to attain the appropriate level of debt and equity and the resultant
cash to implement our business plan.  We may need to raise additional funds, which may not be available to us on favorable terms, if at all.
If we raise capital by issuing equity or debt securities, our existing stockholders may experience dilution and the new equity or debt
securities may have rights, preferences and privileges senior to those of our existing stockholders.  Further, if we raise additional funds
through collaboration, licensing or other similar arrangements, it may be necessary to relinquish rights to our existing or potential products
or proprietary technologies, or to grant licenses on terms that are not favorable to us.  If we are unable to raise needed capital on terms
acceptable to us, we may not be able to develop new products, enhance our existing products, execute our business plan, take advantage
of future opportunities, respond to competitive pressures or unanticipated customer requirements or continue to operate our business.  Any
of these events could have a material adverse effect on our business, financial condition and results of operations. </P>

<B><I><P>Cost containment measures, pressure from our competitors and availability of medical reimbursement may impact our ability to
sell our products at prices necessary to expand our operations and reach profitability. </P>
</B></I>
<P>Healthcare costs have risen significantly over the past decade and numerous initiatives and reforms initiated by legislators, regulators
and third-party payors to curb these costs have resulted in a consolidation trend in the healthcare industry, including hospitals.  This has
resulted in greater pricing and other competitive pressures and the exclusion of certain suppliers from important market segments as group
purchasing organizations, independent delivery networks and large single accounts continue to consolidate purchasing decisions for some
hospital customers.  We expect that market demand, government regulation, third-party reimbursement policies and societal pressures will
continue to change the national and worldwide healthcare industry, resulting in further business consolidations and alliances among
customers and competitors.  This consolidation may reduce competition, exert downward pressure on the prices of our products and
adversely impact our business, financial condition or results of operations. </P>

<P>Further, third-party payors in the United States and abroad continue to work to contain healthcare costs.  The introduction of cost
containment incentives, along with closer scrutiny of healthcare expenditures by both private health insurers and employers, has resulted
in increased discounts and contractual adjustments to hospital charges for services performed and has shifted services between inpatient
and outpatient settings.  Hospitals or physicians may respond to these cost-containment pressures by substituting lower-cost products or
other therapies for our products, the occurrence of which may adversely impact our business, financial condition and results of
operation.</P>

<P>The market for orthopedic, knee and hip surgery devices is large and growing at a significant rate.  Numerous new companies and
technologies, as well as more established companies, have entered this market.  New entrants to our markets include numerous niche
companies with a singular product focus, as well as companies owned partially by surgeons, who may have greater access than we do to
the surgeons who may use our products.  As a result of this intensified competition, we believe there will be increasing pressure to reduce
pricing of our medical devices.  If we are unable to price our products appropriately due to these competitive pressures or for other
reasons, our profit margins will shrink and our ability to invest in and grow our business and achieve profitability will decrease. </P>

<P ALIGN="CENTER">                      5
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<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<B><I><P>Sales of our products will depend on the availability of adequate reimbursement from third-party payors (such as governmental
programs, for example, Medicare and Medicaid, private insurance plans and managed care programs), both in terms of the sales volumes
and prices of our products.</P>
</B></I>
<P>Healthcare providers, such as hospitals that purchase medical devices for treating their patients, generally rely on third-party payors to
reimburse all or part of the costs and fees associated with the procedures performed with these devices.  These third-party payors may
deny reimbursement if they feel that a device is not the most cost-effective treatment available, or was used for an unapproved indication.
As such, surgeons are unlikely to use our products if they do not receive reimbursement adequate to cover the cost of their involvement in
the surgical procedures.  The failure of surgeons to use our products, or the diminished use by surgeons, may have a material adverse
impact on our business, financial condition and results of operations.</P>

<P>We also believe that future reimbursement from third-party payors may be subject to increased restrictions both in the U.S. and
international markets.  If we sell our products internationally, market acceptance may depend, in part, upon the availability of
reimbursement within the prevailing healthcare payment systems.  Reimbursement and healthcare payment systems in international
markets vary significantly by country, and include both government sponsored healthcare and private insurance. </P>

<P>Future legislation, regulation or reimbursement policies of third-party payors may adversely affect the demand for our existing products
or our products currently under development and limit our ability to sell our products on a profitable basis.  Also, third-party payors are
increasingly challenging the prices charged for medical products and services.  Particularly in the United States, third-party payors carefully
review, and increasingly challenge, the prices charged for procedures and medical products.  Also, greater numbers of insured individuals
are receiving (and will continue to receive over the next decade) their medical care through managed care programs, which monitor and
often require pre-approval of the services that a member will receive.  Many managed care programs are paying their providers on a
capitated basis, which puts the providers at financial risk for the services provided to their patients by paying them a predetermined
payment per member per month.  Challenges by third-party payors to the prices charged for medical products and services, coupled with
the increasing popularity of managed care programs, may result in hospitals and physicians seeking lower-cost alternatives to our
products, the occurrence of which could materially adversely affect our business, financial condition and results of operations.</P>

<B><I><P>Legislative or administrative reforms to the United States or international reimbursement systems in a manner that significantly
reduces reimbursement for procedures using our medical devices or denies coverage for those procedures could have a material adverse
effect on our business, financial condition or results of operations.  </P>
</B></I>
<P>We believe that the overall escalating cost of medical products and services has led to, and will continue to lead to, increased
pressures on the healthcare industry to reduce the costs of products and services.  We cannot assure you that third-party reimbursement
and coverage will be available or adequate, or that future legislation, regulation, or reimbursement policies of third-party payors will not
adversely affect the demand for our products or our ability to sell these products on a profitable basis.  We also cannot assure you that our
products will be considered cost-effective by third-party payors, that reimbursement will be available or, if available, that the third-party
payors' reimbursement policies will not adversely affect our ability to sell our products profitably. </P>

<B><I><P>We must convince orthopedic and spine surgeons that our products are an attractive alternative to existing surgical treatments
of orthopedic and spine disorders. </P>
</B></I>
<P>To be commercially successful, we believe that we will need surgeons to adopt our products as their preferred treatment option for
their patients.  Surgeons may be slow to adopt our products for the following reasons, among others:</P>


<UL>
<LI>lack of clinical evidence;</LI>
<LI>the time that must be dedicated for training;</LI>
<LI>lack of experience with our products;</LI>
<LI>perceived risks generally associated with the use of new products and procedures;</LI>
<LI>perceived risks associated with purchasing products from an early-stage medical device company;</LI>

</UL>


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<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<UL>

<LI>costs associated with the purchase of new products and equipment; and</LI>
<LI>limited availability of reimbursement within healthcare payment systems. </LI></UL>


<P>We also believe that recommendations and support of our products by influential surgeons are essential for market acceptance and
adoption.  If we do not receive support from these surgeons, surgeons and hospitals may not use our products.  As a result, we may not
achieve expected revenues and may never become profitable. </P>

<B><I><P>Our business plan relies on certain assumptions about the market for our products, which, if incorrect, may adversely affect our
business and profitability. </P>
</B></I>
<P>We believe that the aging of the general population and increasingly active lifestyles will continue and that these trends will increase
the need for our medical products.  However, the projected demand for our products could differ materially from actual demand if our
assumptions regarding these trends and acceptance of our products by the medical community prove to be incorrect or do not materialize,
or if non-surgical treatments gain more widespread acceptance as a viable alternative to our devices. </P>

<B><I><P>We expect to face significant competition as a result of the rapid technological changes in the medical devices industry, which
could have an adverse effect on our business, financial condition or results of operations. </P>
</B></I>
<P>The medical device market is highly competitive, subject to rapid change, and significantly affected by new product introductions and
other market activities of industry participants.  We expect to encounter intense competition across our product lines and in each market in
which our products are sold from various medical device companies, many of which are likely to have greater financial and marketing
resources than us.  Primary competitors are Zimmer, J&amp;J/DePuy Orthopedics, Stryker and Biomet in the hips and knees market, and
Medtronic/Sofamor Danek, J&amp;J/DePuy Spine and Synthes in the spine market.  In addition, we will face competition from a wide
range of companies that sell a single or a limited number of competitive products or which participate only in a specific market segment, as
well as from non-medical device companies, including pharmaceutical companies, which may offer alternative therapies for disease states
intended to be treated using our products. </P>

<P>Additionally, the medical device market is characterized by extensive research and development, and rapid technological change.
Developments by other companies of new or improved products, processes or technologies may make our products or proposed products
obsolete or less competitive and may negatively impact our revenues.  We will be required to devote continued efforts and financial
resources to develop or acquire scientifically advanced technologies and products, apply our technologies cost-effectively across product
lines and markets, attract and retain skilled development personnel, obtain patent and other protection for our technologies and products,
obtain required regulatory and reimbursement approvals and successfully manufacture and market our products consistent with our quality
standards.  If we fail to develop new products or enhance existing products, it could have a material adverse effect on our business,
financial condition or results of operations. </P>

<P>Many of our larger competitors are either publicly traded or divisions or subsidiaries of publicly traded companies, and enjoy several
competitive advantages over us, including:</P>


<UL>
<LI>larger and more well-established distribution networks;</LI>
<LI>established relationships with a greater number of surgeons, hospitals, other healthcare providers and third-party payors;</LI>
<LI>products supported by long-term clinical data;</LI>
<LI>greater experience in obtaining and maintaining regulatory approvals or clearances for products and product enhancements;</LI>
<LI>greater name recognition;</LI>
<LI>greater access to manufacturers, vendors and raw materials for manufacturing medical devices;</LI>
<LI>more expansive portfolios of intellectual property rights; and</LI>
<LI>greater financial and other resources for product research and development, sales and marketing, intellectual property protection and
litigation. </LI></UL>

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<B><I><P>Hospitals, surgeons, distributors and agents may have existing relationships with other medical device companies that make it
difficult for us to establish new relationships with them.  As a result, we may not be able to sell and market our products effectively. </P>
</B></I>
<P>We believe that to sell and market our products effectively, we must establish relationships with key surgeons and hospitals in the field
of orthopedic knee, hip and spinal surgery.  Many of these key surgeons and hospitals already have long-standing relationships with large,
better-known companies that dominate the medical devices industry through collaborative research programs and other relationships.
Because of these existing relationships, some of which may be contractually enforced, surgeons and hospitals may be reluctant to adopt
our products, particularly if our products compete with or have the potential to compete with products supported through their own
collaborative research programs or by these existing relationships.  Even if these surgeons and hospitals purchase our products, they may
be unwilling to enter into collaborative relationships with us to promote joint marketing programs or to provide us with clinical and financial
data. </P>

<P>We work primarily with a network of independent orthopedic product agents and distributors that generate sales leads for us, in
addition to working with our own internal direct sales force.  If these product agents and distributors believe that their relationship with us is
less beneficial than other relationships they may have with more established or well-known medical device companies, they may be
unwilling to continue their relationships with us, making it more difficult for us to sell and market our products effectively. </P>

<B><I><P>Our manufacturers may be unsuccessful in manufacturing products at the levels required to meet future market demand. </P>
</B></I>
<P>We are seeking to rapidly grow sales of our products, and, if we are successful, our growth may strain the ability of our manufacturers
to manufacture an increasingly large supply of our products.  Manufacturers regularly experience difficulties in scaling up production and
our manufacturers may face difficulties in increasing their production levels. </P>

<P>Our manufacturers may not be able to manufacture our products with consistent and satisfactory quality or in sufficient quantities to
meet demand, which could hurt our reputation, cause our customers to cancel orders or refrain from placing new orders for our products
and reduce or slow growth of sales of our products.  The increased production volume also could make it harder for us to maintain control
over expenses, manage our relationships with our manufacturers, maintain good relations with our employees or otherwise manage our
business. </P>

<B><I><P>We rely on single source manufacturers, which could impair our ability to meet demand for delivering our products in a timely
manner or within our budget. </P>
</B></I>
<P>We rely on third-party manufacturers to manufacture our products.  It is critical to our business that our contract manufacturers be able
to provide us with products in substantial quantities, in accordance with agreed upon specifications, in compliance with regulatory
requirements, at acceptable cost and on a timely basis.  Our anticipated growth could strain the ability of manufacturers to deliver an
increasingly large supply of products.  If we are unable to obtain sufficient quantities of high quality products to meet customer demand on
a timely and cost-effective basis, we could lose customers, our reputation could be harmed and our business could suffer. </P>

<P>We currently use up to seven manufacturers for each of our devices.  Our dependence on these few manufacturers involves several
risks, including limited control over pricing, availability, quality and delivery schedules.  If any one or more of our manufacturers cease to
provide us with sufficient quantities of our products in a timely manner or on terms acceptable to us, or cease to manufacture products of
acceptable quality, we would have to seek alternative sources of manufacturing.  We could experience delays while we locate and engage
alternative qualified manufacturers, and we might be unable to engage alternative manufacturers on favorable terms, if at all.  Any
disruption or increased expenses relating to our supply source could harm our sales and marketing efforts and adversely affect our ability
to generate revenue. </P>

<B><I><P>Our growth will depend on developing new products or product enhancements, requiring significant research and development,
clinical trials and regulatory approvals, all of which are expensive and time-consuming and may not result in a commercially viable product.
</P>
</B></I>

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<P>We believe that it is important for us to continue to build a more complete product offering and to enhance the products we currently
offer.  Our success in this regard will depend in part on our ability to develop and introduce new products and product enhancements to
keep pace with the rapidly changing medical device market.  We cannot assure you that we will be able to successfully develop, obtain
regulatory approval for or market new products or product enhancements, or that any of our future products or enhancements will be
accepted by the surgeons who use our products or the payors who financially support many of the procedures performed with our
products. </P>

<P>Factors affecting the success of any new product offering or enhancement to an existing product include our ability to:</P>


<UL>
<LI>properly identify and anticipate surgeon and patient needs;</LI>
<LI>fund the development of and introduce new products or product enhancements in a timely manner;</LI>
<LI>avoid infringing upon the intellectual property rights of third parties;</LI>
<LI>obtain the necessary regulatory clearances or approvals for new products or product enhancements;</LI>
<LI>demonstrate, if required, the safety and efficacy of new products with data from preclinical studies and clinical trials;</LI>
<LI>provide adequate training to potential users of our products;</LI>
<LI>receive adequate reimbursement; and</LI>
<LI>develop an effective and dedicated marketing and distribution network. </LI></UL>


<P>If we do not develop new products or product enhancements in time to meet market demand or if there is insufficient demand for these
products or enhancements, our results of operations may suffer. </P>

<B><I><P>If we choose to grow our business by acquiring new and complementary businesses, products or technologies, we may be
unable to complete these acquisitions or successfully integrate them in a cost-effective and non-disruptive manner. </P>
</B></I>
<P>We believe that our success depends in part on our ability to continually enhance and broaden our product offering in response to
changing customer demands, competitive pressures and technologies and our ability to increase our market share.  To achieve this
growth, we have completed certain acquisitions, and intend to pursue other acquisitions of complementary businesses, products or
technologies, in some cases instead of developing them ourselves.  We may be unable to successfully complete any further acquisitions,
or we may not be able to successfully integrate any acquired business, product or technology into our business or retain any key
personnel, manufacturers or distributors.  The success of any acquisition, investment or alliance undertaken will depend on a number of
factors, including:</P>


<UL>
<LI>our ability to identify suitable opportunities;</LI>
<LI>our ability to finance any acquisition, investment or alliance;</LI>
<LI>whether we are able to establish an acquisition, investment or alliance on terms that are satisfactory to us, if at all;</LI>
<LI>the strength of the other companies' underlying technology and ability to execute;</LI>
<LI>intellectual property and litigation related to these technologies or businesses; and</LI>
<LI>our ability to successfully integrate the acquired company or business with our existing business, including the ability to adequately
fund acquired in-process research and development projects. </LI></UL>


<P>These efforts could be expensive and time-consuming, disrupt our ongoing business and distract management.  If we are unable to
integrate any acquired businesses, products or technologies effectively, our business, financial condition and results of operations will be
materially adversely affected.  For example, an acquisition could materially impair our operating results by causing us to incur debt or
requiring us to amortize significant amounts of expenses, including non-cash acquisition costs, and acquired assets. </P>

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<B><I><P>We rely on our independent sales distributors and sales representatives to market and sell our products. </P>
</B></I>
<P>We depend upon independent sales distributors and sales representatives to market and sell our products, in particular due to their
sales and service expertise and relationships with customers in the marketplace.  Independent distributors and sales representatives may
terminate their relationships with us or devote insufficient sales efforts to our products for any number of reasons.  We do not control our
independent distributors and they may not be successful in implementing our marketing plans.  If we fail to maintain our existing
relationships with our independent distributors and sales representatives, our operations would suffer.  Similarly, our failure to recruit and
retain additional skilled, independent sales distributors and sales representatives could have an adverse effect on our operations.  We may
experience turnover with some of our independent sales distributors, which could adversely affect our short-term financial results while we
transition to new distributors.  Our failure to manage these transitions effectively could negatively impact our operations and profitability.
</P>

<B><I><P>We are dependent on the services of Andrew A. Brooks, M.D. and Michael Kvitnitsky, and the loss of either of them could harm
our business. </P>
</B></I>
<P>Our success depends in part upon the continued service of Andrew A. Brooks, M.D., who serves as our Chairman of the Board and
Chief Executive Officer, and Michael Kvitnitsky, who serves as our President and Chief Operating Officer.  Dr. Brooks and Mr. Kvitnitsky
are critical to the overall management of our Company as well as to the development of our technology, our culture and our strategic
direction.  The loss of either Dr. Brooks or Mr. Kvitnitsky could have a material adverse effect on our business, results of operations and
financial condition.  We have not obtained and do not expect to obtain any key-person life insurance policies on Dr. Brooks or Mr.
Kvitnitsky.</P>

<B><I><P>Failure to attract and retain skilled personnel and cultivate key academic collaborations will delay product development
programs and business development efforts. </P>
</B></I>
<P>Our success will depend on our ability to continuously attract and retain highly qualified management and scientific personnel and on
our ability to develop relationships with academic collaborators.  The competition for qualified personnel and collaborators is intense.  We
cannot assure you that we will be able to attract or retain personnel or cultivate academic collaborations.  In addition, our collaborators may
have arrangements with other companies to assist those companies in developing products that compete with ours.  Our inability to hire or
retain qualified personnel or cultivate academic collaborations would harm our business. </P>
<P> </P>
<B><I><P>If we fail to properly manage our anticipated growth, our business could suffer. </P>
</B></I>
<P>We have experienced growth in, and will continue to pursue rapid growth in, the number of surgeons using our products, the types of
products we offer and the number of states in which our products are sold.  This growth has placed and may continue to place significant
demands on our managerial, operational and financial resources and systems.  We are currently focused on increasing the size and
effectiveness of our sales force and distribution network, marketing activities, research and development efforts, inventory management
systems, management team, accounting systems and corporate infrastructure.  If we do not manage our growth effectively, the quality of
our products, our relationships with surgeons, distributors and hospitals, and our reputation could suffer. </P>

<P>We must attract and retain qualified personnel and third-party distributors and manage and train them effectively.  Personnel qualified
in the design, development, production and marketing of our products are difficult to find and hire, and enhancements of information
technology systems to support our growth are difficult to implement.  In addition, we will need to carefully monitor and manage our surgeon
services, and the quality assurance and efficiency of our manufacturers and distributors.  This managing, training and monitoring will
require allocation of valuable management resources and significant expense. </P>

<B><I><P>If we decide to market and sell our devices and products internationally, we would be subject to various risks relating to our
international activities, which could negatively impact our business and financial results. </P>
</B></I>
<P>We currently do not market or sell our products outside of the United States.  However, we may actively pursue one or more
international markets within the next few years, at which point we would be exposed to risks separate and distinct from those we face in
our U.S. operations.  Any international business we may engage in may be adversely affected by changing economic conditions in foreign
countries, as well as U.S. laws that may affect the international

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business operations of a U.S. company such as ours.  In addition,
increases or decreases in the value of the U.S. dollar relative to foreign currencies could affect our results of operations since international
sales most likely would be denominated in the functional currency of the country in which the product is sold. </P>

<P>Certain additional or different risks inherent in engaging in international business include the following:</P>


<UL>
<LI>compliance with existing and changing foreign regulatory laws and requirements;</LI>
<LI>export restrictions and controls and other government regulation relating to technology or medical devices;</LI>
<LI>foreign laws and business practices favoring local companies;</LI>
<LI>pricing pressures that we may experience internationally;</LI>
<LI>the availability and level of reimbursement within prevailing foreign healthcare payment systems or insurance providers;</LI>
<LI>shipping delays due to cross-border sales;</LI>
<LI>longer payment cycles;</LI>
<LI>difficulties and costs of establishing, staffing and managing foreign operations;</LI>
<LI>potentially adverse tax consequences, tariffs and other trade barriers;</LI>
<LI>difficulties in enforcing intellectual property rights;</LI>
<LI>difficulties in enforcing agreements and collecting receivables through certain foreign legal systems;</LI>
<LI>political and economic instability; and</LI>
<LI>international terrorism and anti-American sentiment. </LI></UL>


<P>Our exposure to each of these risks may increase our costs, impair our ability to market and sell our products and require significant
management attention, resulting in harm to our business and financial results. </P>

<B><I><P>We are subject to substantial governmental regulation that could change and thus force us to make modifications to how we
develop, manufacture and price our products. </P>
</B></I>
<P>The medical device industry is regulated extensively by governmental authorities, principally the Food and Drug Administration, or the
FDA, and corresponding state and foreign regulatory agencies.  The FDA and other federal, state and foreign governmental agencies
regulate, among other things, the development, manufacturing, clinical trials, marketing clearance and approval, promotion and sale of
medical devices. </P>

<P>In particular, the FDA permits commercial distribution of a new medical device only after the device has received clearance under
Section 510(k), or is the subject of an approved premarket approval application, or PMA.  The FDA will approve marketing a medical
device through the Section 510(k) process if it is demonstrated that the new product is substantially equivalent to other Section 510(k)-cleared
products.  The PMA process is more costly, lengthy and uncertain than the Section 510(k) clearance process.  A PMA application
must be supported by extensive data, including, but not limited to, technical, preclinical, clinical trial, manufacturing and labeling data, to
demonstrate to the FDA's satisfaction the safety and efficacy of the device for its intended use.  To date, all of our products, unless
exempt, have been cleared through the Section 510(k) process.  We have no experience in obtaining premarket approval. </P>

<P>Compliance with complex regulations is, and will continue to be, time-consuming, burdensome and expensive.  Failure to comply with
these regulations could jeopardize our ability to manufacture and sell our products and result in enforcement actions such as warning
letters, fines, injunctions, civil penalties, termination of distribution, seizures of products, total or partial suspension of production, refusal of
the FDA or other regulatory agencies to grant future clearances or approvals, or withdrawals or suspensions of current clearances or
approvals.  These enforcement actions could result in higher than anticipated costs or lower than anticipated revenue and have a material
adverse effect on our business, financial condition and results of operations.  In the most egregious cases, we could face criminal
sanctions, closure of the manufacturing facilities in which our products are manufactured, and prohibitions on the sales of our products.
</P>

<P>Foreign governmental authorities that regulate the manufacture and sale of medical devices have become increasingly vigilant, and if
we engage in sales of our products in foreign countries, these sales would be subject to rigorous foreign regulations.  In these
circumstances, we would rely heavily on our foreign independent sales

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agencies to comply with the varying regulations, and any failures on
their part could result in restrictions on the sale of our products in foreign countries.  We currently do not sell any of our products
internationally. </P>

<B><I><P>Federal regulatory reforms may adversely affect our ability to sell our products profitably. </P>
</B></I>
<P>Legislation may be drafted from time to time and introduced in Congress that could significantly change the statutory provisions
governing the clearance or approval, manufacture and marketing of a medical device in the United States.  In addition, FDA regulations
and guidance often are revised or reinterpreted by the agency in ways that may significantly affect our business and our ability to
commercialize our products.  It is impossible to predict whether legislative changes will be enacted or FDA regulations, guidance or
interpretations changed, and what the impact of these changes, if any, may be.  For example, on September 27, 2007, Congress enacted,
and the President signed into law, the Food and Drug Administration Amendments Act of 2007.  This new legislation grants significant new
powers to the FDA and imposes new obligations and requirements on both the FDA and FDA-regulated industries, including the medical
device industry.  In particular, this law requires, among other things, that the FDA propose, and ultimately implement, regulations that will
require manufacturers to label medical devices with unique identifiers unless a waiver is received from the FDA.  In addition, it reauthorizes
the FDA to collect medical device user fees and amends the existing user fee program by, among other things, reducing device application
fees and imposing new fees, including a new annual establishment registration fee.  Also, the new law authorizes the FDA to establish a
unique medical device identification system and expands the federal government's clinical trial registry and results databank to include,
among other things, information on medical device clinical trials.  While these new requirements undoubtedly will have a significant effect
on the medical device industry, we cannot yet predict the extent of that effect on our Company.  As regulations, guidance and
interpretations are issued by the FDA relating to the new legislation, its impact on the industry, as well as our business, will become
clearer.  Compliance with those regulations could require us to take additional steps, and incur additional costs, in manufacturing and
labeling products. </P>

<B><I><P>We have not yet collected long-term clinical data to support the safety of our products, and our products may, therefore, prove
to be less safe and effective than initially thought. </P>
</B></I>
<P>We obtained clearance to offer all of our products that require FDA clearance or approval through the Section 510(k) clearance
process, which is less rigorous than the PMA process and requires less supporting clinical data.  As a result of using this expedited
process, we currently lack the breadth of published long-term clinical data supporting the safety of our products and the benefits they offer
that might have been generated using the PMA process.  Because of the lack of this in-depth data, surgeons may be slow to adopt our
products, we may not have comparative data that our competitors have or are generating, and we may be subject to greater regulatory and
product liability risks.  Further, future patient studies or clinical experience may indicate that treatment with our products does not improve
outcomes.  These results would reduce demand for our products, thereby preventing us from becoming profitable.  If future results and
experience indicate that our products cause unexpected or serious complications or other unforeseen negative effects, we could be subject
to significant legal liability and harm to our business reputation.  The medical device market has been particularly prone to costly product
liability litigation.  The time and costs of any product liability litigation we may face may materially adversely affect our business, financial
condition or results of operations, even if we are ultimately victorious in any such litigation.</P>

<B><I><P>The FDA requires us to obtain new Section 510(k) clearances or premarket approvals for modifications to our approved
products.  Otherwise, we may have to cease marketing, or to recall, the modified products until clearances are obtained. </P>
</B></I>
<P>Any modification to a Section 510(k)-cleared device that could significantly affect its safety or efficacy, or that would constitute a major
change in its intended use, requires a new Section 510(k) clearance or, possibly, premarket approval.  Under FDA regulations, every
manufacturer must make this determination in the first instance, but the FDA may review any manufacturer's decision.  The FDA may not
agree with any of our decisions regarding whether new clearances or approvals are necessary.  If the FDA requires us to seek Section
510(k) clearance or premarket approval for any modification to a previously cleared product, we may be required to cease marketing, or to
recall, the modified product until we obtain clearance or approval.  This may expose us to significant regulatory fines or penalties. </P>

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<P>In addition, our products could be subject to recall if the FDA determines, for any reason, that our products are not safe or effective.
Any recall or FDA requirement that we seek additional approvals or clearances could result in delays, fines, costs associated with
modifying a product, loss of revenue, harm to our reputation and loss of customers and potential operating restrictions imposed by the
FDA.  Any product liability claim or recall would divert managerial and financial resources and could harm our reputation with customers.
We cannot assure you that we will not have product liability claims or recalls in the future, or that these claims or recalls would not have a
material adverse effect on our business. </P>

<B><I><P>If we or our third-party manufacturers fail to comply with the FDA's Quality System Regulations, the manufacture of our
products could be interrupted and our product sales and operating results could suffer. </P>
</B></I>
<P>We and some of our third-party manufacturers are required to comply with the FDA's Quality System Regulation, or QSR, which
covers the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization,
storage and shipping of our products.  In addition, we and our manufacturers will be subject to the regulations of foreign jurisdictions
regarding the manufacturing process if we market our products overseas. </P>
<P> </P>
<P>The FDA enforces the QSR through periodic and unannounced inspections of manufacturing facilities.  If our facilities or those of our
manufacturers fail to take satisfactory corrective action in response to an adverse QSR inspection, the FDA could take enforcement action,
including any of the following sanctions:</P>


<UL>
<LI>customer notifications or repair, replacement, refunds, recall, detention or seizure of our products;</LI>
<LI>operating restrictions or partial suspension or total shutdown of production;</LI>
<LI>untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;</LI>
<LI>refusing or delaying requests for Section 510(k) clearance or PMA approvals of new products or modified products;</LI>
<LI>withdrawing Section 510(k) clearances or PMA approvals;</LI>
<LI>refusal to grant export approval for our products; or</LI>
<LI>criminal prosecution. </LI></UL>


<P>If we sell our products in the European Community, we will be required to maintain certain ISO certifications and must undergo periodic
inspections by notified bodies to obtain and maintain these certifications.   We cannot assure you that we or our manufacturers will be able
to obtain or maintain all required registrations and certifications. </P>

<P>Any of these factors could impair our ability to produce our products in a cost-effective and timely manner in order to meet our
customers' demands.  We also may be required to bear other costs or take other actions that may have a negative impact on our future
sales and our ability to generate profits</P>
<B><I>
<P>We are subject to various complex laws and regulations.  Compliance with these laws and regulations is costly and time-consuming,
and failure to comply with them can have adverse consequences on our business. </P>
</B></I>
<P>U.S. federal government entities, such as the Occupational Safety and Health Administration, the Environmental Protection Agency,
the Internal Revenue Service, the Centers for Medicare and Medicaid Services and the U.S. Department of Veteran's Affairs, as well as the
FDA and regulatory authorities in other states, have each been empowered to administer certain laws and regulations applicable to us.
Many of the laws and regulations are complex, and compliance will require substantial time and effort by our officers, directors and
employees and extensive consultations with our advisors.  Because of this complexity, we cannot assure you that our efforts will be
sufficient to ensure compliance with all of these laws and regulations at any given time. </P>

<P>We are subject to audit, investigation and litigation by each of these entities to ensure compliance, each of which also can be
time-consuming, costly, divert the attention of senior management and have a significant effect on our business, even if we are found to have
been in compliance or the extent of our non-compliance is deemed immaterial.  If we are found to not be in compliance with any of these
laws and regulations, we and, in some cases, our officers and directors may be subject to fines, penalties, criminal sanctions and other
liability, any of which could have a material adverse effect on our business. </P>

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<B><P>Risks Related to Our Financial Results</P>
</B>
<B><I><P>We are an orthopedic medical device company with a limited operating history and our business may not become profitable.
</P>
</B></I>
<P>We are an orthopedic medical device company with a limited operating history.  We began commercial sales in 2007.  We currently
have the following nine products with Section 510(k) marketing clearance from the FDA: (1) Cardo Align 360 Posterior-Stabilized Total
Knee System; (2) Cardo Align 360 Cruciate Retaining Knee System; (3) Cardo Align 360 Unicompartmental Knee (used in partial knee
replacement procedures); (4) Cardo Align 360 Patello-Femoral Replacement (used in partial knee replacement procedures); (5) Cardo
Total Hip System (used in total hip replacement procedures); (6) Cardo Bipolar Hip System (two-piece product used in femoral head
replacement procedures); (7) Cardo Monopolar Hip System (one-piece product used in femoral head replacement procedures); (8) Cardo
Cervical Plate (used in neck fusion procedures); and (9) Cardo Pedicle Screw System (used in lumbar spine fusion procedures). </P>

<P>The success of our business will depend, in part, on our ability to develop and obtain regulatory clearances or approvals for
enhancements to our products or for planned products, which we may be unable to do in a timely manner, or at all.  Our success and
ability to generate revenue or be profitable also depends on our ability to establish our sales and marketing force, generate product sales
and control costs, all of which we may be unable to do.  In addition, we may not be successful in our research and development efforts to
develop enhancements of these products or to develop new products. </P>

<P>We have a limited history of operations upon which you can evaluate our business, and our operating expenses are increasing.  We
have yet to demonstrate that we can generate ongoing sufficient sales of our products to become profitable.  The extent of our future
operating losses and the timing of profitability, if at all, are difficult to predict.  Our lack of any significant operating history also limits your
ability to make a comparative evaluation of us, our products and our prospects.  Even if we do achieve profitability as planned, we may not
be able to sustain or increase profitability on an ongoing basis.</P>

<B><I><P>Our quarterly financial results are likely to fluctuate significantly because our sales prospects are uncertain.</P>
</B></I>
<P>Our quarterly operating results are difficult to predict and may fluctuate significantly from period to period, particularly because our
sales prospects are uncertain.  These fluctuations also may affect our annual operating results and may cause those results to fluctuate
unexpectedly from year to year.  The level of our revenues and results of operations at any given time will be based primarily on the
following factors:</P>


<UL>
<LI>our ability to increase sales of our products;</LI>
<LI>our ability to develop, manufacture and market new products;</LI>
<LI>results of clinical research and trials on our current or planned products;</LI>
<LI>our ability to obtain regulatory approvals;</LI>
<LI>legislative and reimbursement policy changes affecting the products we may offer or those of our competitors;</LI>
<LI>the variability of the profit margins among the products we sell;</LI>
<LI>our ability to expand and maintain an effective and dedicated sales force;</LI>
<LI>pricing pressure from competitors applicable to our products;</LI>
<LI>adverse third-party reimbursement outcomes;</LI>
<LI>timing of new product launches, acquisitions, licenses or other significant events by us or our competitors;</LI>
<LI>the ability of our manufacturers to timely provide us with an adequate supply of products and meet our quality requirements; and</LI>
<LI>interruption in the manufacturing or distribution of our products.</LI></UL>


<P>For all the foregoing reasons, it will be difficult for us to forecast demand for our products with any degree of certainty.  In addition, we
will be increasing our operating expenses as we build our commercial capabilities.  Accordingly, we may experience significant,
unanticipated quarterly losses.  Because of these factors, our operating

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results in one or more future quarters may fail to meet the
expectations of securities analysts or investors and may adversely impact the trading price of our common stock.</P>

<B><P>Risks Related to Our Intellectual Property and Potential Litigation</P>
</B>
<B><I><P>If we cannot adequately protect our patents and other intellectual property rights, we may lose market share to our competitors
and be unable to operate our business profitably.</P>
</B></I>
<P>Our success depends on our ability to protect our proprietary rights to the technologies used in our products.  We rely significantly on
patent protection, as well as a combination of trade secrets, know-how, continuing technological innovations, strategic alliances and
licensing opportunities to develop, maintain and strengthen our competitive position.  We also expect to pursue a policy of generally
obtaining patent protection in both the United States and abroad for patentable subject matter in our proprietary devices and attempt to
review third-party patents and patent applications to the extent they become known to develop an effective patent strategy, avoid infringing
third-party patents, identify licensing opportunities and monitor the patent claims of others.</P>
<P> </P>
<P>We have a number of U.S. and foreign patent applications pending in spine, hip and knee reconstructive surgery.  Although we have
filed these patent applications, we cannot assure you that any patents may issue or that, if they issue, these patents will adequately protect
our rights or permit us to gain or keep any competitive advantage.</P>

<P>The U.S. Patent and Trademark Office, or USPTO, may deny or require significant narrowing of claims in our pending patent
applications, and patents issued as a result of the pending patent applications, if any, may not provide us with significant commercial
protection or be issued in a form that is advantageous to us.  We also could incur substantial costs in proceedings before the USPTO.
These proceedings could result in adverse decisions as to the priority of our inventions and the narrowing or invalidation of claims in any
patents that may issue.  Any U.S. and foreign patents that may be issued in the future could subsequently be successfully challenged by
others and invalidated or rendered unenforceable, which could limit our ability to stop competitors from marketing and selling related
products.</P>

<P>Both the patent application process and the process of managing patent disputes can be time-consuming and expensive.  Competitors
may be able to design around our patents or develop products that provide outcomes that are comparable to our products.  Although we
have entered into confidentiality agreements and intellectual property assignment agreements with certain of our employees, consultants
and advisors as one of the ways we seek to protect our intellectual property and other proprietary technology, these agreements may not
be enforceable or may not provide meaningful protection for our trade secrets or other proprietary information in the event of unauthorized
use or disclosure or other breaches of the agreements.  Furthermore, the laws of some foreign countries may not protect our intellectual
property rights to the same extent as the laws of the United States, if at all.  Since most of our pending patent applications are for the
United States only, we lack a corresponding scope of patent protection in other countries.  Thus, we may not be able to stop a competitor
from marketing products in other countries that are similar to some of our products.</P>
<B><I>
<P>Changes to intellectual property laws may negatively impact our ability to protect our intellectual property.</P>
</B></I>
<P>There are numerous proposed changes to the patent laws and rules of the USPTO, which, if enacted, may have a significant impact on
our ability to protect our technology and enforce our intellectual property rights.  For example, proposed changes to the patent rules of the
USPTO were scheduled to take effect on November 1, 2007, which would have limited significantly the right to pursue continuation
applications.  On October 31, 2007, a temporary injunction was granted in a lawsuit against the USPTO which served to stay the
application of the proposed rules.  On April 1, 2008, the court issued its ruling that the proposed patent rules were void, thus making the
injunction permanent.  If the ruling is successfully appealed, the proposed rules may take effect and may adversely impact our ability to
prevent others from designing around our existing patents.</P>

<P>Moreover, Congress is considering several significant changes to the U.S. patent laws, including changing from a &quot;first to
invent&quot; to a &quot;first inventor to file&quot; system, requiring that patent lawsuits be brought in the forum of the defendant, requiring
the apportionment of patent damages, and creating a post-grant opposition process to challenge patents after they have issued.</P>

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<B><I><P>The medical device industry is characterized by patent and other intellectual property litigation, and we could become subject to
litigation that could be costly, result in diverting management's time and efforts, require us to pay damages, and/or prevent us from
marketing our existing or future products.</P>
</B></I>
<P>The medical device market in which we primarily participate is in large part technology-driven.  Physician customers move quickly to
new products and new technologies.  As a result, intellectual property rights, particularly patents and trade secrets, play a significant role in
product development and differentiation.  However, intellectual property litigation to defend or create market advantage is inherently
complex, unpredictable, time-consuming and costly.  Furthermore, appellate courts frequently overturn lower court patent decisions. </P>

<P>In addition, competing parties frequently file multiple suits to leverage patent portfolios across product lines, technologies and
geographies and to balance risk and exposure between the parties.  In some cases, several competitors are parties in the same
proceeding, or in a series of related proceedings, or litigate multiple features of a single class of medical devices.  These forces frequently
drive settlement not only of individual cases, but also of a series of pending and potentially related and unrelated cases.  In addition,
although monetary and injunctive relief is typically sought, remedies and restitution generally are not determined until the conclusion of the
proceedings and are frequently modified on appeal.  Accordingly, the outcomes of individual cases are difficult to time, predict or quantify
and are often dependent upon the outcomes of other cases in other geographies.</P>

<P>Certain product categories, including pedicle screws, have been subject to significant patent litigation in recent years.  Since we sell
orthopedic and spinal devices, such as pedicle screws, knee replacement devices, and cervical plates, and we recently introduced our
Accin pedicle screw system, any related litigation could harm our business.</P>

<P>We also may have to take legal action in the future to protect our patents, trade secrets or know-how or to assert them against claimed
infringement by others.  Any legal action of that type could be costly and time-consuming, and we cannot assure you that any lawsuit will
be successful.  In addition, we may not have sufficient resources to enforce our intellectual property rights or to defend our patents against
a challenge.</P>

<P>Further, we intend to protect our proprietary technology, in part, through proprietary information and inventions agreements with
employees, consultants and other parties.  These agreements with some of our employees and consultants generally contain standard
provisions requiring those individuals to assign to the employer, without additional consideration, inventions conceived or reduced to
practice by them while employed or retained by the employer, subject to customary exceptions.  If any of our employees, consultants or
others breach these agreements, or if these agreements are found to be unenforceable, competitors may learn of our trade secrets and
proprietary information.</P>

<P>For the reasons indicated above, enforcing our intellectual property rights may be costly, difficult and time-consuming.  Even if
successful, litigation to enforce our intellectual property rights or to defend our patents against challenge could be expensive and
time-consuming and could divert our management's attention.</P>

<B><I><P>Patent infringement lawsuits brought against us could have a material adverse affect on our commercial success, and our
ability to develop and sell our products and to operate profitably.</P>
</B></I><P> </P>
<P>As the number of entrants into our market increases, the possibility of a patent infringement claim against us grows.  While we make
an effort to ensure that our products do not infringe other parties' patents and proprietary rights, our products and methods may be covered
by patents held by our competitors.  In addition, our competitors may assert that future products we may market infringe their patents.</P>

<P>A patent infringement suit brought against us or any strategic partners or licensees may force us or any strategic partners or licensees
to stop or delay developing, manufacturing or selling potential products that are claimed to infringe a third party's intellectual property,
unless that party grants us or any strategic partners or licensees rights to use its intellectual property.  In those cases, we may be required
to obtain licenses to patents or proprietary rights of others in order to continue to commercialize our products.  However, we may not be
able to obtain any licenses required under any patents or proprietary rights of third parties on acceptable terms, or at all, and any licenses
may require substantial royalties or other payments by us.  Even if we, any strategic partners or licensees were able to

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obtain rights to the
third party's intellectual property, these rights may be non-exclusive, thereby giving our competitors access to the same intellectual
property.  Ultimately, we may be unable to commercialize some of our potential products or may have to cease some of our business
operations as a result of patent infringement claims, which could severely harm our business.</P>

<B><I>
<P>We may be subject to damages resulting from claims that we or our employees or consultants have wrongfully used or disclosed
alleged trade secrets of their former employers.</P>
</B></I>
<P>Some of our employees and consultants were previously employed or engaged at universities or other medical device companies,
including our competitors or potential competitors.  We could in the future be subject to claims that these employees and consultants, or
we, have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers.  Litigation
may be necessary to defend against these claims.  If we fail to defend against these claims, a court could order us to pay substantial
damages and prohibit us from using technologies or features that are essential to our products and processes, if these technologies or
features are found to incorporate or be derived from the trade secrets or other proprietary information of the former employers.  In addition,
we may lose valuable intellectual property rights or personnel.  A loss of key research personnel or their work product could hamper or
prevent our ability to commercialize certain potential products, which could severely harm our business.  Even if we are successful in
defending against these claims, litigation could result in substantial costs and be a distraction to management. </P>

<B><I><P>Fluctuations in the cost and availability of insurance could adversely affect our profitability or our risk management profile.</P>
</B></I>
<P>We hold a number of insurance policies, including product liability insurance, errors and omissions insurance, directors' and officers'
liability insurance, property insurance, general liability insurance, employee benefits liability and workers' compensation insurance.  If the
costs of maintaining adequate insurance coverage increases significantly at any time, our operating results could be materially adversely
impacted.  Likewise, if any of our current insurance coverage should become unavailable to us or become economically impractical, we
would be required to operate our business without indemnity from commercial insurance providers. </P>
<B><I>
<P>Potential future product liability claims and other litigation, including contract litigation, may adversely affect our business, reputation
and ability to attract and retain customers. </P>
</B></I>
<P>Reconstructive and spine surgery involves a high risk of serious complications, including bleeding, nerve injury, paralysis and even
death.  As a result, we are exposed to potential product liability claims that are inherent in the testing, manufacture and sale of medical
devices for surgery procedures.  Many of these medical devices are designed to be implanted in the human body for long periods of time
or indefinitely.  A number of factors could result in an unsafe condition or injury to, or death of, a patient with respect to these or other
products that we manufacture or sell, including component failures, manufacturing flaws, design defects or inadequate disclosure of
product-related risks or product-related information.  These factors could result in product liability claims, a recall of one or more products
or a safety alert relating to one or more products.  Product liability claims may be brought by individuals or by groups seeking to represent
a class.</P>

<P>In connection with our acquisition of the assets of Accin Corporation (&quot;Accin&quot;) in May 2007 (through our ownership of
Accelerated Innovation (&quot;Accelerated Innovation&quot;), one of our former subsidiaries) and as a result of the reverse merger we
completed in August 2008 (the &quot;Merger&quot;), we assumed the responsibility for any litigation or claims related to Accin's business,
including product liability claims relating to products previously sold by Accin.  The outcome of litigation, particularly class action lawsuits, is
difficult to assess or quantify.  Plaintiffs in these lawsuits often seek recovery of very large or indeterminate amounts, including not only
actual damages, but also punitive damages.  The magnitude of the potential loss relating to these lawsuits may remain unknown for
substantial periods of time.  In addition, the cost to defend against any future litigation may be significant. </P>

<P>Any product liability claim brought against us, with or without merit, could result in the increase of our insurance rates or the inability to
secure coverage in the future.  In addition, if our product liability insurance proves to be inadequate to pay a damage award, we may have
to pay the excess out of our cash reserves, which may harm our financial condition.  If longer-term patient results and experience indicate
that our products or any component cause

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tissue damage, motor impairment or other adverse effects, we could be subject to significant
liability.  Finally, even a meritless or unsuccessful product liability claim could harm our reputation in the industry, lead to significant legal
fees and result in diverting management's attention from managing our business. </P>

<P>Even if any product liability loss is covered by an insurance policy, these policies have substantial retentions or deductibles that
provide that insurance proceeds are not recoverable until the losses incurred exceed the amount of those retentions or deductibles.  To the
extent that any losses are below these retentions or deductibles, we will be responsible for paying these losses.  Paying retentions or
deductibles for a significant amount of claims could have a material adverse effect on our business, financial condition and results of
operations.</P>

<P>Further, it is possible that we may in the future be substantially self-insured with respect to general and product liability claims.  As a
result of economic factors currently impacting the insurance industry, meaningful product liability insurance coverage also may become
unavailable due to its economically prohibitive cost.  The absence of significant third-party insurance coverage increases potential
exposure to unanticipated claims and adverse decisions.  As a result, product liability claims, product recalls and other litigation in the
future, regardless of their outcome, could have a material adverse effect on our financial position, results of operations or liquidity.</P>

<B><I><P>Any claims relating to our making improper payments to physicians for consulting services, or other potential violations of
regulations governing interactions between us and healthcare providers, could be time-consuming and costly.</P>
</B></I>
<P>Our relationship with surgeons, hospitals and the marketers of our products are subject to scrutiny under various state and federal
anti-kickback, self-referral, false claims and similar laws, often referred to collectively as healthcare fraud and abuse laws.  The federal
anti-kickback laws prohibit unlawful inducements for the referral of business reimbursable under federally-funded health care programs, such
as remuneration provided to physicians to induce them to use certain medical devices reimbursable by Medicare or Medicaid.  Healthcare
fraud and abuse laws are complex and subject to evolving interpretations, and even minor, inadvertent violations potentially can give rise to
claims that the relevant law has been violated.  Certain states in which we market our products have similar anti-kickback, anti-fee splitting
and self-referral laws, imposing substantial penalties for violations.  Any violations of these laws could result in a material adverse effect on
the market price of our common stock, as well as our business, financial condition and results of operations.  We cannot assure you that
any of the healthcare fraud and abuse laws will not change or be interpreted in the future in a manner which restricts or adversely affects
our business activities or relationships with surgeons, hospitals and marketers of our products.  In addition, possible sanctions for violating
these anti-kickback laws include monetary fines, civil and criminal penalties, exclusion from Medicare and Medicaid programs and
forfeiture of amounts collected in violation of these prohibitions.</P>

<P>Federal anti-kickback laws and regulations prohibit any knowing and willful offer, payment, solicitation or receipt of any form of
remuneration by an individual or entity in return for, or to induce:</P>


<UL>
<LI>the referral of an individual for a service or product for which payment may be made by Medicare, Medicaid or other
government-sponsored healthcare program; or</LI>
<LI>purchasing, leasing, ordering or arranging for any service or product for which payment may be made by a government-sponsored
healthcare program. </LI></UL>


<P>We must comply with a variety of other laws, such as laws prohibiting false claims for reimbursement under Medicare and Medicaid,
which also can be triggered by violations of federal anti-kickback laws; Healthcare Insurance Portability and Accountability Act of 1996,
which protects the privacy of individually identifiable healthcare information; and the Federal Trade Commission Act and similar laws
regulating advertisement and consumer protections.  In certain cases, federal and state authorities pursue actions for false claims on the
basis that manufacturers and distributors are promoting unapproved or off-label uses of their products. </P>

<P>Pursuant to FDA regulations, we can market our products only for cleared or approved uses.  Although surgeons are permitted to use
medical devices for indications other than those cleared or approved by the FDA based on their medical judgment, we are prohibited from
promoting products for those off-label uses.  We market our products and provide promotional materials and training programs to surgeons
regarding the use of our products.  Although we believe our marketing, promotional materials and training programs for surgeons do not
constitute promotion of

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unapproved uses of our products, if it is determined that our marketing, promotional materials or training programs
constitute promotion of unapproved uses, we could be subject to significant fines in addition to regulatory enforcement actions, including
the issuance of a warning letter, injunction, seizure and criminal penalty. </P>

<P>The scope and enforcement of these laws is uncertain and subject to rapid change, especially in light of the lack of applicable
precedent and regulations.  We cannot assure you that federal or state regulatory authorities will not challenge or investigate our current or
future activities under these laws.  Any challenge or investigation could have a material adverse effect on our business, financial condition
and results of operations.  Any state or federal regulatory review of us, regardless of the outcome, would be costly and time-consuming.
Additionally, we cannot predict the impact of any changes in these laws, and whether or not they will be retroactive. </P>

<B><P>Risks Related to Ownership of Our Common Stock</P>
</B>
<B><I><P>Our common stock may be thinly traded. </P>
</B></I>
<P>There is a very minimal public market for our common stock.  We cannot predict how liquid the market for our common stock might
become.  Our common stock will likely be thinly traded compared to larger more widely known companies. </P>

<P>Trades of our common stock are conducted on the OTC Bulletin Board.   We anticipate applying for listing of our common stock on
NYSE AMEX LLC.  We cannot ensure that we will be able to satisfy the listing standards of the NYSE AMEX LLC or that our common
stock will be accepted for listing.  Should we fail to satisfy the initial listing standards of the NYSE AMEX LLC, or our common stock is
otherwise rejected for listing and remains listed on the OTC Bulletin Board or suspended from the OTC Bulletin Board, the trading price of
our common stock could suffer, the trading market for our common stock may be less liquid and our common stock price may be subject to
increased volatility. </P>

<P>Furthermore, for companies whose securities are traded in the OTC Bulletin Board, it is more difficult to obtain accurate stock
quotations or needed capital.  Also, because major wire services generally do not publish press releases about these companies, it is also
more difficult for them to obtain coverage for significant news and events. </P>

<P>In addition, the price at which our common stock may be sold is very unpredictable because there could be very few trades in our
common stock.  We cannot predict the extent to which an active public market for our common stock will develop or be sustained at any
time in the future.  If our common stock is thinly traded, a large block of shares traded can lead to a dramatic fluctuation in the share price.
</P>

<B><I><P>We expect that the price of our common stock will fluctuate substantially, potentially adversely affecting the ability of investors
to sell their shares. </P>
</B></I>
<P>The market price of our common stock is likely to be highly volatile and subject to wide fluctuations in response to the following factors,
many of which are generally beyond our control.  These factors may include:</P>


<UL>
<LI>volume and timing of orders for our products;</LI>
<LI>the introduction of new products or product enhancements by us or our competitors;</LI>
<LI>quarterly variations in our or our competitor's results of operations;</LI>
<LI>announcements of technological or medical innovations for treating spine, knee and hip pathologies;</LI>
<LI>our ability to develop, obtain regulatory clearance or approval for, and market new and enhanced products on a timely basis;</LI>
<LI>changes in governmental regulations or in the status of our regulatory approvals, clearances or applications, including announcements
of actions by the FDA or other regulatory agencies;</LI>
<LI>changes in the availability of third-party reimbursement in the United States or other countries;</LI>
<LI>the acquisition or divestiture of businesses, products, assets or technology;</LI>
<LI>disputes, litigation or other developments with respect to intellectual property rights or other potential legal actions;</LI>
<LI>sales of large blocks of our common stock, including sales by our executive officers and directors;</LI>

</UL>

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<UL>

<LI>changes in earnings estimates or recommendations by securities analysts; and</LI>
<LI>general market conditions and other factors, including factors unrelated to our operating performance or the operating performance of
our competitors. </LI></UL>


<P>Market price fluctuations may negatively affect the ability of investors to sell our shares at consistent prices. </P>

<B><I><P>Securities analysts may elect not to report on our common stock or may issue negative reports that adversely affect the price of
our common stock. </P>
</B></I>
<P>At this time, no securities analyst provides research coverage of our common stock.  Further, securities analysts may never provide
this coverage in the future.  Rules mandated by the Sarbanes Oxley Act of 2002 and other restrictions led to a number of fundamental
changes in how analysts are reviewed and compensated.  In particular, many investment banking firms are required to contract with
independent financial analysts for their stock research.  It may remain difficult for a company with a small market capitalization such as
ours to attract independent financial analysts that will cover our common stock.  If securities analysts do not cover our common stock, the
lack of research coverage may adversely affect our actual and potential market price and trading volume. </P>

<P>The trading market for our common stock may be affected in part by the research and reports that industry or financial analysts publish
about our business.  If one or more analysts elect to cover our Company and then downgrade the stock, the stock price may decline
rapidly.  If one or more of these analysts cease coverage of our Company, we could lose visibility in the market, which in turn could cause
our stock price to decline.  This could have a negative effect on the market price of our shares. </P>

<B><I><P>Anti-takeover provisions in our charter documents and Delaware law may discourage or prevent a change in control, even if an
acquisition would be beneficial to our stockholders, which could adversely affect our stock price and prevent attempts by our stockholders
to replace or remove our current management. </P>
</B></I>
<P>Our Certificate of Incorporation and Bylaws contain provisions that could delay or prevent a change in control of our Company or
changes in our Board of Directors that our stockholders might consider favorable.  Some of these provisions:</P>


<UL>
<LI>impose limitations on our stockholders to call special stockholder meetings; and</LI>
<LI>authorize the issuance of preferred stock which can be created and issued by the Board of Directors without prior stockholder
approval, with rights senior to those of the common stock. </LI></UL>


<P>In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit certain
business combinations with stockholders owning 15% or more of our outstanding voting stock.  These and other provisions in our
Certificate of Incorporation, our Bylaws and Delaware law could make it more difficult for stockholders or potential acquirers to obtain
control of our Board of Directors or initiate actions that are opposed by our then-current Board of Directors, including to delay or impede a
merger, tender offer or proxy contest involving our Company.  Any delay or prevention of a change in control transaction or changes in our
Board of Directors could cause the market price of our common stock to decline. </P>

<B><I><P>Because our common stock may be a &quot;penny stock,&quot; it may be more difficult for investors to sell shares of our
common stock, and the market price of our common stock may be adversely affected. </P>
</B></I>
<P>Our common stock may be a &quot;penny stock&quot; if, among other things, the stock price is below $5.00 per share, we are not
listed for trading on a national securities exchange or approved for quotation on the Nasdaq Stock Market or any other national stock
exchange, or we have not met certain net tangible asset or average revenue requirements.  Broker-dealers who sell penny stocks must
provide purchasers of these stocks with a standardized risk-disclosure document prepared by the SEC.  This document provides
information about penny stocks and the nature and level of risks involved in investing in the penny-stock market.  A broker also must give a
purchaser, orally or in writing, bid and offer quotations and information regarding broker and salesperson compensation, make a written
determination that the penny stock is a suitable investment for the purchaser, and obtain the purchaser's written agreement to the
purchase.  In addition, broker-dealers must provide customers that hold penny stock in their accounts with that broker-dealer a monthly
statement containing price and market information relating to the penny stock.  If a penny

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stock is sold to an investor in violation of the
penny stock rules, the investor may be able to cancel its purchase and get its money back. </P>

<P>If applicable, the penny stock rules may make it difficult for investors to sell their shares of our common stock.  Because of the rules
and restrictions applicable to a penny stock, there is less trading in penny stocks and the market price of our common stock may be
adversely affected.  Also, many brokers choose not to participate in penny stock transactions.  Accordingly, investors may not always be
able to resell their shares of our common stock publicly at times and prices that they feel are appropriate. </P>

<B><I><P>A significant number of shares are eligible for resale by our stockholders and the sale of those shares could adversely affect
the stock price. </P>
</B></I>
<P>A number of our outstanding shares of common stock are eligible for resale by our stockholders.  Furthermore, a significant number of
additional shares will become eligible for resale within the next nine months, or sooner, if the Company elects to waive lock-up restrictions
applicable to such shares.  If our stockholders whose shares are, or hereafter become, eligible for resale sell, or indicate an intention to
sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline. </P>

<B><I><P>Directors, executive officers, principal stockholders and affiliated entities own a significant percentage of our capital stock, and
they may make decisions that you do not consider to be in the best interests of our stockholders. </P>
</B></I>
<P>As of December 14, 2009, our directors, executive officers, principal stockholders and affiliated entities beneficially owned, in the
aggregate, approximately 58.1% of our outstanding voting securities.  As a result, if some or all of them acted together, they would have
the ability to exert substantial influence over the election of our Board of Directors and the outcome of issues requiring approval by our
stockholders.  This concentration of ownership also may have the effect of delaying or preventing a change in control of our Company that
may be favored by other stockholders.  This could prevent transactions in which stockholders might otherwise recover a premium for their
shares over current market prices. </P>

<B><I><P>Our stock price could decline as a result of our failure to meet reporting and other regulatory requirements. </P>
</B></I>
<P>Our management team is responsible for our operations, reporting and compliance.  Our failure to comply with the Sarbanes-Oxley
Act, once our Company becomes subject thereto, and/or the reporting requirements and other provisions of securities laws could
negatively affect our stock price and adversely affect our results of operations, cash flow and financial condition. </P>

<P>Operating as a small public company also requires us to make forward-looking statements about future operating results and to
provide some guidance to the public markets.  Our management team has limited experience serving in a managerial capacity in a public
company and as a result projections may not be made timely or set at expected performance levels and could materially affect the price of
our shares. Any failure to meet published forward-looking statements that adversely affect the stock price could result in losses to
investors, stockholder lawsuits or other litigation, sanctions or restrictions issued by the SEC or any stock market upon which our stock is
traded.</P>

<B><I><P>If we do not implement necessary improvements to our internal control over financial reporting in an efficient and timely
manner, or if we discover additional deficiencies and weaknesses in existing systems and controls, we could be subject to regulatory
enforcement and investors may lose confidence in our ability to operate in compliance with existing internal control rules and regulations,
either of which could result in a decline in our share price. </P>
</B></I>
<P>Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be
disclosed in company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the SEC's rules and forms.&nbsp; Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in Company reports filed or submitted under the Exchange Act is
accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate to allow
timely decisions regarding required disclosure. As required by Rules 13a-15 and 15d-15 under the Exchange Act, our chief

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executive officer and chief financial officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures as of September 30, 2009.&nbsp; Based upon their evaluation, and as a result of previously identified material weakness in
internal control over financial reporting as discussed in our Annual Report on Form 10-K for the year ended December 31, 2008, they
concluded that our disclosure controls and procedures were not effective as of September 30, 2009. The previously reported material
weaknesses in internal control over financial reporting related to (1) adequate qualified staff necessary to effectively apply the process, and
(2) methods and practices employed to report unusual transactions such as our reverse merger. Our management has discussed the
material weakness in our internal control over financial reporting with our audit committee. In an effort to remediate the identified material
weaknesses, we have documented our process and procedures governing our internal reporting. We also plan to implement further
changes to our internal control over financial reporting, including (1) a re-evaluation of our staffing needs, and (2) analysis of unusual
transactions as they are occurring to allow adequate time for multiple levels of review.  </P>

<P>Through these steps, we believe we are addressing the deficiencies that affected our internal control over financial reporting.
However, the effectiveness of any system of internal controls is subject to inherent limitations and we cannot assure you that our internal
control over financial reporting will prevent or detect all errors.  Also, management may not be able to implement necessary improvements
to internal control over financial reporting in an efficient and timely manner and may discover additional deficiencies and weaknesses in
existing systems and controls, especially if the systems and controls are tested by an increased rate of growth or the impact of
acquisitions.  In addition, upgrades or enhancements to computer systems could cause internal control weaknesses.  </P>

<P>If we are unable to establish adequate internal controls over financial reporting systems, we may encounter difficulties in the audit or
review of our financial statements by our independent public accountants, which in turn may have a material adverse effect on our ability to
comply with the reporting obligations imposed upon us by the SEC. </P>

<P>If we fail to maintain an effective system of internal control, we may be unable to produce reliable financial reports or prevent fraud.  If
we are unable to assert that our internal control over financial reporting is effective at any time in the future, or if our independent registered
public accounting firm is unable to attest to the effectiveness of internal controls, is unable to deliver a report at all or can deliver only a
qualified report, we could be subject to regulatory enforcement and investors may lose confidence in our ability to operate in compliance
with existing internal control rules and regulations, either of which could result in a decline in our share price. </P>

<B><I><P>Our status as a public company may make it more difficult to attract and retain officers and directors. </P>
</B></I>
<P>The Sarbanes-Oxley Act and new rules subsequently implemented by the SEC have required changes in corporate governance
practices of public companies.  As an operating public company, we expect these new rules and regulations to increase our compliance
costs in 2009 and beyond and to make certain activities more time-consuming and costly than if we were not an operating public company.
As an operating public company, we also expect that these new rules and regulations may make it more difficult and expensive for us to
obtain director and officer liability insurance in the future, and we may be required to accept reduced policy limits and coverage or incur
substantially higher costs to obtain the same or similar coverage.  As a result, it may be more difficult for us to attract and retain qualified
persons to serve on our Board of Directors or as executive officers. </P>

<B><I><P>Compliance with changing regulations concerning corporate governance and public disclosure may result in additional
expenses. </P>
</B></I>
<P>There have been changing laws, regulations and standards relating to corporate governance and public disclosure, including the
Sarbanes-Oxley Act, new regulations promulgated by the SEC and rules promulgated by the NYSE AMEX LLC and other national
securities exchanges.  These new or changed laws, regulations and standards are subject to varying interpretations in many cases due to
their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and
governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing
revisions to disclosure and governance practices.  As a result, our efforts to comply with evolving laws, regulations and standards are likely
to continue to result in increased general and administrative expenses and a diversion of management time and attention from revenue-
generating activities to compliance activities.  Our board members,

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<P>
Chief Executive Officer and Chief Financial Officer could face an
increased risk of personal liability in connection with the performance of their duties.  As a result, we may have difficulty attracting and
retaining qualified board members and executive officers, which could harm our business.  If our efforts to comply with new or changed
laws, regulations and standards differ from the activities intended by regulatory or governing bodies, we could be subject to liability under
applicable laws or our reputation may be harmed. </P>

<B><I><P>We do not intend to pay cash dividends.  Any return on investment may be limited to the value of our common stock, if any.
</P>
</B></I>
<P>We have never declared or paid cash dividends on our capital stock (other than certain dividends that may have been paid by CKST in
or before 2005).  We currently expect to use available funds and any future earnings to develop, operate and expand our business and do
not anticipate paying any cash dividends in the foreseeable future.  In addition, the terms of any future debt or credit facility we may obtain
may preclude us from paying any dividends.  As a result, capital appreciation, if any, of our common stock will be an investor's only source
of potential gain from our common stock for the foreseeable future. </P>

<B><I><P>Stockholders may experience significant dilution if future equity offerings are used to fund operations or acquire complementary
businesses. </P>
</B></I>
<P>If future operations or acquisitions are financed through issuing equity securities, stockholders could experience significant dilution.  In
addition, securities issued in connection with future financing activities or potential acquisitions may have rights and preferences senior to
the rights and preferences of our common stock.  We expect to issue additional equity securities pursuant to employee benefit plans.  The
issuance of shares of our common stock upon the exercise of options may result in dilution to our stockholders. </P>

<B><I><P>Our Certificate of Incorporation grants our Board of Directors the power to designate and issue additional shares of common
and/or preferred stock. </P>
</B></I>
<P>Our authorized capital consists of 750,000,000 shares of common stock and 50,000,000 shares of preferred stock.  Our preferred
stock may be designated into series pursuant to authority granted by our Certificate of Incorporation, and on approval from our Board of
Directors.  The Board of Directors, without any action by our stockholders, may designate and issue shares in classes or series as the
Board of Directors deems appropriate and establish the rights, preferences and privileges of those shares, including dividends, liquidation
and voting rights.  The rights of holders of other classes or series of stock that may be issued could be superior to the rights of holders of
our common shares.  The designation and issuance of shares of capital stock having preferential rights could adversely affect other rights
appurtenant to shares of our common stock.  Furthermore, any issuances of additional stock (common or preferred) will dilute the
percentage of ownership interest of then-current holders of our capital stock and may dilute our book value per share. </P>

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<B><P ALIGN="CENTER"><A NAME="#_Toc248297511"></A>FORWARD-LOOKING STATEMENTS</A></P>
</B>
<P>Some of the statements in this prospectus are "forward-looking statements," as that term is defined in the Private Securities Litigation
Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "may," "will," "should," "anticipate,"
"estimate," "expect," "plan," "believe," "predict," "potential," "project," "target," "forecast," "intend," "assume," "guide," "seek" and similar
expressions. Forward-looking statements do not relate strictly to historical or current matters. Rather, forward-looking statements are
predictive in nature and may depend upon or refer to future events, activities or conditions. Although we believe that these statements are
based upon reasonable assumptions, we cannot provide any assurances regarding future results. We undertake no obligation to revise or
update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future
events or otherwise.</P>

<P>Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and
uncertainties. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in
forward-looking statements. Information regarding our risk factors appears in "Risk Factors&quot; beginning on page 3, which include, but
are not limited to, the following:</P>


<UL>
<LI>We will need to raise additional funds in the future to fund our operations and research, and these funds may not be available on
acceptable terms, if at all. </LI>
<LI>We expect to incur significant losses, either directly or indirectly through the companies in which we develop our products, for at least
the next several years, and we cannot assure you that we will ever be profitable. </LI>
<LI>We have a limited number of products currently available for sale and there is a high risk that our research and development efforts
might not successfully generate any viable product candidates in the future. </LI>
<LI>Cost containment measures, pressure from our competitors and availability of medical reimbursement may impact our ability to sell
our products at prices necessary to expand our operations and reach profitability. </LI>
<LI>Sales of our products will depend on the availability of adequate reimbursement from third-party payors (such as governmental
programs, for example, Medicare and Medicaid, private insurance plans and managed care programs) both in terms of the sales volumes
and prices for our products. </LI>
<LI>Legislative or administrative reforms to the United States or international reimbursement systems in a manner that significantly
reduces reimbursement for procedures using our medical devices or denies coverage for those procedures could have a material adverse
effect on our business, financial condition or results of operations. </LI>
<LI>We must convince orthopedic and spine surgeons that our products are an attractive alternative to existing surgical treatments of
orthopedic and spine disorders. </LI>
<LI>Our business plan relies on certain assumptions about the market for our products, which, if incorrect, may adversely affect our
business and profitability. </LI>
<LI>We expect to face significant competition as a result of the rapid technological changes in the medical devices industry, which could
have an adverse effect on our business, financial condition or results of operations. </LI>
<LI>Hospitals, surgeons, distributors and agents may have existing relationships with other medical device companies that make it difficult
for us to establish new relationships with them. As a result, we may not be able to sell and market our products effectively. </LI>
<LI>Our manufacturers may be unsuccessful in manufacturing products at the levels required to meet future market demand. </LI>
<LI>We rely on single source manufacturers, which could impair our ability to meet demand for delivering our products in a timely manner
or within our budget. </LI>
<LI>Our growth will depend on developing new products or product enhancements, requiring significant research and development, clinical
trials and regulatory approvals, all of which are expensive and time-consuming and may not result in a commercially viable product. </LI>
<LI>If we choose to grow our business by acquiring new and complementary businesses, products or technologies, we may be unable to
complete these acquisitions or successfully integrate them in a cost-effective and non-disruptive manner. </LI>
<LI>We rely on our independent sales distributors and sales representatives to market and sell our products. </LI>

</UL>

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<UL>

<LI>We are dependent on the services of Andrew A. Brooks, M.D. and Michael Kvitnitsky, and the loss of either of them could harm our
business. </LI>
<LI>Failure to attract and retain skilled personnel and cultivate key academic collaborations will delay product development programs and
business development efforts. </LI>
<LI>If we fail to properly manage our anticipated growth, our business could suffer. </LI>
<LI>If we decide to market and sell our devices and products internationally, we would be subject to various risks relating to our
international activities, which could negatively impact our business and financial results. </LI>
<LI>We are subject to substantial governmental regulation that could change and thus force us to make modifications to how we develop,
manufacture and price our products. </LI>
<LI>Federal regulatory reforms may adversely affect our ability to sell our products profitably. </LI>
<LI>We have not yet collected long-term clinical data to support the safety of our products, and our products may, therefore, prove to be
less safe and effective than initially thought. </LI>
<LI>The FDA requires us to obtain new Section 510(k) clearances or premarket approvals for modifications to our approved products.
Otherwise, we may have to cease marketing, or to recall, the modified products until clearances are obtained. </LI>
<LI>If we or our third-party manufacturers fail to comply with the FDA's Quality System Regulations, the manufacture of our products could
be interrupted and our product sales and operating results could suffer. </LI>
<LI>We are subject to various complex laws and regulations. Compliance with these laws and regulations is costly and time- consuming,
and failure to comply with them can have adverse consequences on our business. </LI>
<LI>We are an orthopedic medical device company with a limited operating history and our business may not become profitable. </LI>
<LI>Our quarterly financial results are likely to fluctuate significantly because our sales prospects are uncertain. </LI>
<LI>If we cannot adequately protect our patents and other intellectual property rights, we may lose market share to our competitors and be
unable to operate our business profitably. </LI>
<LI>Changes to intellectual property laws may negatively impact our ability to protect our intellectual property. </LI>
<LI>Patent infringement lawsuits brought against us could have a material adverse affect on our commercial success, and our ability to
develop and sell our products and to operate profitably. </LI>
<LI>The medical device industry is characterized by patent and other intellectual property litigation, and we could become subject to
litigation that could be costly, result in diverting management's time and efforts, require us to pay damages, and/or prevent us from
marketing our existing or future products. </LI>
<LI>We may be subject to damages resulting from claims that we or our employees or consultants have wrongfully used or disclosed
alleged trade secrets of their former employers. </LI>
<LI>Fluctuations in the cost and availability of insurance could adversely affect our profitability or our risk management profile. </LI>
<LI>Potential future product liability claims and other litigation, including contract litigation, may adversely affect our business, reputation
and ability to attract and retain customers. </LI>
<LI>Any claims relating to our making improper payments to physicians for consulting services, or other potential violations of regulations
governing interactions between us and healthcare providers, could be time-consuming and costly. </LI>
<LI>Our common stock may be thinly traded. </LI>
<LI>We expect that the price of our common stock will fluctuate substantially, potentially adversely affecting the ability of investors to sell
their shares. </LI>
<LI>Securities analysts may elect not to report on our common stock or may issue negative reports that adversely affect the price of our
common stock. </LI>
<LI>Anti-takeover provisions in our charter documents and Delaware law may discourage or prevent a change in control, even if an
acquisition would be beneficial to our stockholders, which could affect our stock price adversely and prevent attempts by our stockholders
to replace or remove our current management. </LI>
<LI>Because our common stock may be a "penny stock," it may be more difficult for investors to sell shares of our common stock, and the
market price of our common stock may be adversely affected. </LI>
<LI>A significant number of shares will become eligible for future sale by our stockholders and the sale of those shares could adversely
affect the stock price. </LI>

</UL>

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<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<UL>

<LI>Directors, executive officers, principal stockholders and affiliated entities own a significant percentage of our capital stock, and they
may make decisions that you do not consider to be in the best interests of our stockholders. </LI>
<LI>Our stock price could decline as a result of our failure to meet reporting and other regulatory requirements. </LI>
<LI>If we do not implement necessary improvements to our internal control over financial reporting in an efficient and timely manner, or if
we discover additional deficiencies and weaknesses in existing systems and controls, we could be subject to regulatory enforcement and
investors may lose confidence in our ability to operate in compliance with existing internal control rules and regulations, either of which
could result in a decline in our share price. </LI>
<LI>Our status as a public company may make it more difficult to attract and retain officers and directors. </LI>
<LI>Compliance with changing regulations concerning corporate governance and public disclosure may result in additional expenses.
</LI>
<LI>We do not intend to pay cash dividends. Any return on investment may be limited to the value of our common stock, if any. </LI>
<LI>Stockholders may experience significant dilution if future equity offerings are used to fund operations or acquire complementary
businesses. </LI>
<LI>Our Certificate of Incorporation grants our Board of Directors the power to designate and issue additional shares of common and/or
preferred stock.</LI></UL>


<P>Additional information concerning these risk factors can be found in &quot;Risk Factors&quot; beginning on page 3. Forward-looking
statements in this prospectus should be evaluated in light of these important factors.</P>
<B>
<P ALIGN="CENTER"><A NAME="#_Toc248297512">USE OF PROCEEDS</A></P>
</B><P>We are registering theses shares pursuant to registration rights granted to the selling stockholders.  We are not selling any
securities under this prospectus and we will not receive any proceeds from the sale by the selling stockholders of their common stock. If
and when the placement agent exercises any placement agent warrants, we will receive the amount of the exercise price unless the
warrants are exercised on a cashless basis. The Placement Agent Warrants are for the purchase of 575,613 shares of the Company's
common stock, the number that is equivalent to six percent (6%) of the number of shares of common stock sold in the transaction to
Approved Investors, at an exercise price of $0.44 per share.  If all of the Placement Agent Warrants are exercised, the Company would
receive approximately $253,270 in cash, unless any of the Placement Agent Warrants are exercised on a cashless basis.  We expect that
any proceeds which we receive from the exercise of the Placement Agent Warrants will be used for working capital and general corporate
purposes.</P>
<B><P ALIGN="CENTER"><A NAME="#_Toc248297513">DILUTION</A></P>
</B><P>The common stock to be sold by the selling stockholders is common stock that is currently issued and outstanding.  Accordingly,
there will be no dilution to our existing stockholders in connection with the offer and sale by the selling stockholders of common stock
currently issued and outstanding.</P>
<P>However, 575,613 shares of common stock underlying the placement agent warrants are also being registered pursuant to this
registration statement.  Such shares are not currently issued and outstanding.  If any of the placement agent warrants to purchase 575,613
shares of common stock are exercised, our stockholders may experience a reduction in their ownership interest in the Company, however
such reduction would not be material.</P>

<B><P ALIGN="CENTER"><A NAME="#_Toc248297514">SELLING STOCKHOLDERS</A></P>
</B><P>Except as otherwise indicated, the following table sets forth certain information with respect to the beneficial ownership of our
common stock including the names of the selling stockholders, the number of shares of common stock known by the Company to be owned beneficially by the selling
stockholders as of December 14, 2009, the number of shares of our common stock that may be offered by the selling stockholders
pursuant to this prospectus, the number of shares owned by the selling stockholders after completion of the offering and the percentage of
shares to be owned by the selling stockholders after completion of the offering.  Except for Frost Gamma Investments Trust, the Company knows of no selling stockholder that

<P ALIGN="CENTER">                                                26
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<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<P>
will own more than 1% of our outstanding common stock after the sale of shares owned by such selling stockholder. After
completion of the sale of the shares owned by Frost Gamma Investments Trust and offered by this prospectus, Frost Gamma Investments
Trust would beneficially own 31,822,339 shares of common stock, representing 13.82% of our outstanding common stock, assuming no
warrants are exercised by the placement agent, and 13.78% of the common stock, assuming all of the warrants held by the placement
agent are exercised.  The table has been prepared based upon a review of
Exchange Act filings related to the Company and additional
information furnished to us by or on behalf of the selling stockholders.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="90%" BORDER="0">
<TR><TD WIDTH="38%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P ALIGN="CENTER">Name of Selling Stockholder</B>
<HR NOSHADE SIZE=2 WIDTH="98%" ALIGN="LEFT">
</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P ALIGN="CENTER">Shares of<BR>Stock Owned<BR>Prior to<BR>Offering</B>
<HR NOSHADE SIZE=2 WIDTH="98%">
</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P ALIGN="CENTER">Shares of<BR>Stock to be<BR>Offered for<BR>the Selling<BR>Stockholder's<BR>Account</B>
<HR NOSHADE SIZE=2 WIDTH="98%">
</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P ALIGN="CENTER">Shares of<BR>Stock to be<BR>Owned by<BR>the Selling<BR>Stockholder<BR>After<BR>Completion<BR>of the<BR>Offering</B>
<HR NOSHADE SIZE=2 WIDTH="98%">
</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P ALIGN="CENTER">Percent of<BR>the Common<BR>Stock to be<BR>Owned by the<BR>Selling<BR>Stockholder<BR>After<BR>Completion<BR>of the<BR>Offering</B>
<HR NOSHADE SIZE=2 WIDTH="98%">
</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Alan Mandel</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">95,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">95,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Alan Mandel </FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Andrew Moon</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Barry Fine</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Bassan Investments LLC</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Benjamin Kaminash</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Bruce Pollack</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2,073,043</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2,001,615<SUP>(1)</SUP></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">*</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Canyon State Masonry Inc</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Chanel Gold Enterprise</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Charles David Stadterman</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Matthew Coffin TR UA 10/07/08 Coffin Family Trust</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">1,428,571</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">1,428,571</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Cyrus Hadidi</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">750,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">750,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">David C Blatte</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2,073,043</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2,001,615<SUP>(1)</SUP></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">*</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">David Mittler</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">57,142</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">57,142</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">David H Shepard TR UA 01/02/02 David Haspel Shepard Rev Liv Trust</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">David Thalheim</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Dominguez Investments</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Donald S Shepard</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Joseph S. Levy TR UA 06/17/98 Dr Joseph S Levy Rev Liv Trust</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Ed Baroody</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">57,142</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">57,142</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Edward C Gomez</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Frost Gamma Investments Trust</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">33,250,911</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">1,428,572</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">31,822,339</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">13.82%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">George &amp; Son Partners 2008-1 LLP</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">94,285</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">94,285</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Gilbert Hooper &amp; Danielle Hooper JT TEN</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Glenn Marshak</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Gregory Schroeder &amp; Silvia Schroeder TR UA 05/10/05 Gregory &amp; Silvia Schroeder
Fam Trust</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">85,714</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">85,714</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Hank Yunes &amp; Marci Yunes JT TEN</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Hugo Reiter &amp; Arlene Reiter JT TEN</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">300,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">300,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Ingrid K Pelerin TR UA 09/13/96 Ingrid K Pelerin Rev Liv Trust</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Ira Levy</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">J &amp; C Johnstone Family Limited Partnership</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
</TABLE>


<P ALIGN="CENTER">                                                27
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="90%" BORDER="0">
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Jack Parks</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">57,142</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">57,142</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Jacqueline Simkin TTEE Amended &amp; Restated DTD 12/16/03 Jacqueline Simkin
Trust</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2,545,510</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2,259,796</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">*</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">James J Bischoff &amp; Lucinda G Bischoff TR UA 02/02/87 James &amp; Lucinda Bischoff Fam
Liv Trust</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Jason Hirzel &amp; Kelly Hirzel JT TEN</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Jay R Flackoff</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">30,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">30,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Jay G Goldman</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Irv Goldman TR UA 04/24/95 Jay Goldman &amp; Stephanie Goldman Irrev Trust</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Jiansheng Zhao</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Jim Miller</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Joe Hadden</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">John Ritchie &amp; Christine Ritchie JT TEN</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">John Radtke</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Jorge Wolf</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">300,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">300,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Josh Berman</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Joshua Mandel</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Lester Pollack</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2,073,043</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2,001,615<SUP>(1)</SUP></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">*</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Lonnie Ogulnick &amp; Dara Ogulnick JT TEN</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">57,142</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">57,142</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Louis Olivia and Stacy Olivia JT TEN</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Michael Sinel</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Mike Miller</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Next View Capital LP</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">857,143</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">857,143</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Paul Musschoot</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Phillip George &amp; Daughter Partners 2008-1 LLP</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">94,285</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">94,285</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Phillip T George</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">458,707</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">97,142</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">361,565</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">*</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Portal Ventures LLC</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2,000,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2,000,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Richard Paz &amp; Dalit Paz JT TEN</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">57,142</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">57,142</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Richard J Rosenstock</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Richard Paul Yurich  TR UA 06/11/08 The Richard Paul Yurich Rev Liv Trust</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Rick Miner</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Robert Margolis &amp; Elizabeth Margolis JT TEN</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Robert Bergmann</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2,073,043</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2,001,615<SUP>(1)</SUP></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">*</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Robert H Hartley</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">142,857</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Robert Halm</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">57,142</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">57,142</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Robert Sudack</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">40,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">40,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Scoggin Capital Management LP II</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">1,428,571</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">1,428,571</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Scoggin International Fund Ltd</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">1,428,571</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">1,428,571</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Shari Notowitz</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Tevis Margolis</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">71,428</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">VED Software Services</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">28,571</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">28,571</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Virginia Myers &amp; Ernie Myers JT TEN</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">285,714</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Wendy F Lumish</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">W R Everett &amp; Kathleen Everett JT TEN</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">100,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Yukiyo Matsumura &amp; Machi Liu JT TEN</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">200,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">200,000</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Ladenburg Thalmann &amp; Co. Inc.</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">575,613</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">575,613</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.00%</FONT></TD>
</TR>
</TABLE>

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<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<P> * &nbsp; Less than 1%. <BR>
(1) &nbsp; The stockholder is a member of CP Cardio LLC which owns 2,001,615 shares of the Company.</P>


<P>__________ </P>

<P>None of the selling stockholders has, or within the past three years has had, any position, office or material relationship with us or any
of our predecessors or affiliates except as follows:</P>

<P>In consideration for investment banking services rendered to us by Ladenburg Thalmann &amp; Co. Inc. (&quot;Ladenburg&quot;), as
placement agent for the private placement offering, we issued to Ladenburg warrants to purchase 575,613 shares of the Company's
common stock, a number of shares that is equivalent to six percent (6%) of the number of shares of common stock sold in the private
placement to Approved Investors, at an exercise price of $0.44 per share. The services rendered by Ladenburg included serving as
financial advisor to&nbsp;the Company in connection with raising equity and equity related capital for the Company.  The warrants have an
exercise price of $0.44 per share and a term of five years.  </P>
<P>Frost Gamma Investments Trust is a 10% owner of the Company.  Frost Gamma Investments Trust owned 33,250,911 shares of
common stock of the Company prior to the offering.  The Company sold  1,428,572 shares of common stock of the Company for the
account of Frost Gamma Investments Trust.  Frost Gamma Investments Trust owns 31,822,339 shares of common stock or 13.78%
percent of the Company after completion of the offering.</P>

<P>Lonnie Ogulnick owns stock in the Company as Lonnie Ogulnick &amp; Dara Ogulnick JT TEN.  Lonnie Ogulnick is a registered financial
advisor with Ladenburg and Managing Director of Ladenburg Thalmann Private Client Services.</P>
<P>Richard Rosenstock owns stock in the Company as Richard J Rosenstock.  Richard Rosenstock is a registered broker with Ladenburg
and a director of Ladenburg Thalmann Financial Services.</P>

<B><P ALIGN="CENTER"><A NAME="#_Toc248297515">PLAN OF DISTRIBUTION</A></P>
</B><P>We are registering the shares of common stock to permit the resale of these shares of common stock by the holders of the
common stock from time to time after the date of this prospectus.  However, we will receive gross proceeds of up to approximately
$253,270 from the issuance of shares of common stock being registered pursuant to the registration statement of which this prospectus
forms a part in connection with the exercise of the placement agent warrants, if and when they are exercised, unless such warrants are
exercised on a cashless basis.  We will not receive any of the proceeds from the sale by the selling stockholders of the shares of common
stock.  We will bear all fees and expenses incident to our obligation to register the shares of common stock.</P>
<P>The selling stockholders may sell all or a portion of the shares of common stock beneficially owned by them and offered hereby from
time to time directly or through one or more underwriters, broker-dealers or agents.  If the shares of common stock are sold through
underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent's
commissions.  The shares of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time
of the sale, at varying prices determined at the time of sale, or at negotiated prices.  These sales may be effected in transactions, which
may involve crosses or block transactions, </P>

<UL>


<P><LI>on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;</LI>
<P><LI>in the over-the-counter market;</LI>
<P><LI>in transactions otherwise than on these exchanges or systems or in the over-the-counter market;</LI>
<P><LI>through the writing of options, whether such options are listed on an options exchange or otherwise;</LI>
<P><LI>ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;</LI>

</UL>

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<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<UL>

<P><LI>block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;</LI>
<P><LI>purchases by a broker-dealer as principal and resale by the broker-dealer for its account;</LI>
<P><LI>an exchange distribution in accordance with the rules of the applicable exchange;</LI>
<P><LI>privately negotiated transactions;</LI>
<P><LI>sales pursuant to Rule 144;</LI>
<P><LI>broker-dealers may agree with the selling securityholders to sell a specified number of such shares at a stipulated price per
share;</LI>
<P><LI>a combination of any such methods of sale; and</LI>
<P><LI>any other method permitted pursuant to applicable law.</LI>
</UL>

<P>If the selling stockholders effect such transactions by selling shares of common stock to or through underwriters, broker-dealers or
agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from
the selling stockholders or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they
may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in
excess of those customary in the types of transactions involved).  In connection with sales of the shares of common stock or otherwise, the
selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of
common stock in the course of hedging in positions they assume.  The selling stockholders may also sell shares of common stock short
and deliver shares of common stock covered by this prospectus to close out short positions and to return borrowed shares in connection
with such short sales.  The selling stockholders may also loan or pledge shares of common stock to broker-dealers that in turn may sell
such shares.</P>
<P>The selling stockholders may pledge or grant a security interest in some or all of the shares of common stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common
stock from time to time pursuant to this prospectus or any amendment to this prospectus under applicable provisions of the Securities Act
of 1933, as amended, amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus.  The selling stockholders also may transfer and donate the shares of common stock
in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.</P>
<P>The selling stockholders and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be
&quot;underwriters&quot; within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to,
any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act.  At the time a particular
offering of the shares of common stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate
amount of shares of common stock being offered and the terms of the offering, including the name or names of any broker-dealers or
agents, any discounts, commissions and other terms constituting compensation from the selling stockholders and any discounts,
commissions or concessions allowed or reallowed or paid to broker-dealers.</P>
<P>Under the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed
brokers or dealers.  In addition, in some states the shares of common stock may not be sold unless such shares have been registered or
qualified for sale in such state or an exemption from registration or qualification is available and is complied with.</P>

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<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<P>There can be no assurance that any selling stockholder will sell any or all of the shares of common stock registered pursuant to this
registration statement, of which this prospectus forms a part.</P>
<P>The selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange
Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholders and any other
participating person.  Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to
engage in market-making activities with respect to the shares of common stock.  All of the foregoing may affect the marketability of the
shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common
stock.</P>
<P>We will pay all expenses of the registration of the shares of common stock pursuant to the registration rights agreement, estimated to
be $70,624 in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state
securities or &quot;blue sky&quot; laws; provided, however, that a selling stockholder will pay all underwriting discounts and selling
commissions, if any.  We will indemnify the selling stockholders against liabilities, including some liabilities under the Securities Act, in
accordance with the registration rights agreements, or the selling stockholders will be entitled to contribution.  We may be indemnified by
the selling stockholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information
furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the related registration rights
agreement, or we may be entitled to contribution.</P>
<P>Once sold under this registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable
in the hands of persons other than our affiliates.</P>
<P>The Company appointed Ladenburg as the Company's exclusive placement agent for the private placement offering.  There is a
common principal stockholder of both the Company and of Ladenburg.  Furthermore, certain senior managers of the placement agent are
stockholders of the Company.  After reviewing all information related to the transaction between the Company and Ladenburg, a potential
related party transaction, the Company's Audit Committee approved the related party transaction.  Ladenburg, as the placement agent, for
acting in such capacity for the shares of common stock offered in the private placement offering, received: (i) a cash commission equal to
eight percent (8%) of the gross proceeds from the offering that was received from Approved Investors; (ii) a cash non-accountable expense
allowance equal to one percent (1%) of the gross proceeds of the offering to Approved Investors; (iii) reimbursement of Ladenburg's
out-of-pocket expenses related to the offering, including its legal fees and expenses up to $40,000; and (iv) the issuance to Ladenburg of
warrants to purchase 575,613 shares of common stock equal to six percent (6%) of the number of shares sold in the offering to Approved
Investors, at an exercise price of $0.44 per share.  </P>

<B><P ALIGN="CENTER"><A NAME="#_Toc248297516">DESCRIPTION OF SECURITIES TO BE REGISTERED</A></P>
</B><P>Our authorized capital stock consists of 750,000,000 shares of common stock, with a par value of $0.001 per share and
50,000,000 shares of preferred stock.</P>
<U><P>Common Stock</P>
</U><P>As of December 14, 2009, there were 230,293,141 shares of our common stock issued and outstanding, held by 261 stockholders
of record.  Holders of common stock are entitled to (i) one vote for each share at all meetings of stockholders, (ii) receive, subject to the
prior rights of holders, if any, of outstanding stock having prior rights as to dividends, dividends as may be declared by the Board of
Director, and (iii) subject to the prior rights of holders, if any, of outstanding stock having prior rights as to asset distributions, our remaining
assets upon liquidation, dissolution or winding up of our company. The holders of common stock have no preemptive or other subscription
or conversion rights. There are no redemption or sinking fund provisions applicable to the common stock. All shares of common stock now
outstanding are fully paid and nonassessable. </P>

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<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<P>In conjunction with first tranche and the second tranche of the private placement that closed on October 27, 2009 and November 13,
2009 respectively, Cardo Medical, Inc. issued to the placement agent warrants to purchase 575,613 shares of the Company's common
stock, at an exercise price of $0.44 per share.  The Placement Agent Warrants expire on November 13, 2014.  The shares of the
Company's common stock underlying the Placement Agent Warrants are being registered under the registration statement of which this
prospectus constitutes a part.</P>
<U><P>Preferred Stock</P>
</U><P>As of December 14, 2009, there were no shares of our preferred stock currently issued and outstanding.</P>
<P>Our Certificate of Incorporation and Bylaws contain provisions that could delay or prevent a change in control of our Company or
changes in our Board of Directors that our stockholders might consider favorable.  Some of these provisions:</P>

<UL>
<LI>impose limitations on our stockholders to call special stockholder meetings; and</LI>
<LI>authorize the issuance of preferred stock which can be created and issued by the Board of Directors without prior stockholder
approval, with rights senior to those of the common stock. </LI></UL>


<P>In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit certain
business combinations with stockholders owning 15% or more of our outstanding voting stock.  These and other provisions in our
Certificate of Incorporation, our Bylaws and Delaware law could make it more difficult for stockholders or potential acquirers to obtain
control of our Board of Directors or initiate actions that are opposed by our then-current Board of Directors, including to delay or impede a
merger, tender offer or proxy contest involving our Company.  Any delay or prevention of a change in control transaction or changes in our
Board of Directors could cause the market price of our common stock to decline. </P>
<P>Our common stock is quoted on the OTC Bulletin Board under the trading symbol &quot;CDOM.OB&quot;.</P>
<B><P ALIGN="CENTER"><A NAME="#_Toc248297517">INTERESTS OF NAMED EXPERTS AND COUNSEL</A></P>
</B><P>None</P>

<B><P ALIGN="CENTER"><A NAME="#_Toc248297518">INFORMATION WITH RESPECT TO THE REGISTRANT</A></P>
<P>Description of Business</P>
</B><P>The following business description should be read in conjunction with the consolidated financial statements and notes thereto
appearing elsewhere in this registration statement. </P>

<B><P>Organization</P></B>

<B><I><P>Overview</P>
</B></I><P>Cardo Medical, Inc. ("Cardo" or the "Company") is an orthopedic medical device company specializing in designing,
developing and marketing high performance reconstructive joint devices and spinal surgical devices. Reconstructive joint devices are used
to replace knee, hip and other joints that have deteriorated through disease or injury. Spinal surgical devices involve products to stabilize
the spine for fusion and reconstructive procedures. Within these areas, Cardo intends to focus on the higher-growth sectors of the
orthopedic industry, such as advanced minimally invasive instrumentation and bone-conserving high-performance implants. Cardo is
focused on developing surgical devices that will enable surgeons to bridge the gap between soft tissue-driven sports medicine techniques
and classical reconstructive surgical procedures. Cardo commercializes its reconstructive joint devices through its Cardo Orthopedics
division and its spine devices through its Cardo Spine division.</P>

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<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<P>In December 2006, Cardo initiated sales of the Align 360 unicompartmental knee device, a partial knee resurfacing device for the
medial or lateral part of the knee. Cardo has received approval under Section 510(k) of the Federal Food, Drug and Cosmetic Act ("Section
510(k)") for its uniquely instrumented patello-femoral arthroplasty, a resurfacing device for the back of the kneecap and distal femur. Cardo
has also received FDA 510k approval for its Total Knee System which has both a posterior cruciate sacrificing as well as a posterior
cruciate sparing component design. Cardo has also received FDA 510k approval for its total hip replacement system along with its
monopolar and bipolar hip systems. Cardo received Section 510(k) approvals for its spinal lumbar fusion system and its cervical plate and
screw systems. Cardo is actively engaged in a number of highly innovative research and development projects for total knee arthroplasty,
spinal motion preservation, fusion devices and minimally invasive approaches for treating an array of joint and spinal disorders.</P>
<P>As of December 14, 2009, Cardo employed 20 full-time employees.</P>
<B><I><P>Code of Business Conduct and Ethics</P>
</B></I>
<P>We have adopted a Code of Business Conduct and Ethics which is applicable to all of our employees, officers and directors (including
our principal executive officer, principal financial officer and principal accounting officer). A copy of the Code of Business Conduct and
Ethics is available on the Company's website at www.cardomedical.com.</P>
<B><I><P>Recent Transactions</P>
</B></I>
<P>Cardo Medical, LLC (&quot;Cardo LLC&quot;) was formed on April 6, 2007 as a California limited liability company for the purpose of
acquiring an interest in the medical device business conducted by Accin Corporation directly and through Accin's interests in Cervical
Xpand, LLC and Uni-Knee, LLC. Following Cardo LLC's organization:</P>

<UL>
<I><LI>Cardo LLC and Accin formed a Delaware limited liability company on April 20, 2007 under the name Accelerated Innovation, LLC;
</LI>
<LI>On May 21, 2007, Accin contributed substantially all of its business, properties and assets, including its majority interests in Cervical
Xpand and Uni-Knee, to Accelerated Innovation in exchange for a 62.5% interest in Accelerated Innovation and the distribution referenced
below in the amount of $3.75 million; </LI>
<LI>Concurrently with the above, on May 21, 2007, Cardo LLC contributed $3.75 million to Accelerated Innovation in exchange for a
37.5% interest in Accelerated Innovation; and </LI>
<LI>The amount of $3.75 million was distributed by Accelerated Innovation to Accin.</I></LI></UL>

<P>Under the terms of Accelerated Innovation's Limited Liability Company Agreement, Cardo LLC was granted an option to purchase
the 62.5% interest in Accelerated Innovation held by Accin for a purchase price of $6.25 million. Following the exercise of that option in
June 2008, Cardo LLC acquired all of the interests in Accelerated Innovation held by Accin, and Accelerated Innovation became a
wholly-owned subsidiary of Cardo LLC.</P>

<P>Prior to that, in February 2008, Cardo LLC entered into Membership Interest Purchase Agreements with the holders of the minority
membership interests in Cervical Xpand and Uni-Knee. Cervical Xpand and Uni-Knee were formed as New Jersey limited liability
companies on July 12, 2005 and May 10, 2006, respectively, for the purpose of conducting research and development activities. Prior to
the closing of the transactions contemplated by the Membership Interest Purchase Agreements, Accelerated Innovation, as the assignee of
Accin's assets, owned 52.083% of the membership interests in Cervical Xpand and 51.21% of the membership interests in Uni-Knee, and
the minority holders held the remaining outstanding interests. Upon the closing of the transactions contemplated by the Membership
Interest Purchase Agreements, in June 2008, Cardo LLC acquired the outstanding membership interests from the minority holders for an
aggregate purchase price of $1,437,510 for the Cervical Xpand interests and $2,049,180 for the Uni-Knee interests. As a result, Cardo LLC
owned all of the interests in Cervical Xpand and Uni-Knee directly and indirectly through its ownership of Accelerated Innovation.</P>

<P ALIGN="CENTER">                                                33
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<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>


<P>On June 18, 2008, Cardo LLC entered into a Merger Agreement and Plan of Reorganization with clickNsettle.com, Inc. ("CKST") and
Cardo Acquisition, LLC, a California limited liability company and wholly-owned subsidiary of CKST. Upon the consummation of the
transactions contemplated by the Merger Agreement, CKST acquired Cardo LLC through a merger of Cardo LLC with Cardo Acquisition,
with Cardo LLC continuing as the surviving entity in the Merger and a wholly-owned subsidiary of CKST. Pursuant to the Merger
Agreement, all of the issued and outstanding units of Cardo LLC's membership interests were converted into the right to receive shares of
the common stock of CKST.</P>
<P>On or about the signing of the Merger Agreement, Frost Gamma Investments Trust and other investors invested $12.975 million in
Cardo LLC in exchange for units of Cardo LLC's membership interests. Dr. Phillip Frost, Chairman and Chief Executive Officer of Opko
Health, Inc., is the trustee and beneficiary of Frost Gamma Investments Trust. Cardo LLC used approximately $9.7 million of the proceeds
from these investments to close on the acquisition of the outstanding equity interests of three partially owned subsidiaries of Cardo LLC
(Accelerated Innovation, LLC, Cervical Xpand, LLC and Uni-Knee, LLC), to repay an existing member loan (in the amount of $1.2 million)
and for transaction expenses, and used the remaining funds to accelerate its research and product development.</P>
<P>Under the terms of the Merger Agreement, at the closing of the Merger, each Cardo LLC unit of membership interest issued and
outstanding was converted into and exchanged for the right to receive 667,204.70995 shares of common stock of CKST. As a result of the
Merger, CKST's stockholders and optionholders owned approximately 5.5% of the combined company on a fully diluted basis (or
11,298,979 shares of common stock outstanding and underlying options), the members of Cardo LLC, excluding the new investors, owned
approximately 64.8% of the combined company on a fully diluted basis (or 133,440,942 shares of common stock), the new investors
owned approximately 28.5% of the combined company on a fully diluted basis (or 58,641,701 shares of common stock), and optionholders
of Cardo LLC owned approximately 1.2% of the combined company on a fully diluted basis (or 2,398,400 shares of common stock
underlying those options).</P>
<P>Following the closing of the Merger, each of Cervical Xpand, Uni-Knee and Accelerated Innovation merged with and into Cardo
Medical, LLC, which is now the sole subsidiary of the Company and Cardo LLC converted into a Delaware limited liability company.</P>
<P>On June 30, 2009, Cardo completed the first tranche of a private placement with investors to purchase 8,689,319 shares of Cardo's
common stock, par value $0.001 per share, at a price of $0.35 per share for gross proceeds of $3,041,260.  The common shares sold
under this private placement have a 24-month lock up provision.  The second tranche of this private placement closed on September 21,
2009 with the purchase of 485,714 shares of Cardo's common stock for gross proceeds of $170,000.</P>
<P>On October 27, 2009 and November 13, 2009, Cardo completed another private placement with investors to purchase an aggregate of
17,757,837 shares of Cardo's common stock, par value $0.001 per share, at a price of $0.35 per share for gross proceeds of
$6,215,250.</P>
<P>Proceeds from these two private placements allowed us sufficient working capital to build inventory and instrumentation in order to
meet anticipated levels needed to expand our sales and to acquire substantially all of the assets of Vertebron, Inc.
(&quot;Vertebron&quot;).</P>
<P>Vertebron, a spinal implant device company located in Stratford, CT, designs, develops, manufactures and sells spinal implant
products focused on fusion technology for the lumbar and cervical spine as well as motion preservation technologies.  Cardo purchased all
of Vertebron's inventory and fixed assets and will retain 100% ownership of all Vertebron's implant technologies for spinal surgery.  We
also acquired all intellectual property rights owned by Vertebron which includes 20 U.S. issued patents and patent applications.  Through a
previous licensing agreement, Cardo currently markets and distributes the PSS Pedicle Screw and SCP Cervical Plate systems.  The
Vertebron transaction will allow for Cardo to expand its existing domestic distribution.  On April 21, 2009, Vertebron filed for Chapter 11
bankruptcy protection in the District of Connecticut.  The acquisition is the result of a Chapter 11 auction process, approved by the United
States Bankruptcy Court for the District of Connecticut.</P>

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<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<P>We are headquartered in Beverly Hills, California. In connection with the consummation of the Merger, CKST approved through its
stockholders an amendment to its Amended and Restated Certificate of Incorporation to change its name from "clickNsettle.com, Inc." to
"Cardo Medical, Inc." CKST's trading symbol was "CKST.OB," which has changed to "CDOM.OB" in connection with the name change.
Cardo Medical's common stock is quoted on the National Association of Securities Dealers, Inc.'s, Over-the-Counter Bulletin Board, or the
OTC Bulletin Board. </P>
<P>At December 14, 2009, we had approximately $4,956,000 in cash; however, in October 2009 we used $1,170,000 in order to complete
the Vertebron, Inc. transaction and raised net proceeds of approximately $5,871,000 through a private placement.  With this subsequent
net cash infusion, the available funds are still not projected to meet all of our working capital needs for the next twelve months.  The fact
that we will sustain losses through the remainder of 2009 and the first two quarters of 2010, and may still require outside sources of
additional capital to supplement operations continues to create an uncertainty about our ability to continue as a going concern. </P>
<P>Management intends to use borrowings and securities sales to mitigate the effects of our use of that cash. However, we cannot assure
you that debt or equity financing, if and when required, will be available. Our ability to continue as a going concern is dependent upon
receiving additional funds either through the issuance of debt or through common and/or preferred stock and the success of management's
plan to expand sales. Although we may obtain external financing through the sales of our own securities, there can be no assurance that
such financing will be available, or if available, that any such financing would be on terms acceptable to us. If we are unable to fund our
cash flow needs, we may have to reduce or stop planned growth or scale back operations and reduce staff.</P>
<B><I><P>Nature of Business</P>
</B></I>
<P>The Company develops and distributes reconstructive orthopedic and spinal surgery products to various medical organizations. The
Company works in small, focused development teams in conjunction with physicians to rapidly develop products from conception to
launch. The Company launched and commenced sales of its first product in late 2006, which was a high-performance, uni-compartmental
knee replacement. The Company commenced sales of its reconstructive products in 2007 and spine products in 2008. </P>
<B><I><P>Products</P>
</B></I>
<P>Following is a listing of our current products: </P>
<I><P>Knee Portfolio</P>

<UL>
<LI>Align 360 Unicompartmental Knee System - A uniquely instrumented high performance partial knee replacement that allows
resurfacing of either the medial or lateral compartments of the knee. This product promotes the consistent balancing of the flexion and
extension gaps for unicompartmental knee surgery. </LI>
<LI>Align 360 Patellofemoral System - A uniquely instrumented and novel patellofemoral system that allows resurfacing of the
patellofemoral joint. This product is an anatomic system that addresses the disease of the patellofemoral joint. </LI>
<LI>Align 360 Total Knee System - A uniquely instrumented high performance total knee system consisting of posterior-stabilized and
cruciate retaining femoral components</LI></UL>

<P>Hip Portfolio</P>

<UL>
<LI>Accin Total Hip System - A taperloc type of hip system that allows replacement of the ball and socket of the hip joint. This product
offers a dual taper hip design for total hip arthroplasty complemented by the Accin Bipolar and Monopolar Hip Systems for hip fracture
applications. </LI>
<LI>Accin Bipolar Hip System - A bipolar hip that allows replacement of the ball of the hip for either fracture, tumors or reconstruction from
some other type of pathology. </LI>
<LI>Accin Monopolar Hip System - A monopolar hip that allows replacement of the ball of the hip from either fracture, tumors or
reconstruction from some other type of pathology. </LI></UL>

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<P>Spinal Product Line</P>

<UL>
<LI>Accin Lumbar Pedicle Screw/Rod System - A pedicle screw and rod system for instrumentation of lumbar spine fusion incorporating
an evolutionary locking mechanism allowing for high screw angulation. </LI>
<LI>Accin Cervical Plate/Screw System - An innovative low-profile system for cervical spine fusion incorporating an integrated, floating
tapered-ring locking mechanism to simplify surgical procedure. </LI></UL>

</I><P>Our products listed above have received Section 510(k) approval. We have a number of earlier stage research and development
projects underway, some of which have received Section 510(k) approval and others that may be submitted for regulatory approval in the
future.</P>
<B><P>Orthopedic Industry</P>
</B>
<P>According to the 2007-2008 Orthopaedic Industry Annual Report published by Knowledge Enterprises, Inc., which we refer to herein as
the Industry Annual Report, the worldwide market for orthopedic products in 2007 was estimated to be $32.5 billion, representing an 11.8%
increase from the previous year. According to this report, bone and joint diseases account for half of all the chronic conditions in people
over 50 years of age. With the predicted doubling of the aged population by the year 2020, the report suggests that demographics alone
will drive growth in the global orthopedic industry. We also believe that the orthopedic industry will continue to grow due to an increasingly
older population and extended life spans in the United States and other developed countries worldwide. </P>
<P>According to the Industry Annual Report, the world's six largest replacement companies-Zimmer, Johnson &amp; Johnson, Stryker,
Smith &amp; Nephew, Biomet and Wright Medical-generated 89% of joint product sales in 2007. We believe that the size of these
companies often leads them to concentrate their marketing and research and development efforts on products that they believe will have a
relatively high minimum threshold level of sales. As a result, there is an opportunity for a smaller orthopedic company, such as us, to focus
on smaller, higher-growth sectors of the orthopedic market, while still offering a comprehensive product line to address the needs of its
customers in a customized and interactive fashion.</P>
<P>Orthopedic devices are commonly divided into several primary sectors corresponding to the major subspecialties within the orthopedic
field: reconstruction, trauma, arthroscopy, spine and biologics. Management's initial focus is on innovation related to reconstructive joint
devices and spinal products, as discussed below.</P>
<B><I><P>Reconstructive Joint Device Market</P>
</B></I>
<P>Most reconstructive joint devices are used to replace or repair joints that have deteriorated as a result of disease or injury. Despite the
availability of non-surgical treatment alternatives such as oral medications, injections and joint fluid supplementation of the knee, severe
cases of disease or injury often require reconstructive joint surgery.</P>
<P>Reconstructive joint surgery involves modifying the bone area surrounding the affected joint and inserting one or more manufactured
components, and also may involve using bone cement.</P>
<P>The reconstructive joint device market is generally divided into the areas of hips, knees and extremities. According to the Industry
Annual Report, it is estimated that the worldwide reconstructive joint device market had sales of approximately $11.6&nbsp;billion in 2007,
with hip reconstruction and knee reconstruction representing the largest sectors.</P>
<I><P>Knee Reconstruction. </I>The knee joint involves the surfaces of three distinct bones: the lower end of the femur, or thigh bone, the
upper end of the tibia, or shin bone, and the patella, or kneecap. Cartilage on any of these surfaces can be damaged due to disease or
injury, leading to pain and inflammation requiring knee reconstruction. According to the Industry Annual Report, knee reconstruction was
the largest sector of the reconstructive joint device market in 2007, with estimated sales of approximately $5.9&nbsp;billion worldwide.</P>

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<P>One of the major trends in knee reconstruction includes the use of minimally invasive techniques to accomplish reconstructive goals
with less damage to surrounding soft tissues. Our unicompartmental device has been designed to be inserted through small incision
surgery with an innovative instrumentation approach. Our design approach was to develop an innovative instrumentation system to
improve and simplify surgical technique for a clinically proven implant concept. We believe that our system allows the surgeon to simply
and reproducibly balance both flexion and extension gaps. This is a general approach we plan to continue with our other products. </P>
<I><P>Hip Reconstruction.</I> The hip joint is a ball-and-socket joint that enables the large range of motion that the hip performs in daily
life. The hip joint is most commonly replaced due to degeneration of the cartilage between the head of the femur (the ball) and the
acetabulum or hollow portion of the pelvis (the socket). This degeneration causes pain, stiffness and a reduction in hip mobility. According
to the Industry Annual Report, it is estimated that the worldwide hip reconstruction market had sales of approximately $5.1&nbsp;billion in
2007.</P>
<P>Similar to the knee reconstruction market, major trends in hip replacement procedures and implants are to extend implant life and to
preserve bone stock for possible future procedures. New products have been developed that incorporate advances in bearing surfaces
from the traditional polyethylene surface. These alternative bearing surfaces include metal-on-metal, cross-linked polyethylene and
ceramic-on-ceramic combinations, which exhibit improved wear characteristics and lead to longer implant life. In addition to advances in
bearing surfaces, implants that preserve more natural bone have been developed in order to minimize surgical trauma and recovery time
for patients. These implants, known as bone- conserving implants, leave more of the hip bones intact, which may be beneficial given the
likelihood of future revision replacement procedures as the average patient's lifetime increases. Bone-conserving procedures are intended
to enable patients to delay their first total hip procedure and may significantly increase the time from the first procedure to the time when a
revision replacement implant is required. Our hip product portfolio, currently consisting of three products, is focused on improving the
surgical techniques for bone-conservative procedures. These products integrate implant designs that are based on predicate devices (i.e.,
a device with a similar design that has already received clearance) with successful long-term clinical histories. We are actively engaged in
several research and development efforts to develop better instrumentation for less traumatic surgeries, improved component designs and
bearing surfaces to increase longevity of our devices.</P>
<B><I><P>Spine Market</P>
</B></I>
<P>Back and neck pain is one of the leading causes of healthcare expenditures in the United States, with a direct cost of approximately
$86 billion annually for diagnosis, treatment and rehabilitation, according to an article published in The Journal of the American Medical
Association (published February 13, 2008). According to the Industry Annual Report, the U.S. market for lumbar and cervical spine fusion,
which is the focus of our spinal business, was estimated to be over $3 billion in 2006 and over $3.6 billion in 2007, and is estimated to grow
to more than $4.2 billion in 2008. </P>
<P>The spine consists of vertebrae, which are 29 separate bones connecting the skull to the pelvis. The vertebrae are joined together by
soft tissue structures that provide the core of the human skeleton. Within the spinal column, the spinal cord, which is the body's central
nerve pathway, is protected by the bony parts of the vertebrae. Nerves contained in the spinal column exit through the foramen openings to
the rest of the body. Vertebrae are joined to each other in pairs which are often referred to as motion segments. These motion segments
move by means of three joints: two facet joints and one spine disc. The facet joints provide stability and enable the spine to bend and twist
while the discs absorb pressures and shocks to the vertebrae.</P>
<P>The four major categories of spine disorders are degenerative conditions, deformities, trauma and tumors. The largest market, and the
focus of our spinal research and development business, is degenerative conditions of the facet joints and disc space. These conditions can
result in instability and pressure on the nerve roots as they exit the spinal column, causing back pain or radiating pain in the arms or
legs.</P>
<P>The recommended treatments for spine disorders depend on the severity and duration of the disorder. Initially, physicians will
prescribe non-operative procedures, including bed rest, bracing, medication, lifestyle modification, exercise, physical therapy, chiropractic
care and steroid injections. In most cases, non-surgical treatment options are effective; however, many patients do not respond to
non-operative treatments and require spine surgery to alleviate their symptoms.</P>

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<P>It is estimated that in excess of one million patients undergo spine surgery each year in the United States. The most common spine
surgery procedures are: discectomy, which consists of the removal of all or part of a damaged disc; laminectomy, the removal of all or part
of a lamina, or thin layer of bone, to relieve pinching of the nerve and narrowing of the spinal canal; and fusion, where two or more
adjoining vertebrae are fused together to provide stability. All three of these procedures require access to the spine through either a
traditional open approach or through smaller, less invasive methods using various types of retractors or other percutaneous
techniques.</P>
<P>We believe that the implant market for spine surgery procedures will continue to grow because of the following market dynamics:</P>
<I><P>Demographics. </I>The population cohort most likely to experience back pain is likely to grow as a result of our aging baby boomer
population. The first baby boomers turned 62 in 2008, and over the next two decades we will see a substantial increase in our aging
population. We believe that this generation of older people is less willing to compromise on reducing activity levels and is more interested
in treatments that will allow a more rapid return to activities with shorter periods of disability.</P>
<I><P>Increased Acceptance of Implants. </I>The implementation of implants for use in spine surgery has become the standard of care
over the past decade. In the last five years, there has been a substantial and significant increase in the percentage of spinal fusion
surgeries using implants. According to Millennium Research Group, an estimated 85% or more of all spinal fusion procedures involve an
implant. The current generation of modern trained spine surgeons has accepted usage of implants as the gold standard for achieving
optimal results.</P>
<P>Increased Demand for Newer Technologies. Because of the ubiquitous nature of back pain, the market is interested in newer
technologies, such as motion preservation, and novel minimally invasive techniques which would potentially allow earlier intervention in the
degenerative process of the spine for many patients.</P>
<B><P>Government Regulation</P>

<I><P>United States</P>
</B></I>
<P>Our products are regulated by the U.S. Food and Drug Administration, or the FDA,&nbsp;under the Federal Food, Drug, and Cosmetic
Act. Some of our products also are regulated by state agencies. FDA regulations and the requirements of the Federal Food, Drug, and
Cosmetic Act affect the pre-clinical and clinical testing, design, manufacture, safety, efficacy, labeling, storage, recordkeeping, advertising
and promotion of our medical device products. FDA regulations govern, among other things, the following activities that we or our partners
perform and will continue to perform:</P>

<UL>
<I><LI>product design and development; </LI>
<LI>product testing; </LI>
<LI>product manufacturing; </LI>
<LI>product labeling; </LI>
<LI>product storage; </LI>
<LI>premarket clearance or approval; </LI>
<LI>advertising and promotion;&nbsp;and </LI>
<LI>product sales and distribution.</I></LI></UL>

<P>Generally, before we can market a new medical device, marketing clearance from the FDA must be obtained through either a pre-
market notification under Section 510(k) or the approval of a pre-market approval, or PMA,&nbsp;application. The FDA typically grants a
Section 510(k) clearance if the applicant can establish that the device is substantially equivalent to a predicate device (i.e., a device with a
similar design that has already received clearance). It generally takes approximately three months from the date of a Section 510(k)
submission to obtain clearance, but it may take longer, particularly if a clinical trial is required. The FDA may find that a Section 510(k)
clearance is not appropriate or that substantial equivalence has not been shown and, as a result, will require a PMA application.</P>

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<P>PMA applications must be supported by valid scientific evidence to demonstrate the safety and effectiveness of the device, typically
including the results of human clinical trials, bench tests and laboratory and animal studies. The PMA application also must contain a
complete description of the device and its components, and a detailed description of the methods, facilities and controls used to
manufacture the device. In addition, the submission must include the proposed labeling and any training materials. The PMA application
process can be expensive and generally takes significantly longer than the Section 510(k) process. Additionally, the FDA may never
approve the PMA application. As part of the PMA application review process, the FDA generally will inspect the manufacturer's facilities to
ensure compliance with applicable quality system regulatory requirements, which include quality control testing, control documentation and
other quality assurance procedures.</P>
<P>If human clinical trials of a medical device are required and the device presents a significant risk, the sponsor of the trial must file an
investigational device exemption, or IDE,&nbsp;application prior to commencing human clinical trials. The IDE application must be
supported by data, typically including the results of animal and/or laboratory testing. If the IDE application is approved by the FDA and one
or more institutional review boards, human clinical trials may begin at a specific number of investigational sites with a specific number of
patients, as approved by the FDA. If the device presents a non-significant risk to the patient, a sponsor may begin the clinical trial after
obtaining approval for the trial by one or more institutional review boards without separate approval from the FDA. Submission of an IDE
does not give assurance that the FDA will approve the IDE and, if it is approved, we cannot assure you that the FDA will determine that the
data derived from the trials support the safety and effectiveness of the device or warrant the continuation of clinical trials. An IDE
supplement must be submitted to and approved by the FDA before a sponsor or investigator may make a change to the investigational
plan that may affect its scientific soundness, study indication or the rights, safety or welfare of human subjects. The trial also must comply
with the FDA's IDE regulations and informed consent must be obtained from each subject.</P>
<P>If the FDA believes we are not in compliance with the law, it can institute proceedings to detain or seize products, issue a market
withdrawal, enjoin future violations and seek civil and criminal penalties against us and our officers and employees. If we fail to comply with
these regulatory requirements, our business, financial condition and results of operations could be harmed.</P>
<P>Thus far, all of our approved products have been cleared by the FDA through the Section 510(k) pre-market notification process. We
have not needed to conduct any clinical trials to support some of our regulatory approvals. Regulations regarding the manufacture and sale
of our products are subject to change. We cannot predict the effect, if any, that these changes might have on our business, financial
condition and results of operations. In addition to granting approvals for our products, the FDA has the authority to randomly inspect us for
compliance with regulatory requirements that apply to our operations. These requirements include labeling regulations, manufacturing
regulations, quality system regulations, regulations governing unapproved or off-label uses and medical device regulations. Medical device
regulations require a manufacturer to report to the FDA serious adverse events or certain types of malfunctions involving its products. The
FDA inspects device and drug manufacturing facilities in the United States in order to assure compliance with applicable quality system
regulations. As discussed in the section below titled "Manufacturing and Supply," we currently outsource the manufacture of our products
to third-party vendors. </P>
<P>Further, we are subject to various federal and state laws concerning health care fraud and abuse, including false claims laws, anti-
kickback laws and physician self-referral laws. Violations of these laws can result in criminal and/or civil punishment, including fines,
imprisonment and, in the United States, exclusion from participation in government health care programs. The scope of these laws and
related regulations is expanding and their interpretation is evolving. There is very little precedent related to these laws and regulations.
Increased funding for enforcement of these laws and regulations has resulted in greater scrutiny of marketing practices in our industry and
resulted in several investigations by various government authorities. If a governmental authority were to determine that we do not comply
with these laws and regulations, then we and our officers and employees could be subject to criminal and civil sanctions, including
exclusion from participation in federal health care reimbursement programs.</P>

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<B><I><P>International</P>
</B></I>
<P>In the next few years, we plan to seek required regulatory approvals and comply with extensive regulations governing product safety,
quality, manufacturing and reimbursement processes in order to market our products in some major foreign markets, which may include
countries in Latin America, Europe or Asia. These regulations vary significantly from country to country and with respect to the nature of
the particular medical device. The time required to obtain these foreign approvals to market our products may be longer or shorter than that
required in the United States, and requirements for approval may differ from FDA requirements.</P>
<P>If we sell any of our products internationally, the products will be subject to certain foreign regulatory approvals. In order to market our
product devices in the member countries of the European Union, we will be required to comply with the European Medical Devices
Directives and obtain "CE" mark certification. CE mark certification is the European symbol of adherence to quality assurance standards
and compliance with applicable European Medical Devices Directives. Under the European Medical Devices Directives, all medical devices
including active implants must qualify for CE marking. We also would be required to comply with other foreign regulations, such as
obtaining Ministry of Health Labor and Welfare&nbsp;approval in Japan, Health Protection Branch&nbsp;approval in Canada, and
Therapeutic Goods Administration approval in Australia, if we market in those jurisdictions. </P>
<B><I><P>Research and Development</P>
</B></I>
<P>Our research and development engineering personnel have extensive experience in developing medical devices to treat joint and
spine pathologies. Our engineers work closely with surgeons to design devices that are intended to improve patient care, simplify surgical
techniques and reduce overall costs. In addition to constantly enhancing and improving our current product offerings, we are focusing our
research and development efforts in novel approaches to total knee arthroplasty, spinal motion preservation devices and products that
promote new fusion techniques and minimally invasive surgical techniques for reconstructive and spinal surgery. Our research and
development efforts are part of our overall business plan to become a market leader in providing solutions for the reconstructive joint and
spine markets. To further promote this strategy, we are focused on converting these research and development efforts into commercially
viable products that incorporate minimally invasive techniques and quick recovery to improve patient outcomes across all of our products.
Currently, our research and development staff is located in New Jersey, and we also engage the services of independent contractors in
that state. However, we are considering expansion of this staff by hiring engineers in California as well. We expect our research and
development costs to maintain the 2009 levels as we continue to expend significant resources to develop and commercialize our products
and potential products.</P>
<P>At this time, we have one formal consulting arrangement with a surgeon. However, we work with other surgeons informally to obtain
their feedback to enhance our products and to identify product candidates that we would like to develop. We plan to work closely with
product opinion leaders to develop and enhance our product portfolio. In 2008, we spent approximately $1,332,000 on research and
development and approximately $329,000 through the three quarters ended September 30, 2009.</P>
<B><I><P>Manufacturing and Supply</P>
</B></I>
<P>We do not have a manufacturing facility, and we currently do not intend to build manufacturing facilities of our own in the foreseeable
future. We utilize third-party vendors to manufacture all of our implants and instruments, including components of our products, while
internally performing product design and quality assurance. We currently use up to seven manufacturers for our devices.</P>
<P>Our outsourced manufacturing process typically involves machining semi-completed raw materials for both our metal and polyethylene
components that make up our joint replacement systems. After being machined, the parts are inspected and processed in preparation for
final polishing and finishing as needed. Prior to being packaged, our parts are inspected again to ensure that they are within approved
specifications. We also use components in our devices that we acquire from other companies. We distribute both sterile and non-sterile
implants and instruments. </P>
<P>Our outsourcing strategy is targeted at companies that meet FDA Quality Standards and our internal policies and procedures. Supplier
performance is maintained and managed through a corrective action program intended to ensure that all product requirements are met or
exceeded. We believe these manufacturing relationships minimize our capital investment, help control costs and allow us to compete with
larger volume manufacturers of spine surgery and reconstructive surgical products.</P>

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<P>We currently utilize a small number of manufacturers for our products and rely on a limited number of sources for our product
components that are manufactured by third parties. In the future, we may consider manufacturing certain products or product components
internally, if and when demand or quality requirements make it appropriate to do so.</P>
<P>Although we believe that alternative third-party manufacturers are available, we cannot assure you that we will be able to timely
replace our third-party manufacturers immediately if one or more of them can no longer provide us with their manufacturing services. In
addition, while we do not anticipate that we will encounter problems in obtaining adequate supplies of components, we cannot assure you
that we will continue to be able to obtain components under acceptable terms and in a timely manner. </P>
<B><I><P>Sales and Marketing</P>
</B></I>
<P>We mostly rely on third-party independent distributors to market and sell our products. In the future, we intend to increase the number
of our internal sales and marketing personnel and further build our own sales and marketing infrastructure to market some of our products
targeting surgeons in certain regions. We also intend to continue collaborating with third-party independent distributors, including large
regional distributors.</P>
<B><P>Patents and Proprietary Technology; Trademarks</P>

</B><I><P>Patents</P>
</I>
<P>We have applied for U.S. and foreign patents covering several of our implant components, and some of our surgical instrumentation.
As of December 14, 2009, we had 20 issued patents and 19 pending domestic and foreign patent applications covering seven devices.
</P>
<P>Patents and intellectual property will continue to be an important aspect of the orthopedic and spine industry. In this regard, we intend
to defend our intellectual property rights. We believe that our patents and products do not and will not infringe patents or violate proprietary
rights of others, although it is possible that our existing patent rights may not be valid or that infringement of existing or future patents or
proprietary rights may occur. If some of our intellectual property and agreements relating to our products are deemed invalid, that action
may have a material adverse effect on our financial condition and results of operations.</P>
<P>The medical device industry is characterized by patent and other intellectual property litigation, and we could become subject to
litigation that could be costly, result in diverting management's time and efforts, require us to pay damages and/or prevent us from
marketing our existing or future products. Patent litigation typically involves complex factual and legal questions whose outcome is
uncertain. Any claim relating to infringement of patents that is successfully asserted against us may require us to pay substantial damages.
Even if successful, litigation to enforce our intellectual property rights or to defend our patents against challenge could be expensive and
time-consuming and could divert our management's attention. Our success will depend in part on our not infringing patents issued to
others, including our competitors and potential competitors. If our products are found to infringe the patents of others, the development,
manufacture and sale of our products or potential products could be severely restricted or prohibited. Also, our competitors may
independently develop similar technologies that are not restricted by other companies' patents, including ours. Due to the importance of our
patents to our business, our market share can decline if we fail to protect our intellectual property rights.</P>
<P>A patent infringement suit brought against us or our partners may force us or our partners to halt the development, manufacture or sale
of products or potential products that are claimed to be infringing, unless that party grants us or our partners rights to use its intellectual
property. As a result, we may be required to obtain licenses to patents or proprietary rights of others in order to continue to commercialize
our products, which we may not be able to do on acceptable terms, or at all. Even if we or any partner were able to obtain rights to the third
party's intellectual property, these rights may be non-exclusive, thereby giving our competitors access to the same intellectual property.
Ultimately, we may be unable to commercialize some of our products or potential products or may have to cease some of our business
operations as a result of patent infringement claims, which could severely harm our business.</P>

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<P>As more companies enter the orthopedic and spine market, the possibility of a patent infringement claim against us grows. While we
try to ensure that our products do not infringe others' patents and proprietary rights, our products, potential products and methods may be
covered by patents held by our competitors.</P>

<I><P>Trademarks</P></I>

<P>As of December 14, 2009, we had three registered trademarks with the U.S. Patent and Trademark Office, or USPTO, for the marks
&quot;Accin,&quot; &quot;Align 360&quot; and &quot;Cardo Medical&quot;; we have an application pending for the mark &quot;A La Carte.&quot; </P>
<B><P>Competition</P>
</B>
<P>The orthopedic and spinal device industry is highly competitive and dominated by a number of large companies with substantially
greater financial and other resources than we have. Our largest competitors in the orthopedic and spinal surgical device market are DePuy
Orthopaedics, Inc. and DePuy Spine, Inc. (divisions of Johnson &amp; Johnson Company), Zimmer, Inc. (a subsidiary of Zimmer Holdings,
Inc.), Stryker Howmedica Osteonics (a subsidiary of Stryker Corporation), Smith &amp; Nephew plc, Biomet Orthopedics, Inc. (a subsidiary
of Biomet, Inc.), Medtronic Sofamor Danek, and Synthes Inc.</P>
<P>Companies in the industry compete on the basis of product features and design, innovation, service, the ability to maintain new product
flow, relationships with key orthopedic surgeons and hospitals, the strength of their distribution network and price. While price is a key
factor in the orthopedic market, other significant factors could negatively impact our results of operations and financial condition, including:
technological innovation, reimbursement rates, surgeon preference, ease of use, clinical results and service provided by us and our
representatives.</P>
<P>Our products are, and any potential products we commercialize will be, subject to intense competition. Many of our current and
potential competitors have substantially greater financial, technical and marketing resources than we do, and they may succeed in
developing products that would render our products obsolete or noncompetitive. Many of these competitors also have significantly greater
operating history and reputations than we do in our respective fields. We may not be able to compete successfully if we are unable to
develop proprietary products that reach the market in a timely manner, receive adequate reimbursement and are safer, less invasive and
less expensive than alternatives available for the same purpose. Because of the rapidly growing orthopedic market, we anticipate that
companies will dedicate significant resources to developing competing products. </P>
<P>Regarding our spinal portfolio, we also face competition from a growing number of smaller companies with more limited product
offerings and geographic reach than our larger competitors. These companies, who represent intense competition in specified markets,
include Abbott Spine, Inc. (a division of Abbott Laboratories, Inc.), Orthofix International N.V. (parent of Blackstone Medical, Inc.), Alphatec
Spine Inc. (a subsidiary of Alphatec Holdings, Inc.), Globus Medical, Inc., and Nuvasive, Inc.</P>
<B><P>Product Liability and Insurance</P>
</B>
<P>We are subject to potential product liability risks that are inherent in the design, marketing and sale of orthopedic implants and surgical
instrumentation. We have implemented strict quality control measures and currently maintain product liability insurance in amounts that we
believe are typical in the industry for companies with a comparable size to ours. Our insurance premiums are paid as a percentage of
sales. We evaluate our levels of product liability insurance annually, as well as the amount of retention carried compared to other
comparable companies in the industry. Due to the volatility of the insurance marketplace, the value of the product liability insurance
products delivered and the small number of providers of these products, there can be no guarantees as to whether we will be able to
secure coverage in the future at a reasonable cost.</P>

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<B><P>Third-Party Reimbursement</P>
</B>
<P>Sales of our products will depend on the availability of adequate reimbursement from third-party payors (such as governmental
programs, for example, Medicare and Medicaid, private insurance plans and managed care programs), both in terms of the sales volumes
and prices of our products. Healthcare providers, such as hospitals that purchase medical devices for treating their patients, generally rely
on third-party payors to reimburse all or part of the costs and fees associated with the procedures performed with these devices. These
third-party payors may deny reimbursement if they feel that a device is not the most cost-effective treatment available, or was used for an
unapproved indication. As such, surgeons are unlikely to use our products if they do not receive reimbursement adequate to cover the cost
of their involvement in the surgical procedures. We also believe that future reimbursement may be subject to increased restrictions both in
the U.S. and internationally. If we sell our products internationally, market acceptance may depend, in part, upon the availability of
reimbursement within the prevailing healthcare payment systems. Reimbursement and healthcare payment systems in international
markets vary significantly by country, and include both government sponsored healthcare and private insurance. </P>
<P>Future legislation, regulation or reimbursement policies of third-party payors may adversely affect the demand for our existing products
or our products currently under development and limit our ability to sell our products on a profitable basis.</P>
<P>Also, third-party payors are increasingly challenging the prices charged for medical products and services. Particularly in the United
States, third-party payors carefully review, and increasingly challenge, the prices charged for procedures and medical products. Also,
greater numbers of insured individuals are receiving (and will continue to receive over the next decade) their medical care through
managed care programs, which monitor and often require pre-approval of the services that a member will receive. Many managed care
programs are paying their providers on a capitated basis, which puts the providers at financial risk for the services provided to their patients
by paying them a predetermined payment per member per month.</P>
<P>Legislative or administrative reforms to the U.S. or international reimbursement systems in a manner that significantly reduces
reimbursement for procedures using our medical devices or denies coverage for those procedures could have a material adverse effect on
our business, financial condition or results of operations. We believe that the overall escalating cost of medical products and services has
led to, and will continue to lead to, increased pressures on the healthcare industry to reduce the costs of products and services. We cannot
assure you that third-party reimbursement and coverage will be available or adequate, or that future legislation, regulation, or
reimbursement policies of third-party payors will not adversely affect the demand for our products or our ability to sell these products on a
profitable basis. We also cannot assure you that our products will be considered cost-effective by third-party payors, that reimbursement
will be available or, if available, that the third-party payors' reimbursement policies will not adversely affect our ability to sell our products
profitably.</P>
<B><P>Healthcare Fraud and Abuse</P>
</B>
<P>Our relationship with surgeons, hospitals and the marketers of our products are subject to scrutiny under various state and federal
anti-kickback, self-referral, false claims and similar laws, often referred to collectively as healthcare fraud and abuse laws. The federal
anti-kickback laws prohibit unlawful inducements for the referral of business reimbursable under federally-funded health care programs, such
as remuneration provided to physicians to induce them to use certain medical devices reimbursable by Medicare or Medicaid. Healthcare
fraud and abuse laws are complex and subject to evolving interpretations, and even minor, inadvertent violations potentially can give rise to
claims that the relevant law has been violated. Certain states in which we market our products have similar anti-kickback, anti-fee splitting
and self-referral laws, imposing substantial penalties for violations. Any violations of these laws could result in a material adverse effect on
the market price of our common stock, as well as our business, financial condition and results of operations. We cannot assure you that
any of the healthcare fraud and abuse laws will not change or be interpreted in the future in a manner which restricts or adversely affects
our business activities or relationships with surgeons, hospitals and marketers of our products. In addition, possible sanctions for violating
these anti-kickback laws include monetary fines, civil and criminal penalties, exclusion from Medicare and Medicaid programs and
forfeiture of amounts collected in violation of these prohibitions. </P>

<P ALIGN="CENTER">                                                43
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<P>We must comply with a variety of other laws, such as laws prohibiting false claims for reimbursement under Medicare and Medicaid,
which also can be triggered by violations of federal anti-kickback laws; Healthcare Insurance Portability and Accountability Act of 1996,
which protects the privacy of individually identifiable healthcare information; and the Federal Trade Commission Act and similar laws
regulating advertisement and consumer protections. In certain cases, federal and state authorities pursue actions for false claims on the
basis that manufacturers and distributors are promoting unapproved or off-label uses of their products.</P>
<B><P>Management's Plan</P>

</B><P>To achieve our growth objectives, we are considering different strategies, including growth through acquisitions and raising
additional capital. As a result, we are constantly and aggressively evaluating and we will continue to evaluate other companies and
businesses for potential synergies that would add value to our existing operations.</P>
<B><P>Description of Property</P>
</B><P>As of September 30, 2009, the Company leases an office facility in Van Nuys, California (near Los Angeles) under a month-to-month
operating lease.  We also lease facilities in Beverly Hills and Clifton, New Jersey (near New York City) under operating leases that
expire in July 2010 and August 2012, respectively. </P>

<B><P>Legal Proceedings</P></B>
<P>
From time to time, we may be a party to legal proceedings incidental to our business. We do not believe that there are any proceedings
threatened or pending against us, which, if determined adversely to us, would have a material effect on our financial position or results of operations and cash flows. </P>


<B><P ALIGN="CENTER"><A NAME="#_Toc248297519">MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS</A></P>

<P>Market for Common Stock </P>
</B>
<P>The Company's common stock currently trades on the OTC Bulletin Board under the symbol "CDOM.OB" The following table sets forth
the quarterly high and low sales prices of our common stock for the fiscal years 2008 and 2007 and the first three quarters of 2009, as
quoted on the OTC Bulletin Board. This information represents prices between dealers and does not include retail mark-ups, markdowns or
commissions and may not represent actual transactions. All information related to stock price and numbers of common stock are post-split,
which reflect a reverse split with clickNsettle.com which occurred in the month of March 2008.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="75%" BORDER="0" ALIGN="CENTER">
<TR>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
High</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Low</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Fiscal Year 2007</B></FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; First Quarter</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$2.50&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$0.52&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Second Quarter</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$1.20&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$0.70&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Third Quarter</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$5.00&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$0.75&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Fourth Quarter</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$6.20&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$3.00&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Fiscal Year 2008</B></FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; First Quarter</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$3.90&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$1.60&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Second Quarter</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$2.25&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$1.05&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Third Quarter</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$2.90&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$1.10&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Fourth Quarter</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$1.90&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$1.25&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Fiscal Year 2009</B></FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; First Quarter</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$2.25&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$0.52&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Second Quarter</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$1.50&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$0.65&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Third Quarter</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$1.25&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$0.60&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Fourth Quarter (through December 17, 2009)</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$1.01&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" VALIGN="bottom" STYLE="vnd.ms-excel.numberformat:$#,##0.00_)[semicolon][Red]($#,##0.00)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$0.51&nbsp;</FONT></TD>
</TR>
</Table>


<P ALIGN="CENTER">                                                44
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<FONT SIZE=2>
<P>As of December 14, 2009, there were approximately 261 registered holders of record of the common stock.</P>
<P>We have not paid any cash dividends on our common stock and do not plan to pay any such dividends in the foreseeable future. Our
Board of Directors will determine our future dividend policy on the basis of many factors, including results of operations, capital
requirements and general business conditions.</P>

<B><P>Equity Compensation Plan Information</P> </B>

<P>The following table summarizes the number of outstanding options granted to employees, service providers and directors
under the Company's compensation plans and arrangements as of the quarter ended September 30, 2009.
For a description of equity compensation plans not approved by security holders see Note 12 to the Consolidated Financial
Statements for the year ended December 31, 2008 included elsewhere in this registration statement. </P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="85%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Number of securities</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Number of securities</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
to be issued upon</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Weighted-average</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
remaining available</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
exercise of</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
exercise price of</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
for future issuance</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
outstanding options,</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
outstanding options,</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
under equity</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
warrants and rights</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
warrants and rights</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
compensation plans</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Equity compensation plans</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;     not approved by security holders</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                          2,358,400&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
  &nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
      &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $                                   0.23&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                         -  &nbsp;
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Equity compensation plans&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;     approved by security holders</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                         -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
  &nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                         -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                         -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
Total</B></FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
 </B></FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
                          2,358,400&nbsp;</B>
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
   </B></FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
 $                                   0.23&nbsp;</B>
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
   </B></FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
                         - &nbsp;</B>
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>


<B><P ALIGN="CENTER"><A NAME="#_Toc248297520">MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION</A><BR>
AND RESULTS OF OPERATIONS</P>
</B><P>The discussion and analysis of our financial condition and results of operations are based on our financial statements, which we
have prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these
financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during
the reporting periods. On an ongoing basis, we evaluate estimates and judgments, including those described in greater detail below. We
base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different assumptions or conditions. </P>
<P>The following discussion and analysis excludes the impact of clickNsettle.com, Inc. ("CKST")'s financial condition and results of
operations prior to the Merger on August 29, 2008 because they were not material in relation to the financial information for any of the
periods presented below. </P>
<P>All amounts, other than share amounts, are stated in thousands.</P>
<I><P> </P>
</I><P>As used in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" except where the
context otherwise requires, the term "we," "us," "our" or "Cardo" refers to the business of Cardo Medical, Inc. </P>

<P ALIGN="CENTER">                                                45
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<I><P>The following discussion should be read together with the information contained in the financial statements and related notes
included elsewhere in this Registration Statement on Form S-1.</P>

</I><B><P>Overview</P>
</B>
<P>Cardo Medical, Inc. is an orthopedic medical device company specializing in designing, developing and marketing high performance
reconstructive joint devices and spinal surgical devices. Reconstructive joint devices are used to replace knee, hip and other joints that
have deteriorated through disease or injury. Spinal surgical devices involve products to stabilize the spine for fusion and reconstructive
procedures. Within these areas, Cardo intends to focus on the higher-growth sectors of the orthopedic industry, such as advanced
minimally invasive instrumentation and bone-conserving high-performance implants. Cardo is focused on developing surgical devices that
will enable surgeons to bridge the gap between soft tissue-driven sports medicine techniques and classical reconstructive surgical
procedures. Cardo commercializes its reconstructive joint devices through its Cardo Orthopedics division and its spine devices through its
Cardo Spine division. The Company launched and commenced sales of its first product in late 2006, which was a high-performance,
uni-compartmental knee replacement. The Company commenced sales of its reconstructive products in 2007 and spine products in 2008.
</P>
<P>On June 18, 2008, Cardo Medical, LLC (&quot;Cardo LLC&quot;) entered into a Merger Agreement and Plan of Reorganization with
CKST and Cardo Acquisition, LLC, a California limited liability company and wholly-owned subsidiary of CKST. Upon the consummation of
the transactions contemplated by the Merger Agreement, CKST acquired Cardo LLC through a merger of Cardo LLC with Cardo
Acquisition, with Cardo LLC continuing as the surviving entity in the Merger and a wholly-owned subsidiary of CKST. Pursuant to the
Merger Agreement, all of the issued and outstanding units of Cardo LLC's membership interests were converted into the right to receive
shares of the common stock of CKST.</P>
<P>On or about the signing of the Merger Agreement, Frost Gamma Investments Trust and other investors invested $12.975 million in
Cardo LLC in exchange for units of Cardo LLC's membership interests. Dr. Phillip Frost, Chairman and Chief Executive Officer of Opko
Health, Inc., is the trustee and beneficiary of Frost Gamma Investments Trust. Cardo LLC used approximately $9.7 million of the proceeds
from these investments to close on the acquisition of the outstanding equity interests of three partially owned subsidiaries of Cardo LLC
(Accelerated Innovation, LLC, Cervical Xpand, LLC and Uni-Knee, LLC), to repay an existing member loan (in the amount of $1.2 million)
and for transaction expenses, and used the remaining funds to accelerate its research and product development. In addition, at the closing
of the Merger, CKST had cash and cash equivalents of approximately $2.5 million held in money market accounts and certificates of
deposit as well as accrued liabilities of approximately $354 thousand.</P>
<P>We are headquartered in Beverly Hills, California. In connection with the consummation of the Merger, CKST proposed to its
stockholders an amendment to its Amended and Restated Certificate of Incorporation to change its name from "clickNsettle.com, Inc." to
"Cardo Medical, Inc." CKST's trading symbol was "CKST.OB," which has changed to "CDOM.OB" in connection with the name change.
Cardo Medical's common stock is quoted on the National Association of Securities Dealers, Inc.'s, Over-the-Counter Bulletin Board, or the
OTC Bulletin Board. </P>
<B><P>Critical Accounting Policies and Estimates</P>

</B><P>Our significant accounting policies are more fully described in the notes to our consolidated financial statements.  Those material
accounting estimates that we believe are the most critical to an investor's understanding of our financial results and condition are
discussed immediately below and are particularly important to the portrayal of our financial position and results of operations and require
the application of significant judgment by our management to determine the appropriate assumptions to be used in the determination of
certain estimates.</P>

<P ALIGN="CENTER">                                                46
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<B><P>Use of Estimates</P>
</B>
<P>Financial statements prepared in accordance with accounting principles generally accepted in the United States require management
to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Among other things, management makes estimates relating to
allowances for doubtful accounts, excess and obsolete inventory items, the estimated depreciable lives of property and equipment, the
impairment of goodwill and other intangible assets, share-based payment, deferred income tax assets and the allocation of the purchase
price paid for the minority interests in Uni, Cervical and Accelerated Innovation. Given the short operating history of Cardo, actual results
could differ from those estimates.</P>
<B><P>Revenue Recognition</P>
</B>
<P>The Company recognizes revenue when it's realizable and earned. The Company considers revenue to be realizable and earned
when the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered,
the seller's price to the buyer is fixed or determinable, and collectability is reasonably assured. Persuasive evidence of the arrangements
occurs when the Company receives a signed contract from the hospital in which the surgery will be performed. Within that contract is the
price at which the hospital will buy the device. Delivery occurs on the day of surgery when the device is implanted by the surgeon.
Collectability is reasonably assured as we have continuing relationships with the hospitals and we can pursue collections if necessary. As
the Company does not accept returns and does not have any post-sale obligations, the date of revenue recognition is generally on the day
of the surgery. </P>
<B><P>Intangible and Long-Lived Assets</P>
</B>
<P>The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book
value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future
cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount.
Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted
expected cash flows, of those assets and is recorded in the period in which the determination is made. The Company's management
currently believes there is no impairment of its long-lived assets. There can be no assurance, however, that market conditions will not
change or demand for the Company's products will continue. Either of these could result in future impairment of long-lived assets. The first
step of the Company's goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If
the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, thus the second step
of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill
impairment test shall be performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test
compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill. If the carrying amount of reporting unit
goodwill exceeds the implied fair value of that goodwill, an impairment loss shall be recognized in an amount equal to that excess. The loss
recognized cannot exceed the carrying amount of goodwill. After a goodwill impairment loss is recognized, the adjusted carrying amount of
goodwill shall be its new accounting basis. Subsequent reversal of a previously recognized goodwill impairment loss is prohibited once the
measurement of that loss is completed. The testing for impairment needs to be conducted at the reporting unit, or component level, which
is one level below the operating unit. In Cardo's case, the operating units are the Reconstructive and Spine product lines. The reporting
units are one level below that. In the case of the Reconstructive Division, the reporting units are the knee and hip products. For the Spine
Division, the reporting units are the licensed and internally developed products. </P>
<B><P>Property and Equipment</P>
</B>
<P>Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives, which
range from three to five years. This estimate is based on the useful life of the individual items. When items are retired or disposed of,
income is charged or credited for the difference between the net book value of the asset and the proceeds realized thereon. Ordinary
maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized. This estimate is unlikely
to experience any differences from what is reflected in the financial statements.</P>

<P ALIGN="CENTER">                                                47
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<B><P>Share Based Payment</P>
</B>
<P>In order to determine compensation on options issued to consultants, and employees' options, the fair value of each option granted is
estimated on the date of grant using the Black-Scholes option-pricing model. The Company estimates the requisite service period used in
the Black-Scholes calculation based on an analysis of vesting and exercisability conditions, explicit, implicit, and/or derived service periods,
and the probability of the satisfaction of any performance or service conditions. The Company also considers whether the requisite service
has been rendered when recognizing compensation costs. Because the Black-Scholes option valuation model incorporate ranges of
assumptions for inputs, those ranges are disclosed. Expected volatilities are based on the historical volatility of the components of the
small cap sector of the Dow Jones medical equipment index for a period equal to the expected life of the Cardo options. It also measures
the volatility of other public companies with similar size and industry characteristics to Cardo for the same period. These measurements
are averaged and the result is used as expected volatility. As there is no history of option lives at Cardo, the expected term of options
granted is the midpoint between the vesting periods and the contractual life of the options. The risk-free rate for periods within the
contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The forfeiture rate is based on an
analysis of the nature of the recipients' jobs and relationships to the Company.</P>
<B><P>Income Taxes</P>

</B><P>&#9;On August 29, 2008, Cardo LLC consummated a reverse takeover of CKST thereby adopting CKST as the taxpaying
entity.</P>
<P>&#9;The Company's deferred tax assets and liabilities are recognized to reflect the estimated future tax effects, calculated at currently
effective tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the
financial statements.  A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of
the deferred tax asset will not be realized.  The estimated value of the deferred tax assets are subject to significant change based on the
company's future profitability.  Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the
date of enactment.</P>
<P>&#9;In June 2008, the Financial Accounting Standards Board (&quot;FASB&quot;) sought to reduce the diversity in practice associated
with certain aspects of measurement and recognition in accounting for income taxes.  FASB prescribed a recognition threshold and
measurement requirement for the financial statement recognition of a tax position that has been taken or is expected to be taken on a tax
return and also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and
transition.  As such, the Company may only recognize or continue to recognize tax positions that meet a &quot;more likely than not&quot;
threshold.  Based on this analysis, the Company's tax position is unlikely to change. </P>
<B><P>Inventory</P>
</B>
<P>Inventory is stated at the lower of cost or net realizable value as determined by assessing the gross profit less selling costs of each
inventory item. Cost is determined on a first-in, first-out basis; and the inventory is comprised of work in process and finished goods. Work
in process consists of fabrication costs paid relating to items not physically received. Finished goods are completed knee, spine and hip
replacement products ready for resale to customers.</P>
<P>At each balance sheet date, the Company evaluates its ending inventories for excess quantities and obsolescence. This evaluation
includes an analysis of sales levels by product type. Among other factors, the Company considers current product configurations, historical
and forecasted demand, market conditions and product life cycles when determining the net realizable value of the inventory. Provisions
are made to reduce excess or obsolete inventories to their estimated net realizable values. Once established, write-downs are considered
permanent adjustments to the cost basis of the excess or obsolete inventory. The Company did not have any inventory considered by
management to be excess or obsolete as of December 31, 2008 and September 30, 2009. Based on the forecasted sales amounts, we do
not expect any changes in net realizable value in the near future. </P>

<P ALIGN="CENTER">                                                48
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<B><P>Recent Accounting Pronouncements</P>
</B>
<P>In July 2009, the FASB issued ASC 105-10 (Prior authoritative literature: SFAS No. 168, <I>The FASB Accounting Standards
Codification<SUP>TM</SUP> and the Hierarchy of Generally Accepted Accounting Principles</I>, which will become the single source of
authoritative GAAP recognized by the FASB.  ASC 105-10 does not change current U.S. GAAP, but on the effective date, the FASB
Accounting Standards Codification ("ASC")<SUP>TM</SUP> will supersede all then existing non-SEC accounting and reporting
standards.  The ASC is effective for interim and annual periods ending after September 15, 2009.  Cardo adopted ASC 105-10 during the
quarter ended September 30, 2009 and revised the referencing of GAAP accounting standards in our financial statements to reflect the
new standards.</P>
<P>In May 2009, the FASB issued ASC 855-10 (Prior authoritative literature: SFAS No. 165, Subsequent Events) which provides guidance
on management's assessment of subsequent events.  It is not expected to significantly change practice because its guidance is similar to
that in American Institute of Certified Public Accountants Professional Standards U.S. Auditing Standards Section 560, Subsequent
Events, with some modifications.  The Company adopted ASC 855-10 during the quarter ended June 30, 2009. The adoption of ASC 855-10 did
not have a material impact on our results of operations, financial position or cash flows. </P>

<P>In April 2009, FASB issued ASC 820-10 (Prior authoritative literature: FSP No. FAS 157-4, <I>Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly</I>).
It does not change the definition of fair value as previously detailed, but provides additional guidance for estimating fair value when the
volume and level of activity for the asset or liability have significantly decreased. Cardo adopted ASC 820-10 during the quarter ended
June 30, 2009. The adoption of ASC 820-10 did not have a material impact on our results of operations, financial position or cash flows.
</P>
<P>In April 2009, the FASB issued ASC 320-10 (Prior authoritative literature: FSP No. FAS 115-2 and FAS 124-2, <I>Recognition and
Presentation of Other-Than-Temporary Impairments</I>). ASC 320-10 amends the other-than-temporary impairment guidance in U.S.
GAAP for debt securities and provides additional disclosure requirements for other-than-temporary impairments for debt and equity
securities. ASC 320-10 addresses the determination as to when an investment is considered impaired, whether that impairment is other
than temporary, and the measurement of an impairment loss. Cardo adopted ASC 320-10 during the quarter ended June 30, 2009. The
adoption of ASC 320-10 did not have a material impact on our results of operations, financial position or cash flows.</P>
<P>In April 2009, the FASB issued ASC 825-10 (Prior authoritative literature: FSP No. FAS 107-1 and APB 28-1, <I>Interim Disclosures
about Fair Value of Financial Instruments</I>). FASB ASC 825-10 requires that disclosures about the fair value of a company's financial
instruments be made whenever summarized financial information for interim reporting periods is made. Cardo adopted ASC 825-10 during
the quarter ended September 30, 2009. The adoption of ASC 825-10 did not have a material impact on our results of operations, financial
position or cash flows. </P>
<P>In June 2009, the FASB issued the following new accounting standards, which remain authoritative until such time that each is
integrated into the Codification:</P>

<UL>
<LI>SFAS No. 166, <I>Accounting for Transfers of Financial Assets - an amendment of FASB Statement No. 140 </LI>
</I><LI>SFAS No. 167, <I>Amendments to FASB Interpretation No. 46(R)</I>. SFAS No. 167 amends FASB Interpretation No. ("FIN") 46,
<I>Consolidation of Variable Interest Entities (revised December 2003) - an interpretation of ARB No. 51</LI></UL>

</I>
<P>SFAS No. 166 seeks to improve the relevance and comparability of the information that a reporting entity provides in its financial
statements about transfers of financial assets; the effects of the transfer on its financial position, financial performance, and cash flows;
and a transferor's continuing involvement, if any, in transferred financial assets. SFAS No. 166 eliminates the concept of a qualifying
special-purpose entity, creates more stringent conditions for reporting a transfer of a portion of a financial asset as a sale, clarifies other
sale-accounting criteria, and changes the initial measurement of a transferor's interest in transferred financial assets. SFAS No. 166 is
effective for interim and annual reporting periods beginning after November 15, 2009. The Company has not completed its evaluation, but
does not expect the adoption of SFAS No. 166 to have a material impact on our consolidated financial statements.</P>

<P ALIGN="CENTER">                                                49
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<P>SFAS No. 167 requires an enterprise to determine whether its variable interest or interests give it a controlling financial interest in a
variable interest entity. The primary beneficiary of a variable interest entity is the enterprise that has both (1) the power to direct the
activities of a variable interest entity that most significantly impact the entity's economic performance, and (2) the obligation to absorb
losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could
potentially be significant to the variable interest entity. SFAS No. 167 also amends FIN 46(R) to require ongoing reassessments of whether
an enterprise is the primary beneficiary of a variable interest entity. SFAS No. 167 is effective for interim and annual reporting periods
beginning after November 15, 2009. The Company has not completed its evaluation, but does not expect the adoption of SFAS No. 167 to
have a material impact on our consolidated financial statements.</P>
<B><P>Results of Operations for the Three Months Ended September 30, 2009 as Compared to the Three Months Ended September 30,
2008. (Amounts in thousands)</P>
</B>
<P>The following is a comparison of the consolidated results of operations for Cardo for the three months ended September 30, 2009 and
2008:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="80%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=4 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Three Months Ended</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=4 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
September 30, </B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2009</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2008</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=4 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Variance</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
(Restated)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            436&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
            411&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
            25&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Cost of sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
              84&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              66&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
            18&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Gross profit</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            352&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            345&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              7&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Research and development expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            123&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            142&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          (19)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Selling, general and administrative expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
         1,440&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
         1,089&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          351&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Loss from operations</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (1,211)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          (886)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        (325)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Interest income (expense), net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                6&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                5&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              1&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Loss before income tax provision</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (1,205)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          (881)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        (324)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Provision for income taxes</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net loss</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (1,205)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          (881)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        (324)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Less: Net income attributable to non-controlling interest</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net loss attibutable to Cardo Medical, Inc.</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (1,205)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          (881)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        (324)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
</Table>

<B><P>Revenues</P>
</B>
<P>During the quarter ended September 30, 2009, we generated revenues of $436 compared to $411 for the same period in 2008. The
wider acceptance of our Hip and Spine products by orthopedic and back surgeons has resulted in higher sales volume in the current year.
Accordingly, sales of Hip and Spine products increased $122 in the current quarter as compared to 2008. We launched our Hip product in
the first quarter of 2009 which resulted in $78 of sales during the quarter ended September 30, 2009. Comparable sales for the same
period in 2008 were nominal. The increases in Hip and Spine sales were offset by a drop in Knee sales in 2009 compared to 2008. Our
Knee and Hip products accounted for 79% of total sales during the three months ended September 30, 2009. During the quarter ended
September 30, 2008, Knee products totaled 93% of sales.</P>
<B><P>Gross Profit</P>
</B>
<P>During the quarter ended September 30, 2009, we had cost of sales of $84 compared to $66 during the quarter ended September 30,
2008. Our gross profit percentage was 80.7% for the three months ended September 30, 2009 compared to 83.9% for the corresponding
period in 2008. This decrease is attributed to sales of Hip products in 2009, which generate lower margins than Knee products, and a slight
decrease in the profit margin from Knee products. During the quarter ended September 30, 2008, there were minimal sales of Hip products
so the profit margin was indicative of our Knee product. As Cardo moves forward, we expect that our current product costs will be
maintained and the gross profits shall remain mostly in-line with the current year percentages.</P>

<P ALIGN="CENTER">                                                50
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<B><P>Research and Development Expenses </P>
</B>
<P>During the quarter ended September 30, 2009, we had research and development costs of $123 compared to $142 for the same
period in 2008. The decrease in the current year is indicative of reduced research activity as most of our products are on the market.
Research costs associated with our Total Knee product have slowed because it is nearing its launch in mid-2010; however, research is
underway on a new Hip product so research and development expenses are likely to increase in the upcoming quarters.</P>
<B><P>Selling, General and Administrative Expenses</P>
</B>
<P>During the quarter ended September 30, 2009, we had selling general and administrative expenses of $1,440 compared to $1,089 in
the same period of 2008. During 2009, labor and labor-related expenses increased $342 compared to 2008 as we expanded our
operations in order to meet current and anticipated growth. Depreciation and amortization expense increased by $93 during the quarter
ended September 30, 2009 because of the acquisition of additional instrumentation required to support base inventory levels and expected
future sales increases, and the purchase of the non-controlling interest in Accelerated Innovation, LLC in June 2008 which resulted in
$5,328 of amortizable intangible assets. Rent, travel and office expenses were slightly higher in 2009 as we added office space and our
overall business activity was greater than it was in 2008. These cost increases were partially offset by a drop in professional fees during
2009 of $154 and commission expense which was higher in 2008 due to greater incentives to initiate sales. There were significant legal
and accounting costs associated with the purchase of the non-controlling interest in Accelerated Innovation, LLC in June 2008 and the
reverse merger transaction with clickNsettle.com, Inc. which was completed in August 2008.</P>
<B><P>Interest Income/(Expense)</P>
</B>
<P>During the quarter ended September 30, 2009, we had interest income of $6 compared to $5 during the quarter ended September 30,
2008. Interest income is earned on our excess cash balances, which were comparable in both periods.</P>
<B><P>Results of Operations for the Nine Months Ended September 30, 2009 as Compared to the Nine Months Ended September 30,
2008. (Amounts in thousands)</P></B>

<P>The following is a comparison of the consolidated results of operations for Cardo for the nine months ended September 30, 2009 and
2008:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="80%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=4 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Nine Months Ended</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=4 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
September 30, </B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2009</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2008</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=4 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Variance</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
(Restated)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
         1,314&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            932&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          382&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Cost of sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            254&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            139&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          115&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Gross profit</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
         1,060&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
            793&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          267&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Research and development expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
            329&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
         1,288&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        (959)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Selling, general and administrative expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
         4,521&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
         2,488&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       2,033&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Loss from operations</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (3,790)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (2,983)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        (807)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Interest income (expense), net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              22&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
            (37)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
            59&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Loss before income tax provision</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (3,768)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (3,020)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        (748)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Provision for income taxes</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net loss</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (3,768)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (3,020)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        (748)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Less: Net income attributable to non-controlling interest</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          (148)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          148&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net loss attibutable to Cardo Medical, Inc.</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (3,768)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (3,168)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        (600)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
</Table>


<P ALIGN="CENTER">                                                51
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<B><FONT SIZE=2><P>Revenues</P>
</B>
<P>During the nine months ended September 30, 2009, we generated revenues of $1,314 compared to $932 for the same period in 2008.
The increase of $382 was attributed to the wider acceptance of our Knee, Hip and Spine products by orthopedic and back surgeons that
resulted in higher sales volume in the current year. We launched our Hip product in the first quarter of 2009 which resulted in $278 of sales
thus far in 2009 compared to $45 in 2008. Our Knee and Hip products accounted for 89% of total sales during the nine months ended
September 30, 2009. Knee was the primary product with 90% of total sales during the nine months ended September 30, 2008.</P>
<B><P>Gross Profit</P>
</B>
<P>During the nine months ended September 30, 2009, we had cost of sales of $254 compared to $139 during 2008. Our gross profit
percentage was 80.7% for the nine months ended September 30, 2009 compared to 85.1% for the corresponding period in 2008. This
decrease was attributed to significant sales of Hip products in 2009, which generate lower margins than Knee products, and a slight
decrease in the profit margin from Knee products. During the nine months ended September 30, 2008, sales of Hip products were minimal
so the profit margin was mostly indicative of our Knee product. As Cardo moves forward, we expect that our current product costs will be
maintained and the gross profits shall remain mostly in-line with the current year percentages.</P>
<B><P>Research and Development Expenses </P>
</B>
<P>During the nine months ended September 30, 2009, we had research and development costs of $329 compared to $1,288 for the
same period in 2008. The decrease was primarily due to a one-time charge of $938 of in-process research and development acquired in
connection with the purchase of the non- controlling interest in Accelerated Innovation, LLC in June 2008. The acquired in-process
research and development related to development costs associated with our Uni Knee system. Aside from the in-process research and
development, spending on research and development was fairly consistent from 2008 to 2009. During 2008, we incurred more costs
associated with Hip products. Research costs associated with our Total Knee product have slowed because it is nearing its launch in
mid-2010; however, research is underway on a new Hip product so research and development expenses are likely to increase some in the
upcoming quarters.</P>
<B><P>Selling, General and Administrative Expenses</P>
</B>
<P>During the nine months ended September 30, 2009 our selling general and administrative expenses were $4,521 compared to $2,488
for the same period in 2008, a net increase of $2,033. During 2009, labor and labor-related expenses increased $1,626 compared to 2008
as we expanded our operations in order to meet current and anticipated growth. Depreciation and amortization expense increased by $558
during the quarter ended September 30, 2009 because of the acquisition of additional instrumentation required to support base inventory
levels and expected future sales increases, and the purchase of the non-controlling interest in Accelerated Innovation, LLC in June 2008
which resulted in $5,328 of amortizable intangible assets. Commission expense increased accordingly with the increase in sales. Rent,
travel, warehouse, insurance and office expenses were also higher during the nine months ended September 30, 2009 as we added office
space and our overall business activity was greater than it was in 2008. These cost increases were partially offset by a drop in professional
fees during 2009 of $442. There were significant legal and accounting costs associated with the purchase of the non-controlling interest in
Accelerated Innovation, LLC in June 2008 and the reverse merger transaction (the "Merger") with clickNsettle.com, Inc. which was
completed in August 2008. </P>
<B><P>Interest Income</P>
</B>
<P>During the nine months ended September 30, 2009, we had interest income of $22 for the nine months ended September 30, 2009
compared to interest expense of $37 in the corresponding period of 2008. In the first and second quarter of 2008, we had interest expense
stemming from a short-term note payable which was fully repaid in July 2008. Interest income is earned on our excess cash balances,
which were significantly higher throughout 2009 compared to 2008.</P>

<P ALIGN="CENTER">                                                52
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<B>
<P>Segment Information</P>
</B>
<P>Our businesses are currently organized into the following two reportable segments; reconstructive products (the "Reconstructive
Division") and spine products (the "Spine Division"). The Reconstructive Division segment is comprised of activity relating to Cardo's
unicompartmental knee, patella-femoral products, and reconstructive knee products. The Spine Division segment is comprised of the
spinal lumbar fusion system and cervical plate and screw systems. </P>
<P>These reportable segments are based on the nature of the products offered. Management evaluates performance and allocates
resources based on several factors, of which the primary financial measure is segment operating results. Due to the distinct nature of the
products in our Reconstructive Division, and the fact that it has a more developed market for its products, it is considered by management
as a separate segment. Our Spine Division is still in the process of developing the market and obtaining instrumentation necessary to sell
the products in greater quantities. As a result, the Spine Division is considered by management as a separate segment. The accounting
policies of the reportable segments are the same as those described in Note 1.</P>
<P>As of September 30, 2009, the Reconstructive Division includes $1,233 of goodwill and $4,515 in other intangible assets relating to the
Company's unicompartmental knee product. These amounts are expected to be deductible for income tax purposes. </P>

<P>The following table sets forth summarized financial results by reportable segment for the three and nine months ended September 30,
2009 and 2008:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="95%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Reconstructive</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Spine</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Division</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;&nbsp;&nbsp; Division &nbsp;&nbsp;&nbsp;</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;&nbsp; Corporate &nbsp;&nbsp;</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF COLSPAN=12 ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><U>
Nine Months Ended September 30, 2009 (unaudited)</U></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
           1,175&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
           139&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        1,314&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Total cost of sales and operating expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              226&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             28&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        3,972&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        4,226&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Depreciation and amortization</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              848&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               4&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             26&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
           878&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Interest income, net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                   -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             22&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             22&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net income (loss)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              101&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
           107&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (3,976)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (3,768)
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF COLSPAN=12 ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><U>
Nine Months Ended September 30, 2008 (unaudited - restated)</U></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              885&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             47&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
           932&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Total cost of sales and operating expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              125&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             14&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        3,590&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        3,729&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Depreciation and amortization</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              319&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               3&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             12&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
           334&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Interest expense, net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                   -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             37&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             37&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net income (loss)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              441&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             30&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (3,639)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (3,168)
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF COLSPAN=12 ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><U>
Three Months Ended September 30, 2009 (unaudited)</U></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              351&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             85&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
           436&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Total cost of sales and operating expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                76&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               8&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        1,250&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        1,334&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Depreciation and amortization</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              303&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               2&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               8&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
           313&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Interest income, net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                   -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               6&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               6&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net income (loss)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               (28)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             75&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (1,252)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (1,205)
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF COLSPAN=12 ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><U>
Three Months Ended September 30, 2008 (unaudited - restated)</U></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              386&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             25&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
           411&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Total cost of sales and operating expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                62&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               8&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        1,011&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        1,081&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Depreciation and amortization</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              211&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               1&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               4&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
           216&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Interest expense, net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                   -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               5&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               5&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net income (loss)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              113&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             16&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (1,010)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          (881)
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>


<P ALIGN="CENTER">                                                53
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>


<FONT SIZE=2>
<P>All of the Company's net sales were attributable to activity in the United States. There were no long-lived assets held in foreign
countries. </P>
<B><P>Liquidity and Capital Resources</P>
</B>
<P>Net cash used in operating activities was $3,630 for the nine months ended September 30, 2009 compared to $1,613 for the same
period in 2008. The primary use of cash in 2009 beyond wages and other operating costs was the build-up of inventory which has
increased $1,051 during the current year.</P>
<P>Net cash used in investing activities was $1,051 for the nine months ended September 30, 2009 compared to $1,484 for the same
period in 2008. The cash used by investment activities during the nine months ended September 30, 2009 was mostly attributed to the
purchase of equipment to accommodate our operational and corporate growth as well as additional instrumentation required in order to
support current and anticipated future sales levels. The current year also includes $130 of deposits associated with the October 2009
purchase of certain Vertebron, Inc. assets.</P>
<P>Our net cash provided by financing activities was $3,193 for the nine months ended September 30, 2009 compared to $6,775 for the
same period in 2008. During the current quarter, we completed two equity investment transactions to provide us additional working capital
needed to maintain and build certain inventory and instrumentation levels to meet expected increases in future sales and product
development. </P>
<P>At September 30, 2009, we had $1,607 in cash; however, in October 2009 we used $1,170 in order to complete the Vertebron, Inc.
transaction and raised net proceeds of $3,189 through a private placement. With this subsequent net cash infusion, the available funds are
still not projected to meet all of our working capital needs for the next twelve months. The fact that Cardo will sustain losses through the
remainder of 2009 and still requires outside sources of additional capital to supplement operations continues to create an uncertainty about
our ability to continue as a going concern.</P>
<P>Management intends to use borrowings and securities sales to mitigate the effects of our use of that cash. However, we cannot assure
you that debt or equity financing, if and when required, will be available. Our ability to continue as a going concern is dependent upon
receiving additional funds either through the issuance of debt or equity and the success of management's plan to expand sales. Although
we may obtain external financing through the sales of our own securities, there can be no assurance that such financing will be available,
or if available, that any such financing would be on terms acceptable to us. If we are unable to fund our cash flow needs, we may have to
reduce or stop planned growth or scale back operations and reduce staff.</P>

<P ALIGN="CENTER">                                                54
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>


<B><P>Results of Operations for the Year Ended December 31, 2008 as Compared to the Year Ended December 31, 2007 (including the
combined results of operations for Cardo and Accin) (Amounts in thousands)</P>
</B>
<P>The following are the consolidated results of operations for Cardo for the year ended December 31, 2008 compared to an unaudited
pro forma presentation of Cardo and Accin Corporation, the company from which Cardo acquired its medical device business, for the year
ended December 31, 2007, assuming they were combined at the beginning of the year in thousands. </P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF COLSPAN=8 ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
  &nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Cardo</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
April 6, 2007, </B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Pro Forma</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Cardo</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Inception, </B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Accin</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Combined</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Year Ended</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Through</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Five Months </B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Year Ended</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
December 31, </B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
December 31, </B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Ended </B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
December 31, </B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
2008</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
2007</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
May 31, 2007</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
2007</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
$ Change</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
% Change</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
(unaudited)</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Net sales</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                1,268&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    643&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  157&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                   800&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
           468&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:0.0%"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
58.5%</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Cost of sales</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                   197&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                      69&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                    25&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                     94&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
           103&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:0.0%"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
109.6%</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;      Gross profit</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                1,071&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    574&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  132&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                   706&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
           365&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:0.0%"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
51.7%</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Research and development expenses</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                1,332&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    215&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                    41&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                   256&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
        1,076&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:0.0%"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
420.3%</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Selling, general and administrative expenses</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                3,914&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    671&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  250&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                   921&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
        2,993&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:0.0%"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
325.0%</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Impairment charges</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                1,457&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                        -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                     -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                      -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
        1,457&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:0.0%"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
100.0%</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;      Loss from operations</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               (5,632)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  (312)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                (159)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  (471)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
      (5,161)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:0.0%"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
1095.8%</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Income (expense), net</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    (20)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                      33&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                    20&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                     53&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
           (73)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:0.0%"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
-137.7%</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Loss before non-controlling interest</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               (5,652)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  (279)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                (139)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  (418)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
      (5,234)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:0.0%"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
1252.2%</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Non-controlling interest in loss (earnings) of subsidiaries</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  (148)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                      (8)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  128&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                   120&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
         (268)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:0.0%"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
-223.3%</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Net loss</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               (5,800)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  (287)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  (11)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  (298)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
      (5,502)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:0.0%"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
1846.3%</FONT></TD>
</TR>
</Table>


<B><I><FONT SIZE=2>
</I><P>Revenues</P>
</B>
<P>Net sales for the year ended December 31, 2008 increased by $468, or 58.5%, as compared to 2007. Accin, the company from which
Cardo acquired its medical device business, launched and commenced sales of its first product in December 2006, a high performance,
unicompartmental knee replacement product. As doctors became more familiar with our new product, they began using it more often. Total
unicompartmental knee sales for 2008 amounted to $1,117, which represented an increase of $318 over 2007. In addition, during 2008, we
began sales of our patellofemoral knee, hip and spine products, which contributed to an increase in sales of approximately $151 as
compared to 2007. </P>
<B><P>Costs of Sales </P>
</B>
<P>Costs of sales for the year ended December 31, 2008 increased by $103, or 109.6%, as compared to the same period in 2007
primarily to due increased sales on the products mentioned above. Our gross profit percentage for 2008 was 84.5%, representing a
decrease from the gross profit percentage of 88.3% in 2007. This decrease in gross profit percentage was primarily a result of a variation
of sales mix during the year. During 2008, we began selling our patellofemoral knee, hip and spine products, which have lower gross
margin percentages than do our knee products (75.5% for hip sales in and 72.2% for spine sales). This decreased our overall gross profit
percentage, as virtually all sales during 2007 were knee products. </P>

<P ALIGN="CENTER">                                                55
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<B><P>Research and Development Expenses </P>
</B>
<P>Research and development expenses for the year ended December 31, 2008 increased by $1,076, or 420.3%, from the same period
in 2007. The increase was primarily due to $938 of in-process research and development expenses acquired in connection with the
purchase of the non-controlling interest in Accelerated Innovation, LLC in June 2008. In addition, we increased prototype expenses in 2008
for production of our hip replacement prototypes. There were no expenditures for these items in 2007. </P>
<B><P>Selling, General and Administrative Expenses</P>
</B>
<P>Selling, general and administrative expenses for the year ended December 31, 2008 increased by $2,993, or 325.0%, as compared to
the same period in 2007. During 2008, we incurred $978 in selling, general and administrative expenses relating primarily to legal and
accounting fees associated with the reverse merger transaction with CKST which occurred on August 29, 2008, which we did not incur in
2007. We also incurred salary and payroll related expenses of $1,185 relating to additional employees hired in 2008. In addition, we
incurred increased depreciation expense of $185 in 2008 as a result of increased capital expenditures for instrumentation and other
equipment necessary to support our growth. We also incurred increased amortization expense of $376 in 2008 as a result of intangible
assets acquired in connection with the purchase of the non-controlling interest in Accelerated Innovation, LLC in June 2008, as well as
amortization of capitalized license fees. </P>
<B><P>Impairment Expenses</P>
</B>
<P>In 2008, we recognized $1,457 in goodwill impairment for the Cervical Xpand LLC purchase. There were no impairment charges in
2007. </P>
<B><P>Interest Income (Expense)</P>
</B>
<P>Net interest expense for the year ended December 31, 2008 amounted to $20, which consisted of interest expense of $48 relating to a
note payable of $1,200 issued in February 2008 and repaid in July 2008, offset by interest income of $28. During 2007, our interest income
amounted to $53. We had no interest expense in 2007, as we had no outstanding debt. </P>
<B><P>Liquidity and Capital Resources</P>
</B>
<P>Net cash used in operating activities was $2,696 for the year ended December 31, 2008 in contrast to $581 for April 6, 2007, inception,
through December 31, 2007. The main uses of cash included expenses in connection with the reverse merger transaction, research and
development costs and salaries.</P>
<P>Net cash used by investing activities was $1,836 for the year ended December 31, 2008 in contrast to an increase of cash from
investing activities of $235 for April 6, 2007, inception, through December 31, 2007. The cash used by investment activities during the year
ended December 31, 2008 primarily was attributable to the purchase of Cervical, Uni, Accelerated Innovation and the reverse merger with
CKST, as well as purchases of instrumentation and other equipment of $515.</P>
<P>Our net cash provided by financing activities was $6,723 for the year ended December 31, 2008 in contrast to $1,250 for April 6, 2007,
inception, through December 31, 2007. The cash provided by financing activities in 2008 consisted of the proceeds from a capital
contribution in 2008, the proceeds of which were used to acquire the remaining minority interests of Cervical, Uni and Accelerated
Innovation.</P>
<P>Over the next 12 months, we intend to use our capital to accelerate our research and product development, to add sales and financing
personnel, to increase in-house vendor-related operations, to increase our inventory levels and for working capital.</P>
<P>In February 2008, Cardo borrowed $1,200 from the trustee of a member of Cardo to partially finance the acquisition of the minority
interests of Cervical Xpand and Uni-Knee for an aggregate purchase price of $3,487. This $1,200 note payable was repaid in July
2008.</P>

<P ALIGN="CENTER">                                                56
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<P>On June 19, 2008, simultaneously with the signing of the Merger Agreement, Frost Gamma Investments Trust and other investors
invested $9,500 in Cardo in exchange for units of Cardo's membership interests. Dr. Phillip Frost, Chairman and Chief Executive Officer of
Opko Health, Inc., is the trustee and beneficiary of Frost Gamma Investments Trust. Certain other investors invested an additional $3,475
in Cardo before the consummation of the Merger. Proceeds from these investments were used to close on the acquisition of the
outstanding equity interests of Accelerated Innovation, Cervical Xpand and Uni-Knee, and to enable Cardo to accelerate its research and
product development. Following the acquisitions, Cardo directly owns 100% of the equity interests of Accelerated Innovation, Cervical
Xpand and Uni-Knee, as described above. Of these investment amounts, $1,600 remains available for use by us to accelerate our
research and product development. To achieve our growth objectives, we are considering different strategies, including growth through
acquisitions. As a result, we are evaluating and we will continue to evaluate other companies and businesses for potential synergies that
would add value to our existing operations. </P>
<P>At March 27, 2009, we have $1,600 in cash which is not projected to meet all of our working capital needs for the next twelve months.
The fact that the Company sustained losses in 2008 and still requires outside sources of additional capital to sustain operations has
created an uncertainty about the Company's ability to continue as a going concern. </P>
<P>Management intends to use borrowings and securities sales to mitigate the effects of our use of that cash. However, we cannot assure
you that debt or equity financing, if and when required, will be available. Our ability to continue as a going concern is dependent upon
receiving additional funds either through the issuance of debt or through common and/or preferred stock and the success of management's
plan to expand sales. Although we may obtain external financing through the sales of our own securities, there can be no assurance that
such financing will be available, or if available, that any such financing would be on terms acceptable to us. If we are unable to fund our
cash flow needs, we may have to reduce or stop planned growth or scale back operations and reduce staff.</P>
<B><P>Off-Balance Sheet Arrangements </P>
</B>
<P>We have no off-balance sheet financing arrangements. </P>
<B><P>Contractual Obligations </P>
</B>
<P>We had the following aggregate future minimum operating lease payments at September 30, 2009 (in thousands):</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="45%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD WIDTH="80%" BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Annual periods ending September 30
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="3%" BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD WIDTH="17%" BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
2010</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $                182&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
2011</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                81&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
2012</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     74&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $                337&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>


<FONT SIZE=2>
<B><P>Forward Looking Statements-Safe Harbor</P>
</B>
<P>Our business, financial condition, results of operations, cash flows and prospects, and the prevailing market price and performance of
our common stock, may be adversely affected by a number of factors, including the matters discussed in &quot;Risk Factors&quot;.
Certain statements and information set forth in this Form S-1, as well as other written or oral statements made from time to time by us or by
our authorized executive officers on our behalf, constitute "forward-looking statements" within the meaning of the Federal Private Securities
Litigation Reform Act of 1995. We intend for our forward-looking statements to be covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995, and we set forth this statement and the risk factors set forth
herein in order to comply with such safe harbor provisions. You should note that our forward-looking statements speak only as of the date
of this Form S-1 or when made and we undertake no duty or obligation to update or revise our forward-looking statements, whether as a
result of new information, future events or otherwise. Although we believe that the expectations, plans, intentions and projections reflected
in our forward-looking statements are reasonable, such statements are subject to known and unknown risks, uncertainties and other
factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. The risks, uncertainties and other factors that our stockholders and
prospective investors should consider are included in &quot;Risk Factors&quot; beginning on page 3.  </P>

<P ALIGN="CENTER">                                                57
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<B><P ALIGN="CENTER"><A NAME="#_Toc248297521">CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE</A></P>
</B><P>On October 24, 2008, we dismissed Pender Newkirk &amp; Company LLP ("Pender") as our independent registered public
accounting firm. Concurrent with this action on the same date, our audit committee appointed Stonefield Josephson, Inc. ("Stonefield") as
our new independent registered public accounting firm. The decision to change accountants was approved by the audit committee and
ratified by the Board of Directors. </P>
<P>The audit report of Pender on the financial statements of clickNsettle.com, Inc. as of and for the year ended June 30, 2008, did not
contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting
principles. </P>
<P>During the period from October 3, 2007, the date we hired Pender, to the end of the most recent fiscal year on June 30, 2008 and from
July 1, 2008 to the date of our dismissal of Pender, there have been no disagreements with Pender on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure, which if not resolved to Pender's satisfaction, would have
caused it to make reference to the subject matter of the disagreement in connection with its reports. During the same period, there have
been no reportable events, as that term is described in Item 304(a)(1)(v) of Regulation S-K. </P>
<P>We provided Pender with a copy of the foregoing disclosures. A copy of a letter from Pender to the Securities and Exchange
Commission, dated October 24, 2008, was filed as Exhibit 16.1 to the Company's Current Report on Form 8-K filed on October 29, 2008.
During the two most recent fiscal years, and the subsequent interim period prior to engaging Stonefield, neither the Company nor anyone
on its behalf consulted Stonefield regarding the application of accounting principles to a specific transaction, either completed or proposed,
or the type of audit opinion that might be rendered on the Company's financial statements, and no written or oral advice was provided by
Stonefield that was a factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issues
as set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.</P>

<B><P ALIGN="CENTER"><A NAME="#_Toc248297522">DIRECTORS AND EXECUTIVE OFFICERS</A></P>
</B><P>The following table sets forth information, as of December 14, 2009, concerning the individuals named below, including their ages
and their positions as of December 14, 2009): </P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="85%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Name </B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Age</B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Position </B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Andrew A. Brooks, M.D.&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
47</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Chairman of the Board and Chief Executive Officer&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Mikhail Kvitnitsky&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
45</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
President, Chief Operating Officer and Director&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Derrick Romine&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
41</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Chief Financial Officer and Secretary&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Joseph Loggia&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
49</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Director&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Thomas H. Morgan&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
56</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Director&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Ronald N. Richards, Esq.&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
42</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Director&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Steven D. Rubin&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
49</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Director&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Subbarao Uppaluri, Ph.D.&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
59</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Director&nbsp;</FONT></TD>
</TR>
</Table>

<FONT SIZE=2><P>Note - our Directors serve a term of one year.</P>
<B><P>Business Experience of Directors and Executive Officers During the Past Five Years </P>

<I><P>Andrew A. Brooks, M.D. </B></I>Dr. Brooks serves as our Chairman of the Board and Chief Executive Officer. He founded Cardo
Medical, LLC on April&nbsp;6, 2007, and has served as the President and Chief Executive Officer and manager of Cardo and of
Accelerated Innovation, LLC. Dr. Brooks has been in the private practice of orthopedic surgery since 1994, specializing in sports medicine,
arthroscopy and joint reconstruction. He has previously served as a design consultant to major companies for joint reconstruction and
sports medicine products. He currently maintains a part time surgical practice at the Southern California Orthopedic Institute in Van Nuys,
California. </P>

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<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<P>Dr. Brooks was a founder and managing partner of Specialty Surgical Centers, a group of multi-specialty outpatient surgical centers
operating in Beverly Hills, Encino, Irvine, Arcadia and Westlake Village. These surgical centers were sold to Symbion Healthcare, Inc. in
August 2005. Dr. Brooks currently serves as a managing partner of Specialty Surgical Center in Westlake Village. Dr. Brooks also
co-founded the Ridgecrest Sports Rehabilitation Center in 1995, which was sold to a public company in February&nbsp;1998. </P>
<P>Dr. Brooks is a graduate of the University of Southern California School of Medicine. He completed his residency in Orthopaedic
Surgery at the University of Southern California, and subsequently completed a fellowship in arthroscopic reconstructive surgery and
sports medicine at the Hughston Clinic in Columbus, Georgia. Dr. Brooks is board-certified by the American Board of Orthopaedic Surgery
and is a Fellow of the American Academy of Orthopaedic Surgeons. He is also a Fellow of the American College of Surgeons and a
member of the Arthroscopy Association of North America. He is an active member of the Los Angeles
Chapter of the Young Presidents Organization. </P>
<B><I><P>Michael Kvitnitsky. </B></I>Mr.&nbsp;Kvitnitsky serves as our President and Chief Operating Officer and as a director of our
company. Since May&nbsp;2007, Mr.&nbsp;Kvitnitsky has served as the Chief Operating Officer and manager of Cardo Medical, LLC and
Accelerated Innovation, LLC. He also has served as the President and manager of Cervical Xpand, LLC, a developmental-stage spinal
company, since July&nbsp;2005, and of Uni-Knee, LLC, a developmental-stage orthopedic company, since May 2006. Mr.&nbsp;Kvitnitsky
founded Accin Corporation, a medical device company, for which he has served as President, Chief Executive Officer and director since
February&nbsp;2005. Prior to that, Mr. Kvitnitsky was employed by Stryker Corporation (NYSE: SYK) from 1998 until January 2005; his
last position with Stryker was Vice President, Innovation and Business Development, of Stryker International. His prior employment, from
1990 to 1998, included engineering and research positions with multinational medical device companies in the United States and, from
1986 to 1989, included research institutions in Ukraine. </P>
<B><I><P>Derrick Romine. </B></I>Mr.&nbsp;Romine serves as our Chief Financial Officer and Secretary. Since February&nbsp;2008,
Mr.&nbsp;Romine has served as the Chief Financial Officer of Cardo Medical, LLC. Prior to joining Cardo, he worked for 18&nbsp;years in
all aspects of finance and strategy, including corporate restructuring, capital structure management and organizational development. Most
recently, from 2004 to February&nbsp;2008, Mr.&nbsp;Romine served as Controller for Specialty Surgical Centers, following its acquisition
by Symbion Healthcare, Inc. From 2000 to 2004, Mr.&nbsp;Romine held a key financial position at Doane Pet Care, Inc. As Doane's
Director of Financial Planning and Control, he orchestrated financial modeling for the largest private label pet food manufacturer globally.
Prior to that, from 1997 to 2000, he worked in strategic projects as Director of Strategy &amp; Analysis at Service Merchandise
Corporation, a retail company, where he focused specifically on corporate restructure and capital management. Prior to 1997,
Mr.&nbsp;Romine held various financial and operational positions in both the public and private sector. </P>
<B><I><P>Joseph Loggia. </B></I>Mr.&nbsp;Loggia serves as a director of our company. Mr. Loggia has served as the Chief Executive
Officer of Advanstar, Inc. and its wholly-owned subsidiary, Advanstar Communications, Inc., a leading worldwide media company providing
integrated marketing solutions for the fashion, life sciences and powersports industries, since January&nbsp;2004. As Chief Executive
Officer, he led Advanstar's effort to develop and implement a new strategy, transforming the company from a traditional B2B publisher and
trade show producer to a market-focused media company, culminating in a $1.14&nbsp;billion sale of the company in 2007 to Veronis
Suhler Stevenson, LLC, a private equity firm focusing on media, communications, information and education industries in North America
and Europe. From 2001 through 2003, Mr.&nbsp;Loggia served as President and Chief Operating Officer of Advanstar, leading the
company's efforts to enhance its operating efficiencies and implementing state-of-the-art data systems, new business development
procedures and rewards, and a new growth-<A NAME="eolPage71"></A>based management compensation system. From 1995 through
1998, he served as President and Chief Executive Officer of MAGIC International, producer of the MAGIC Marketplace apparel trade show,
leading the acquisition of MAGIC by Advanstar in 1998. Prior to joining MAGIC, Mr. Loggia, who is a certified public accountant, was a
manager at the accounting firm of Coopers &amp; Lybrand in its fraud and financial investigations division, after having spent
10&nbsp;years in law enforcement. </P>

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<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<B><I><P>Thomas H. Morgan. </B></I>Mr.&nbsp;Morgan serves as a director of our company.  He is the Managing Member of Morgan
Exploration, LLC, Morgan Marathon, LLC and Morgan United, LLC.  Since 1982, Mr. Morgan also has been the founder and President of
Morgan Energy Corporation, an oil and gas exploration company.  Prior to that, he worked for Conoco Oil Company and Gulf Oil Company.
Mr. Morgan has drilled, developed and owned interests in thousands of oil and gas wells throughout the Rocky Mountain region, Texas and
Oklahoma.  Through other entities, since 1985, Mr. Morgan has owned and developed numerous shopping centers, apartment complexes,
condo towers and luxury single-family residences throughout the United States. </P>

<B><I><P>Ronald N. Richards, Esq. </B></I>Mr.&nbsp;Richards serves as a director of our company. Mr.&nbsp;Richards has
represented Specialty Surgical Centers, as one of its litigation counsel, and other medical professionals and clinics throughout Southern
California. Since 2000, he was the senior partner of Ronald Richards &amp; Associates based in Beverly Hills, California. Since 2003, Mr.
Richards has served as Secretary of Sierra Towers Homeowners Association. Mr.&nbsp;Richards was a professor of law at the San
Fernando Valley College of Law from 2006 to 2007. He has had numerous published opinions in the state courts and federal courts of
appeal. Mr.&nbsp;Richards lectures to other attorneys on various legal matters and has published works on various related medical topics.
In 2008, he obtained a Certificate of Management from the Anderson School of Management at the University of California, Los Angeles .
Mr.&nbsp;Richards received his law degree from University of La Verne in 1995 and his undergraduate degree from the University of
California, Los Angeles, in 1991. </P>
<B><I><P>Steven D. Rubin.</B></I> Mr. Rubin serves as a director of our company. Mr. Rubin has served as Executive
Vice President-Administration and as a director of OPKO Health, Inc. since May 2007. Mr. Rubin served as the Senior Vice President, General Counsel
and Secretary of IVAX from August 2001 until September 2006. Prior to joining IVAX, Mr. Rubin was Senior Vice President, General
Counsel and Secretary with privately-held Telergy, Inc., a provider of business telecommunications and diverse optical network solutions,
from early 2000 to August 2001. In addition, he was with the Miami law firm of Stearns Weaver Miller Weissler Alhadeff &amp; Sitterson
from 1986 to 2000, in the Corporate and Securities Department. Mr. Rubin had been a shareholder of that firm since 1991 and a director
since 1998. Mr. Rubin currently serves on the board of directors of Dreams, Inc., a vertically integrated sports licensing and products
company, Safestitch Medical, Inc., a medical device company, Prolor Biotech, Inc., a development stage biopharmaceutical company,
Kidville, Inc., which operates large, upscale facilities, catering to newborns through five-year-old children and their families and offers a
wide range of developmental classes for newborns-5 year olds, Non-Invasive Monitoring Systems, Inc., a medical device company, Castle
Brands, Inc., a developer and marketer of premium brand spirits, SearchMedia Holdings Limited, a leading nationwide multi-platform media
company based in Shanghai, China and Neovasc, Inc., a company developing and marketing medical specialty vascular devices.</P>
<B><I><P>Subbarao Uppaluri, Ph.D. </B></I>Dr. Uppaluri serves as a director of our company. Dr. Uppaluri has served as Senior Vice
President and Chief Financial Officer of OPKO Health, Inc. since May 2007. Dr. Uppaluri served as the Vice President, Strategic Planning
and Treasurer of IVAX from 1997 until December 2006. Before joining IVAX, from 1987 to August 1996, Dr. Uppaluri was Senior Vice
President, Senior Financial Officer and Chief Investment Officer with Intercontinental Bank, a publicly traded commercial bank in Florida. In
addition, he served in various positions, including Senior Vice President, Chief Investment Officer and Controller, at Peninsula Federal
Savings &amp; Loan Association, a publicly traded Florida S&amp;L, from October 1983 to 1987. His prior employment, during 1974 to
1983, included engineering, marketing and research positions with multinational companies and research institutes in India and the United
States. Dr. Uppaluri currently serves on the board of directors of Kidville, Inc., which operates large, upscale facilities, catering to newborns
through five-year-old children and their families and offers a wide range of developmental classes for newborns-5 year olds, Non-Invasive
Monitoring Systems, Inc., a medical devices company, and Winston Pharmaceuticals Inc., a specialty pharmaceutical company engaged in
the discovery and development of products for pain management.</P>
<B><P>Relationship among Directors and Executive Officers </P>
</B>
<P>Pursuant to the terms of the Merger Agreement, Dr.&nbsp;Brooks nominated Messrs.&nbsp;Kvitnitsky, Loggia, Morgan and Richards
and himself to serve as our directors, and Dr.&nbsp;Phillip Frost nominated Mr.&nbsp;Rubin and Dr.&nbsp;Uppaluri to serve as our
directors. No family relationships exist among any of the individuals who will serve as our directors or executive officers. </P>

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<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<B><P ALIGN="CENTER"><A NAME="#_Toc248297523">EXECUTIVE COMPENSATION</A></P>
<P>Summary Compensation Table </P>
</B>
<P>The following table sets forth a summary of compensation awarded to, earned by or paid to the principal executive officers and
principal financial officers of Cardo.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="85%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Name and </B></FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Principal </B></FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
All Other</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR ALIGN="center" VALIGN="bottom">
<TD><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Position </B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
<TD><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Year</B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
<TD><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Salary</B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
<TD><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Bonus</B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
<TD><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Stock Options</B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
<TD><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Compensation</B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
<TD><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Total</B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Andrew A. Brooks (1)&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
2008</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $              250,000&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $                      -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $                 29,250&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $                         -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $      279,250&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Mikhail Kvitnitsky (2) (3)</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
2008</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                 220,000&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                         -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                    26,000&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                            -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
         246,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
2007</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                   52,000&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                         -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                            -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                    30,276&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
           82,276&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Derrick Romine (4)&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
2008</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                 180,000&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                         -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                    61,100&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                            -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
         241,100&nbsp;</FONT></TD>
</TR>
</Table>


<I><FONT SIZE=1><P ALIGN="JUSTIFY"><A NAME="FIS_UNIDENTIFIED_TABLE_8"></A></P>
<P>(1) Dr.&nbsp;Brooks currently serves as our Chairman of the Board and Chief Executive Officer. He has served as the President, Chief
Executive Officer and manager of Cardo Medical ,LLC since May&nbsp;2007 and Accelerated Innovation, LLC from May 2007 until its
merger with Cardo Medical, LLC. </P>

<P>(2) Mr.&nbsp;Kvitnitsky currently serves as our President and Chief Operating Officer and as a director of our company.
Mr.&nbsp;Kvitnitsky has served as the Chief Operating Officer and manager of Cardo Medical, LLC since May 2007 and Accelerated
Innovation, LLC from May 2007 until its merger with Cardo Medical, LLC. He also has served as the President and manager of Cervical
Xpand, LLC since July&nbsp;2005, and of Uni-Knee, LLC since May&nbsp;2006 until their mergers with Cardo Medial, LLC.
Mr.&nbsp;Kvitnitsky founded Accin Corporation, for which he has served as President, Chief Executive Officer and director since
February&nbsp;2005. The information presented in this table reflects all compensation received by Mr.&nbsp;Kvitnitsky from Cardo,
Accelerated Innovation, Cervical Xpand, Uni-Knee and Accin on a consolidated basis for the applicable periods.</P>

<P>(3) These amounts reflect 5% of the net receipts from the sale of the Align 360 unicompartmental knee product, which
Mr.&nbsp;Kvitnitsky was entitled to receive per his compensation arrangement with us. See "Employment Agreements and Change in
Control Arrangements-Compensation Arrangement with Michael Kvitnitsky" below.</P>

<P>(4) Mr.&nbsp;Romine currently serves as our Chief Financial Officer and Secretary. He has served as the Chief Financial Officer of
Cardo Medical, LLC since February 2008.</P>
</I></FONT><B><FONT SIZE=2>
<P>Director Compensation </P>
</B>
<P>The following table sets forth a summary of compensation awarded to, earned by or paid to each director for the fiscal year ended
December&nbsp;31, 2008. </P>
<P>We anticipate reimbursing each director for reasonable travel expenses related to that director's attendance at Board of Directors and
committee meetings. </P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="75%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Fees Earned or</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
All Other</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Name </B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Paid In Cash</B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Compensation</B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Total</B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Joseph Loggia</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $                                 -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $                      5,000&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $           5,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Thomas H. Morgan</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                    -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                         5,000&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
              5,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Ronald N. Richards, Esq.</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                    -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                         5,000&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
              5,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Steven D. Rubin</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                    -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                         5,000&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
              5,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Subbarao Uppaluri</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                    -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                         5,000&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
              5,000&nbsp;</FONT></TD>
</TR>
</Table>


<FONT SIZE=2>
<B><P>Compensation of Named Executive Officers </P>
</B>
<P>Commencing August 29, 2008, the closing date of the Merger, the annual compensation for our executive officers is as follows: </P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="75%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Name and </B></FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Principal </B></FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
 &nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
(1) Bonus</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR ALIGN="center" VALIGN="bottom">
<TD><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Position </B>
<HR NOSHADE SIZE=2 WIDTH="95%" ALIGN="LEFT">
</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Salary</B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE=-1><B>
Potential</B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Total</B>
<HR NOSHADE SIZE=2 WIDTH="95%">
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
Andrew A. Brooks, Chief Executive Officer&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
 $                    250,000&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
 $              250,000&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $             500,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
Mikhail Kvitnitsky, President and Chief Operating Officer&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
 $                    220,000&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
 $              220,000&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $             440,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
Derrick Romine, Chief Financial Officer and Secretary&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
 $                    180,000&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
 $                45,000&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $             225,000&nbsp;</FONT></TD>
</TR>
</Table>


<I><FONT SIZE=1>
<P>(1) The amount reflected in this column reflects the maximum potential bonus that our Board of Directors may grant to each of the
above executive officers.</P>
</I></FONT><FONT SIZE=2>

<P ALIGN="CENTER">                                                61
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<B><P>Equity Incentive Plan </P>
</B>
<P>Our Board of Directors will consider adopting and implementing an equity incentive plan, pursuant to which we may grant various types
of equity and equity-based awards to our executives, employees and contractors, including awards of stock options and restricted stock.
Awards made pursuant to the plan may be made subject to the attainment of performance goals relating to one or more business criteria. If
adopted, this plan is intended to assist our company in attracting, retaining and motivating designated eligible employees and independent
contractors of ours and our subsidiaries and to increase their interest in the success of our company in order to promote our long-term
interests. This plan will be designed to meet this intent by providing designated eligible persons with a proprietary interest in pursuing the
long-term growth, profitability and financial success of our company. </P>
<P>The Compensation Committee of our Board of Directors, is expected to have complete authority, subject to the express provisions of
the plan, to approve the employees or contractors to be granted awards, to determine the number of stock options or other awards to be
granted, to set the terms and conditions of the awards, to remove or adjust any restrictions and conditions upon those awards, and to
adopt rules and regulations, and to make all other determinations deemed necessary or desirable for the administration of this plan. </P>
<B><P>Employment Agreements and Change in Control Arrangements </P>
</B>
<I><P>Michael Kvitnitsky Employment Agreement, as Terminated as of June&nbsp;23, 2008 </P>
</I>
<P>On January&nbsp;31, 2005, Michael Kvitnitsky entered into an employment agreement with Accin Corporation, under which he served
as Chief Executive Officer of Accin. Accin assigned this agreement to Cardo's wholly-owned subsidiary, Accelerated Innovation, LLC, on
May&nbsp;21, 2007, along with substantially all of the other assets of Accin. On June&nbsp;6, 2008, Mr.&nbsp;Kvitnitsky and Accelerated
Innovation entered into an amendment to this employment agreement to remove references to a shareholders agreement for Accin. On
June&nbsp;23, 2008, Cardo acquired all of the ownership interests in Accelerated Innovation held by Accin, and Accelerated Innovation
became the wholly-owned subsidiary of Cardo. Upon the closing of this acquisition, Mr. Kvitnitsky and Accelerated Innovation terminated
Mr.&nbsp;Kvitnitsky's employment agreement. </P>
<P>Prior to its termination, the term of the employment agreement was from June&nbsp;1, 2005 through May&nbsp;30, 2008, with
automatic renewal thereafter for successive one-year periods ending on each May&nbsp;30, unless (i)&nbsp;either party elected to
terminate the employment agreement at the end of the then-current term by giving the other party four months' advance written notice, or
unless the agreement was earlier terminated by Accelerated Innovation for "Cause" or by Mr. Kvitnitsky for "Good Reason," as defined in
the employment agreement. The employment agreement was automatically renewed for one year on May&nbsp;30, 2008 and terminated
by mutual agreement effective June&nbsp;23, 2008. Under this employment agreement, Mr.&nbsp;Kvitnitsky was entitled to receive the
following compensation and benefits: </P>
<P>Initial annual base salary of $52,000; Eligibility to receive stock options upon implementing a stock option plan; Eligibility to share in
"milestone" payments; Five weeks of paid time off, including sick, vacation and personal days; Reimbursement for all reasonable and
necessary business-related expenses; Participation in the life and health insurance plans, 401(k) plan and other employee benefit plans
and programs generally made available to other employees; and certain severance benefits if his employment was terminated by
Accelerated Innovation without Cause or by Mr.&nbsp;Kvitnitsky for Good Reason. If Mr. Kvitnitsky fails to perform his duties under this
agreement or to otherwise comply with the terms of this agreement, or if Mr. Kvitnitsky does not cure that failure within 30 days after his
receipt of written notice of the failure, his employment will be terminated.  Mr. Kvitnitsky will be afforded a reasonable opportunity to be
heard by the Board of Directors prior to termination.</P>
<I><P>Compensation Arrangement with Michael Kvitnitsky, as Terminated as of June 23, 2008 </P>
<P> </P>
</I><P>Michael Kvitnitsky was entitled to receive 5% of net receipts from the sale of the Align 360 unicompartmental knee product. For the
year ended December 31, 2006, Accin (the party from which Cardo acquired its medical device business in 2007) paid $100,000 to Mr.
Kvitnitsky under this arrangement, and paid him $6,863 for the period from January 1, 2007 through May 21, 2007 (the date of sale of
Accin's business to Cardo). For the period from May 21, 2007 through December 31, 2007, Accelerated Innovation (which acquired Accin's
medical device business) paid $22,918 to Mr. Kvitnitsky under this arrangement, and paid him $26,933 for the six months ended June 30,
2008. </P>

<P ALIGN="CENTER">                                                62
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<I><P>Derrick Romine Employment Offer Letter </P>
</I>
<P>Derrick Romine serves as the Chief Financial Officer of Cardo, and will serve in that same capacity for Cardo, on an at-will basis
pursuant to an employment offer letter dated September&nbsp;5, 2008. This offer letter provides that Mr.&nbsp;Romine will receive an
annual base salary of $180,000, a discretionary bonus of up to a maximum amount of $45,000 based on specific performance objectives
tied to Cardo meeting its financial targets, and reimbursement for normal business expenses. In addition, he is entitled to participate in all
health insurance and employee benefits adopted by Cardo and is eligible to accrue three weeks of vacation during his first year of
employment. The offer letter also confirmed the grant of options to Mr.&nbsp;Romine exercisable for units of membership interests in
Cardo, which converted into options exercisable for shares of common stock of Cardo upon completion of the Merger. See the section
titled "Outstanding Option Grants" below for more information regarding the options granted to Mr.&nbsp;Romine. </P>
<P>If Cardo terminates Mr.&nbsp;Romine's employment without "Cause" (as defined below), or if he terminates his employment without
"Good Reason" (as defined below), at any time on or prior to September&nbsp;4, 2010, Mr.&nbsp;Romine will be entitled to the following
severance benefits: Cardo will pay Mr.&nbsp;Romine the sum of six months of his then-current monthly salary as severance payment to be
paid in bi-weekly installments so long as he does not work or otherwise provide services to a competitor of Cardo during that six-month
period. Fifty percent of Mr.&nbsp;Romine's unvested options will become fully exercisable as of the date of termination of his employment
and, together with any vested options at the termination date, may be exercised pursuant to the terms thereof within 90&nbsp;days of the
termination date (or one year after the termination date if Mr.&nbsp;Romine dies during that 90-day period). The remaining unvested
options at the termination date, to the extent not then presently exercisable, shall terminate as of the termination date and shall not be
exercisable thereafter.</P>
<P>If Mr.&nbsp;Romine is terminated for Cause, or if he voluntarily terminates his employment or resigns from his positions with the
Company without Good Reason, he will not be entitled to the Severance Benefits. As used in the offer letter, the term "Cause" means an
act or omission that constitutes fraud, deceit, intentional misconduct, a knowing violation of law, recklessness or gross negligence that
materially and adversely has affected or affects the business of Cardo, a material breach of any of Mr.&nbsp;Romine's obligations under
any written agreement with Cardo, or material nonperformance of his duties to Cardo which has not been cured after 15&nbsp;days' written
notice from Cardo setting forth in reasonable detail the nature of the nonperformance. As used in the offer letter, the term "Good Reason"
means a material breach by Cardo of any of their obligations under any written agreement with Mr.&nbsp;Romine, a substantial and
unusual reduction in his duties, responsibilities or authority, or receipt of instructions to take actions in violation of law that has not been
cured after 15&nbsp;days' written notice from Mr.&nbsp;Romine to Cardo and setting forth in reasonable detail the nature of the action
giving rise to the claim of Good Reason. </P>
<B>
<P ALIGN="CENTER"><A NAME="#_Toc248297524">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT </A></P>
</B><P>The following tables set forth information with respect to the beneficial ownership of our outstanding common stock as of
December&nbsp;14, 2009, by (i)&nbsp;each nominee for director of ours, (ii)&nbsp;each named executive officer identified in the
Summary Compensation Table, (iii)&nbsp;all nominees for director and nominees for executive officers as a group, and (iv)&nbsp;each
stockholder identified as beneficially owning greater than 5% of our common stock. Except as otherwise indicated below, each person
named in the tables has sole voting and investment power with respect to all shares of common stock beneficially owned by that person,
except to the extent that authority is shared by spouses under applicable law. To our knowledge, none of the shares reported below are
pledged as security. </P>
<P>For purposes of the following tables, a person is deemed to be the beneficial owner of securities that can be acquired by that person
within 60 days from December 14, 2009 upon exercise of options, warrants and/or other convertible or exercisable securities. Each
beneficial owner's percentage ownership is determined by assuming that options, warrants and other convertible or exercisable securities
that are held by that person (but not those held by any other person) and that are convertible or exercisable within the 60-day period have
been exercised. The percentage of outstanding common shares has been calculated based upon 230,293,141 shares of common stock
outstanding on December 14, 2009. None of the stockholders listed below have any options, warrants or other derivative securities with
respect to our common stock that are convertible or exercisable within 60 days from December 14, 2009. </P>

<P ALIGN="CENTER">                                                63
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="75%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD COLSPAN=7 ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Shares of Common Stock </B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD COLSPAN=7 ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Beneficially Owned </B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD COLSPAN=3 ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Amount and Nature of </B></FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD COLSPAN=3 ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Directors and Officers </B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD COLSPAN=3 ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Beneficial Ownership </B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD COLSPAN=3 ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Percent of Class</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Andrew A. Brooks, M.D.&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:#,##0"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
61,868,189</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
26.87</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
%&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Mikhail Kvitnitsky&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:#,##0"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
28,956,653</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
12.57</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
%&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Joseph Loggia&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 8,000</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
*&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Thomas H. Morgan&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:#,##0"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
7,863,615</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
3.42</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
%&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Ronald N. Richards, Esq.&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:#,##0"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
675,205</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
*&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Derrick Romine&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:#,##0"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
771,941</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
*&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Steven D. Rubin&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:#,##0"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
53,197</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
*&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Subbarao Uppaluri, Ph.D.&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:#,##0"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
346,967</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
*&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
All directors and executive officers as a group (8 persons)&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:#,##0"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
100,543,767</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
43.66</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
%&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
*Indicates ownership of less than 1%.&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="bottom"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
</Table>

<P><TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="75%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD COLSPAN=7 ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Shares of Common Stock </B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD COLSPAN=7 ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Beneficially Owned </B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD COLSPAN=3 ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Number and Nature of </B></FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD COLSPAN=3 ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
5% or More Shareholders (1) </B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD COLSPAN=3 ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Beneficial Ownership </B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD COLSPAN=3 ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Percent of Class</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
Frost Gamma Investments Trust (2)&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="top" STYLE="vnd.ms-excel.numberformat:#,##0"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
33,250,911</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="bottom"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 &nbsp;</FONT></TD>
<TD ALIGN="right" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
14.44</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
%&nbsp;</FONT></TD>
</TR>
</Table></P>


<I><FONT SIZE=1>
<P>&nbsp;(1) Based on information in separate Schedule 13D dated September 8, 2008, Andrew A. Brooks, M.D. and Michael Kvitnitsky
also are 5% or more stockholders. The business address of Andrew A. Brooks and Michael Kvitnitsky is 9701 Wilshire Boulevard, Suite
1100, Beverly Hills, CA 90212.</P>

<P>(2) Based on information in Amendment No. 2 to Schedule 13D dated December 8, 2009, Frost Gamma Investments Trust holds
33,250,911 shares of common stock. The business address of Frost Gamma Investments Trust is 4400 Biscayne Boulevard,
Suite&nbsp;1500, Miami, Florida 33137. Phillip Frost, M.D. is the trustee and Frost Gamma Limited Partnership is the sole and exclusive
beneficiary of Frost Gamma Investments Trust. </P>
</I></FONT><FONT SIZE=2>

<P ALIGN="CENTER">                                                64
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>


<B><P>Outstanding Option Grants </P>
</B>
<P>In August&nbsp;2008, Cardo LLC issued options exercisable for units of membership interests in Cardo LLC with an exercise price of
$147,625 per unit (which is not less than the fair market value on the date of grant). Each option has a term of 10&nbsp;years and vests in
equal installments over a five-year period commencing on the first anniversary of the date of grant. In connection with the Merger, these
options converted into options exercisable for shares of our common stock with an exercise price of $0.22126 per share (which is not less
than the fair market value on the date of grant). The following table provides information with respect to (i)&nbsp;the name and relation of
the optionee to Cardo, (ii)&nbsp;the number of units of membership interests in Cardo that may be acquired pursuant to an exercise of the
options, and (iii)&nbsp;the number of shares of Cardo's common stock that may be acquired pursuant to an exercise of the options, in
each case subject to the terms of the options: </P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="65%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
Number of</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
Cardo Shares</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
pursuant to</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Name and Relation
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
Option Exercise
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Andrew A. Brooks, MD</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                225,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
President, Chief Executive Officer and Director</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Mikhail Kvitnitsky,</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                200,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Chief Operating Officer and Director</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Derrick Romine,</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                470,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Chief Financial Officer&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Joseph Loggia,</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                  40,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Director</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Thomas H. Morgan,</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                  40,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Director</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Ronald N. Richards,</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                  40,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Director</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Steven D. Rubin,</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                  40,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Director</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Subbarao Uppaluri, PhD</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                  40,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Director</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
</Table>

<B><P>Equity Compensation Plan Information</P> </B>

<P>The following table summarizes the number of outstanding options granted to employees, service providers and directors
under the Company's compensation plans and arrangements as of the quarter ended September 30, 2009.
For a description of equity compensation plans not approved by security holders see Note 12 to the Consolidated Financial
Statements for the year ended December 31, 2008 included elsewhere in this registration statement. </P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="85%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Number of securities</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Number of securities</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
to be issued upon</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Weighted-average</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
remaining available</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
exercise of</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
exercise price of</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
for future issuance</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
outstanding options,</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
outstanding options,</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
under equity</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
warrants and rights</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
warrants and rights</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
compensation plans</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Equity compensation plans</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;     not approved by security holders</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                          2,358,400&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
  &nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
      &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $                                   0.23&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                         -  &nbsp;
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Equity compensation plans&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;     approved by security holders</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                         -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
  &nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                         -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                         -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
Total</B></FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
 </B></FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
                          2,358,400&nbsp;</B>
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
   </B></FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
 $                                   0.23&nbsp;</B>
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
   </B></FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
                         - &nbsp;</B>
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>


<P ALIGN="CENTER">                                                65
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<B><FONT SIZE=2>
<P ALIGN="CENTER"><A NAME="#_Toc248297525">TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS</A></P>
</B><P>The Company appointed Ladenburg as the Company's exclusive placement agent for the private placement offering that closed in
October and November 2009.  Dr. Phillip Frost, through Frost Gamma Investments Trust, is a common principal stockholder of both the
Company and of Ladenburg.  Furthermore, certain senior managers of the placement agent are stockholders of the Company.  After
reviewing all information related to the transaction between the Company and Ladenburg, a potential related party transaction, the
Company's Audit Committee approved the related party transaction.  Ladenburg, as the placement agent, for acting in such capacity for
the shares of common stock offered in the private placement offering, received: (i) a cash commission equal to eight percent (8%) of the
gross proceeds from the offering that was received from Approved Investors; (ii) a cash non-accountable expense allowance equal to one
percent (1%) of the gross proceeds of the offering to Approved Investors; (iii) reimbursement of Ladenburg's out-of-pocket expenses
related to the offering, including its legal fees and expenses up to $40,000; and (iv) the issuance to Ladenburg of warrants to purchase
575,613 shares of common stock equal to six percent (6%) of the number of shares sold in the offering to Approved Investors, at an
exercise price of $0.44 per share.  The approximate dollar value of the related party transaction is $317,198.</P>

<B><P ALIGN="CENTER"><A NAME="#_Toc248297526">CORPORATE GOVERNANCE</A></P>
<P>Director Independence </P>
</B>
<P>Of the seven members of the Board of Directors five are determined to be independent, they are Joseph Loggia, Thomas H. Morgan,
Steven D. Rubin, Ronald N. Richards and Subbarao Uppaluri, all of whom are independent directors as determined by the rules of NYSE
AMEX, LLC (formerly the American Stock Exchange).</P>
<B><P>Audit Committee </P>
</B>
<P>The members of the Audit Committee are Subbarao Uppaluri, Thomas H. Morgan and Joseph Loggia, all of whom are independent
directors as determined by the rules of NYSE AMEX, LLC (formerly the American Stock Exchange). The responsibilities and duties of the
Audit Committee consist of but are not limited to: (1) overseeing the financial reporting process; (2) meeting with our external auditors
regarding audit results; (3) engaging and ensuring independence of our outside audit firm and (4) reviewing the effectiveness of the
Company's internal controls. Our Board has determined that Mr. Loggia and Mr. Uppaluri qualify as Audit Committee financial experts
within the meaning of applicable regulations of the SEC, promulgated pursuant to the Sarbanes-Oxley Act of 2002.</P>

<B><P ALIGN="CENTER"><A NAME="#_Toc248297527">MATERIAL CHANGES</A></P>
</B><P>None</P>
<B><P ALIGN="CENTER"><A NAME="#_Toc248297528">INCORPORATION OF CERTAIN INFORMATION BY REFERENCE</A></P>
</B><P>None</P>
<B><P ALIGN="CENTER"><A NAME="#_Toc248297529">DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES</A></P>
</B><P>The Company's Amended and Restated Certificate of Incorporation provides that the Company will indemnify an officer, director,
or former officer or director, to the fullest extent permitted under the General Corporation Law of the State of Delaware or any other
applicable laws as presently or thereafter in effect.</P>
<P>Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons
controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable. </P>

<B><P ALIGN="CENTER"><A NAME="#_Toc248297530">LEGAL MATTERS </A></P>
</B><P>The validity of the shares of common stock offered through this prospectus will be passed on by Akerman Senterfitt.</P>

<P ALIGN="CENTER">                                                66
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<B><P ALIGN="CENTER"><A NAME="#_Toc248297531">EXPERTS</A> </P>
</B><P>The financial statements for the years ended December 31, 2007 and 2008, included in this prospectus to the extent and for the
periods indicated in their reports, have been audited by Stonefield Josephson, Inc., independent registered public accountants, and are
included herein in reliance upon the authority of such firm as experts in accounting and auditing in giving such reports.</P>

<B><P ALIGN="CENTER"><A NAME="#_Toc248297532">HOW TO GET MORE INFORMATION </A></P>
</B><P>We file annual, quarter and periodic reports, proxy statements and other information with the Securities and Exchange
Commission using the Commission's EDGAR system. You may inspect these documents and copy information from them at the
Commission's public reference room at 100 F Street, NE, Washington, D.C. 20549. You may obtain information on the operation of the
public reference room by calling the SEC at 1-800-SEC-0330. The Commission maintains a web site that contains reports, proxy and
information statements and other information regarding registrants that file electronically with the Commission. The address of such site is
http//www.sec.gov.</P>
<P>You should rely only on the information contained in this prospectus. We have not authorized any person to provide you with any
information that is different.</P>

<P>&nbsp;</P>
<B><P ALIGN="CENTER">PART II</P>
<P ALIGN="CENTER">INFORMATION NOT REQUIRED IN PROSPECTUS</P>

<P>ITEM 13 - OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION</P>
</B>

<TABLE BORDER=0 CELLSPACING=1 CELLPADDING=2 WIDTH=65%>
<TR><TD WIDTH="62%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="33%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT">Amount
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT SIZE=2><P>Securities and Exchange Commission Registration Fee</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$624.03</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT SIZE=2><P>Legal Fees and Expenses</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">60,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT SIZE=2><P>Accounting Fees and Expenses</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">7,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT SIZE=2><P>Miscellaneous Expenses</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">3,000
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP">
<FONT SIZE=2><P>Total</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$70,624.03
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2>
<P>All amounts are estimates, other than the SEC's registration fee.</P>

<P>We are paying all expenses of the offering listed above.  No portion of these expenses will be borne by the selling stockholders.  The
selling stockholders; however, will pay any other expenses incurred in selling their common stock, including any brokerage commissions or
costs of sale.</P>
<B><P>ITEM 14 - INDEMNIFICATION OF DIRECTORS AND OFFICERS</P>
</B><P>The Company's Amended and Restated Certificate of Incorporation provides that the Company will indemnify an officer, director,
or former officer or director, to the fullest extent permitted under the General Corporation Law of the State of Delaware or any other
applicable laws as presently or thereafter in effect.  The Company is also party to an Indemnification Agreement with Directors and Officers
of the Company filed as Exhibit 10.12.  The Company must indemnify the Directors and Officers to the fullest extent permitted by law.</P>
<B><P></A>ITEM 15 - RECENT SALES OF UNREGISTERED SECURITIES</P>
</B><P>On June 30, 2009, Cardo Medical, Inc. closed on the sale of 8,689,319 shares of the Company common stock, par value $0.001
per share at a price of $0.35 per share for aggregate gross proceeds of $3,041,260.  The offering of common stock was conducted by the
Company in a non-brokered private placement to accredited investors pursuant to an exemption from registration provided by Section 4(2)
of the Securities Act of 1933, as amended.  The Company believes the exemption is available because the securities were not offered
pursuant to a general solicitation and the status of the investors as &quot;accredited investors&quot; as defined in Regulation D of the
Securities Act of 1933, as amended.</P>
<P>On September 21, 2009, Cardo Medical, Inc. closed on the sale of 485,714 shares of the Company common stock, par value $0.001
per share at a price of $0.35 per share for aggregate gross proceeds of $170,000.  The offering of common stock was the second tranche
of the June 30, 2009 offering referred to above.  The Company conducted the offering of common stock in a non-brokered private
placement to accredited investors pursuant to an exemption from registration provided by Section 4(2) of the Securities Act of 1933, as
amended.  The Company believes the exemption is available because the securities were not offered pursuant to a general solicitation and
the status of the investors as &quot;accredited investors&quot; as defined in Regulation D of the Securities Act of 1933, as amended.</P>

<P ALIGN="CENTER">                                                67
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<P>On October 27, 2009, Cardo Medical, Inc. sold 9,949,276 shares of common stock, par value $0.001 per share of the Company at a
price of $0.35 per share for aggregate gross proceeds of $3,482,250 as part of a private placement for maximum gross proceeds of
$6,500,000.  The Company relied on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended for the issuance of
the shares of common stock in the Company, which exception the Company believed was available because the securities were not
offered pursuant to a general solicitation and the status of the investors as &quot;accredited investors&quot; as defined in Regulation D of
the Securities Act, as amended.</P>
<P>On November 13, 2009, Cardo Medical, inc. sold 7,808,561 shares of common stock, par value $0.001 per share of the Company at a
price of $0.35 per share for aggregate gross proceeds of $2,733,000 in the second tranche of the prior private placement for maximum
gross proceeds of $6,500,000.  The November 13, 2009 closing completed the private placement.  The Company relied on the exemption
provided by Section 4(2) of the Securities Act of 1933, as amended for the issuance of the shares of common stock in the Company, which
exception the Company believed was available because the securities were not offered pursuant to a general solicitation and the status of
the investors as &quot;accredited investors&quot; as defined in Regulation D of the Securities Act, as amended.               </P>

<B><P>ITEM 16 - EXHIBITS</P>
<P ALIGN="CENTER">EXHIBITS AND FINANCIAL STATEMENT SCHEDULES</P></B>

<TABLE BORDER=0 CELLSPACING=1 CELLPADDING=1 WIDTH=95%>
<TR><TD WIDTH="11%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="39%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=4>
<B><FONT SIZE=2><P ALIGN="CENTER">Incorporated By Reference</P>
</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="BOTTOM">
<B><U><FONT SIZE=2><P ALIGN="CENTER">Exhibit Number</B></U></FONT></TD>
<TD WIDTH="39%" VALIGN="BOTTOM">
<B><U><FONT SIZE=2><P ALIGN="CENTER">Exhibit Description</B></U></FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM">
<B><U><FONT SIZE=2><P ALIGN="CENTER">Form</B></U></FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<B><U><FONT SIZE=2><P ALIGN="CENTER">File Number</B></U></FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM">
<B><U><FONT SIZE=2><P ALIGN="CENTER">Exhibit</B></U></FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM">
<B><U><FONT SIZE=2><P ALIGN="CENTER">Filing Date</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">2.1</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Merger Agreement and Plan of Reorganization, dated as of June 18, 2008, by and among clickNsettle.com, Inc.,
Cardo Medical, LLC and Cardo Acquisition, LLC.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">June 23, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">2.2</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>First Amendment to Merger Agreement and Plan of Reorganization, dated as of August 29, 2008, by and among
clickNsettle.com, Inc., Cardo Medical, LLC and Cardo Acquisition, LLC.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</P>
<P ALIGN="CENTER"></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2.2</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">2.3</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Asset Purchase Agreement, dated September 30, 2009, by and among Cardo Medical, Inc. and Vertebron,
Inc.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">October 6, 2009</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">3.1</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Amended and Restated Certificate of Incorporation</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">3.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">March 18, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">3.2</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Amended and Restated Bylaws. </FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">3.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">February 1, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">5.1#</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Opinion of Akerman Senterfitt</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.1</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Escrow Agreement, dated as of August 29, 2008, by and among Chicago Title Company, clickNsettle.com, Inc.
Andrew A. Brooks, M.D. and Mikhail Kvitnitsky.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.2</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Form of Lockup Agreement.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.2</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.3</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Lockup Agreement, dated August 29, 2008, for Derrick Romine.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.3</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.4</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Amended and Restated 1996 Incentive and Nonqualified Stock Option Plan.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10-KSB</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 28, 1998</FONT></TD>
</TR>
</TABLE>

<P ALIGN="CENTER">                                                68
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<TABLE BORDER=0 CELLSPACING=1 CELLPADDING=1 WIDTH=95%>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.5*</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Form of Cardo Medical, LLC Nonstatutory Option Agreement </FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.5</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.6</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Stock Purchase Agreement, dated as of December 19, 2007, by and among clickNsettle.com, Inc., Frost Gamma
Investments Trust, Dr. Jane Hsiao, Steven D. Rubin and Subbarao Uppaluri.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">December 21, 2007</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.7</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>First Amendment to Stock Purchase Agreement, dated as of January 31, 2008, by and among clickNsettle.com, Inc.,
Frost Gamma Investments Trust, Dr. Jane Hsiao, Steven D. Rubin and Subbarao Uppaluri.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.2</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">February 1, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.8*</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Employment Agreement, dated as of January 31, 2005, by and between Accelerated Innovation, LLC, as successor
to Accin Corporation, and Mikhail Kvitnitsky.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.8</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.9*</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Amendment to Employment Agreement, dated as of June 6, 2008, by and between Accelerated Innovation, LLC and
Mikhail Kvitnitsky.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.9</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.10*</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Termination Agreement, effective as of June 23, 2008, by and between Accelerated Innovation, LLC and Mikhail
Kvitnitsky.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.10</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.11*</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Employment Offer Letter with Derrick Romine dated September 5, 2008.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.11</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.12</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Form of Indemnification Agreement for officers and directors.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.12</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.13+</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Agreement, dated as of August 22, 2006, by and between Accelerated Innovation, LLC, as successor to Accin
Corporation, and Infinesse Corporation.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.13</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.14</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Supplier Agreement, dated June 16, 2006, between Stelkast Company and Accelerated Innovation, LLC, as
successor to Accin.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.14</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.15+</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Contracted Services Agreement, dated September 1, 2007, by and between Accelerated Innovation, LLC and Summit
Corporate Services, Inc.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.15</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.16</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Agreement dated April 30, 2008, by and among Mikhail Kvitnitsky and Accelerated Innovation, LLC, Cervical Xpand,
LLC and Uni-Knee, LLC.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.16</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.17</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Agreement dated April 30, 2008, by and among John D. Kuczynski, Accelerated Innovation, LLC and Uni-Knee,
LLC.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.17</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.18</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Agreement dated April 30, 2008, by and among Richard H. Rothman, M.D., Ph.D., Accelerated Innovation, LLC and
Cervical Xpand, LLC.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.18</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.19</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Agreement dated April 30, 2008, by and among Todd J. Albert, M.D., Accelerated Innovation, LLC and Cervical
Xpand, LLC.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.19</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
</TABLE>

<P ALIGN="CENTER">                                                69
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<TABLE BORDER=0 CELLSPACING=1 CELLPADDING=1 WIDTH=95%>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.20</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Agreement dated April 28, 2008, by and among, Rafail Zubok, Accelerated Innovation, LLC and Cervical Xpand,
LLC.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.20</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.21*</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Nonstatutory Option Agreement, dated August 27, 2008, by and between Cardo Medical, LLC and Derrick
Romine.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10-Q</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">November 14, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.22</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Form of Registration Rights Agreement, dated October 27, 2009, by and among Cardo Medical, Inc. and the Several
Purchasers.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">October 29, 2009</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">21.1</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Subsidiaries of clickNsettle.com, Inc.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">21.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">23.1#</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Consent of Stonefield Josephson, Inc. </FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">23.2#</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Consent of Akerman Senterfitt (included in Exhibit 5.1)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
</TR>
</TABLE>

<FONT SIZE=2></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638 DIR="LTR">
<TR><TD WIDTH="6%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="CENTER">#</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="89%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Filed herewith.</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="CENTER">*</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="89%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Management compensation plan or agreement.</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">+</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="89%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Confidential Treatment has been requested as to a portion of this exhibit.  The confidential portion of this exhibit has
been omitted and filed separately with the Securities and Exchange Commission.</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2>
<B><P>ITEM 17 - UNDERTAKINGS</P>
<P ALIGN="CENTER">UNDERTAKINGS</P><DIR>

</B><P>(a) The undersigned registrant hereby undertakes:</P>
<P>(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration
statement:</P>
<DIR>

<P>(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;</P>
<P>(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the
registration statement.  Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the
&quot;Calculation of Registration Fee&quot; table in the effective registration statement;</P>
<P>(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;</P>
</DIR>

<P>(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be
deemed to be the initial <I>bona fide</I> offering thereof.</P>

</DIR>

<P ALIGN="CENTER">                                                70
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<DIR>

<P>(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at
the termination of the offering.</P>
<P>(4) For determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that
was made in the registration statement or prospectus that was part of the registration statement or made in any such document
immediately prior to such date of first use.</P>
<P>(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities:</P>
<P>The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such purchaser:</P><DIR>

<P>(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule
424;</P>
<P>(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by
the undersigned registrant;</P>
<P>(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the undersigned registrant; and</P>
<P>(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.</P>

</DIR>
</DIR>

<P ALIGN="CENTER">                                                           71
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<B><p align="center"><A NAME="#_Toc248297533">
                                                   CARDO MEDICAL, INC.</A> <BR>
                                    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS </P></B>


<P> Documents for the fiscal year ended December 31, 2008, extracted from our annual report on Form 10-K filed with the
Securities and Exchange Commission on March 31, 2009:

<DIR>


<P>Report of Independent Registered Accounting Firm for the years ended December&nbsp;31, 2008 and 2007</P>
<P>Financial Statements</P>
<P>Consolidated Balance Sheets at December&nbsp;31, 2008 and 2007</P>
<P>Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2008 and 2007</P>
<P>Consolidated Statements of Shareholders' Equity (Deficiency) for the years ended December&nbsp;31, 2008 and 2007&nbsp;</P>
<P>Consolidated Statements of Cash Flows for the years ended December&nbsp;31, 2008 and 2007</P>
<P>Notes to Consolidated Financial Statements&nbsp;</P>

</DIR>

<P> Unaudited Financial Statements for the Nine Months Ended September 30, 2009, extracted from our quarterly report on
Form 10-Q filed with the Securities and Exchange Commission on November 12, 2009:

<DIR>

<P>Financial Statements</P>

<FONT SIZE=2><P>Condensed Consolidated Balance Sheets at September 30, 2009 (Unaudited) and December&nbsp;31, 2008</P>
<P>Condensed Consolidated Statement of Operations (Unaudited) - Three and Nine Months Ended September 30, 2009 and 2008</P>
<P>Condensed Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 30, 2009 and 2008</P>
<P>Notes to Condensed Consolidated Financial Statements (Unaudited)</P>


</DIR>

<P ALIGN="JUSTIFY">  </P>
<P ALIGN="JUSTIFY">  </P>
<P ALIGN="JUSTIFY">  </P>


<P ALIGN="CENTER">                                                           F-1
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>


<B><FONT SIZE=2><P ALIGN="JUSTIFY">Report of Independent Registered Public Accounting Firm </P>
</B>
<P>Board of Directors <BR>
Cardo Medical, Inc. <BR>
Beverly Hills, CA  </P>

<P ALIGN="JUSTIFY">We have audited the accompanying consolidated balance sheets of Cardo Medical, Inc. (the &quot;Company&quot;) as of
December 31, 2008 and 2007 and the related consolidated statements of operations, stockholders' equity, and cash flows for the year ended December
31, 2008 and April 6, 2007, inception, through December 31, 2007. These financial statements are the responsibility of the management of Cardo Medical,
Inc. Our responsibility is to express an opinion on these financial statements based on our audits. </P>

<P ALIGN="JUSTIFY">We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required at this time to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly,
we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion. </P>

<P ALIGN="JUSTIFY">In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position
of Cardo Medical, Inc. as of December 31, 2008 and 2007 and the results of their operations and their cash flows for the year ended December 31, 2008
and April 6, 2007, inception, through December 31, 2007 in conformity with United States generally accepted accounting principles. </P>

<P ALIGN="JUSTIFY">The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going
concern. As discussed in Note 1 to the consolidated financial statements, the Company has losses from operations, negative cash flows from operations,
an accumulated stockholders' deficit and limited cash to fund future operations. These matters, among others, raise a substantial doubt about the
Company's ability to continue as a going concern. Management's plans concerning these matters are also described in Note 1. These financial statements
do not included any adjustments relating to the recoverability and classification of recorded assets, or amounts and classification of liabilities that might be
necessary in the event the Company cannot continue in existence.</P>


<P>/s/  Stonefield Josephson, Inc.</P>

<P>Stonefield Josephson, Inc.<BR>
Los Angeles, California <BR>
March 31, 2009</P>

<P ALIGN="CENTER">                                                           F-2
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<B>
<P ALIGN="CENTER">CARDO MEDICAL, Inc.<BR>
                   CONSOLIDATED BALANCE SHEETS<BR>
                   (in thousands, except share amounts) </P> </B>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="85%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
December 31, </B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
December 31, </B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2008</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2007</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR ALIGN="center" VALIGN="bottom">
<TD BGCOLOR=#FFFFFF COLSPAN=8><FONT FACE="Times New Roman" SIZE=-1><B>
ASSETS</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Current assets:</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               3,095&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  904&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  186&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  208&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Inventories</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  942&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  437&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other current assets</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  107&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  107&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp;       Total current assets</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               4,330&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               1,656&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:#,##0"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Property and equipment, net&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  716&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  387&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Goodwill</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               1,233&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                       -&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Other intangible assets, net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               5,003&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                       -&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Other assets, net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  192&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  112&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp;       Total assets</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             11,474&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               2,155&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:#,##0"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR ALIGN="center" VALIGN="bottom">
<TD BGCOLOR=#FFFFFF COLSPAN=8><FONT FACE="Times New Roman" SIZE=-1><B>
LIABILITIES AND STOCKHOLDERS' EQUITY </B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:#,##0"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Current liabilities:</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:#,##0"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Accounts payable and accrued expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  777&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  233&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp;       Total liabilities</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  777&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  233&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Non-controlling interest</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                       -&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  634&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Stockholders' equity</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Common stock, $0.001 par value, 750,000,000 million shares<BR>
 &nbsp;&nbsp;&nbsp;&nbsp; authorized, 203,360,271 and 133,440,954 issued and outstanding as<BR>
 &nbsp;&nbsp;&nbsp;&nbsp; of December 31, 2008 and December 31, 2007, respectively</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  203&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  133&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Additional paid-in capital</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             16,631&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               1,442&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Note receivable from stockholder</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  (50)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                       -&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Accumulated deficit</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             (6,087)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                (287)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp;       Total stockholders' equity</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             10,697&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               1,288&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp;       Total liabilities, non-controlling interest and stockholders' equity&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             11,474&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               2,155&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR ALIGN="center" VALIGN="bottom">
<TD BGCOLOR=#FFFFFF COLSPAN=8><FONT FACE="Times New Roman" SIZE=-1>
See accompanying notes, which are an integral part of these consolidated financial statements</FONT></TD>
</TR>
</Table>

<P ALIGN="CENTER">                                                           F-3
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<B>
<P ALIGN="CENTER">CARDO MEDICAL, Inc.<BR>
CONSOLIDATED STATEMENTS OF OPERATIONS  <BR>
                   (in thousands, except share amounts)</P> </B>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="85%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:d-mmm-yy"><FONT FACE="Times New Roman" SIZE=-1><B>
April 6, 2007,</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:d-mmm-yy"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:0"><FONT FACE="Times New Roman" SIZE=-1><B>
Inception,</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:0"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Year Ended</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:0"><FONT FACE="Times New Roman" SIZE=-1><B>
Through</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:0"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
December 31, </B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
December 31, </B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2008</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2007</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  1,268&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  643&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Cost of sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     197&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    69&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;     Gross profit</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  1,071&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  574&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Research and development expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  1,332&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  215&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Selling, general and administrative expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  3,914&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  671&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Impairment charges</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  1,457&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                      -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;     Loss from operations</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 (5,632)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                (312)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Interest income (expense), net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                      (20)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    33&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Loss before non-controlling interest</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 (5,652)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                (279)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Non-controlling interest in loss (earnings) of subsidiaries</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    (148)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    (8)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Loss before tax provision</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 (5,800)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                (287)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Provision for income taxes</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                          -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                      -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net loss</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 (5,800)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                (287)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net loss available to common shareholders per share:</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Basic and Diluted</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                   (0.03)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               (0.00)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Weighted average shares outstanding:</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Basic and Diluted</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
       168,762,052&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
    133,440,954&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR ALIGN="center" VALIGN="bottom">
<TD BGCOLOR=#FFFFFF COLSPAN=8><FONT FACE="Times New Roman" SIZE=-1>
See accompanying notes, which are an integral part of these consolidated financial statements</FONT></TD>
</TR>
</Table>

<P ALIGN="CENTER">                                                           F-4
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<B>
<P ALIGN="CENTER">CARDO MEDICAL, Inc. <A NAME="AdvancedCellTechnologyInc_AndSubs_033200"></A><BR>
                        CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND <BR>
                        NON-CONTROLLING INTEREST<BR>
                        FOR THE PERIOD APRIL 6, 2007, INCEPTION, THROUGH <BR>
                        DECEMBER 31, 2007, AND FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008 </P>

<P ALIGN="CENTER">(in thousands, except share amounts)</P></B>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD COLSPAN=3 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Common Stock</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Additional     <BR>
Paid-in</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
 Note Receivable </B></FONT></TD>
<TD ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Accumulated</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Non-controlling</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
 Total Stockholders'    <BR>
 Equity and  </B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Shares </B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Amount</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Capital</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
 From Stockholder </B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Deficit</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Interest</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
 Non-controlling Interest  </B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Balance at April 6, 2007, inception</B></FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                          -  &nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp; $</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                  -  &nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp; $</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              -  &nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp; $</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                           -  &nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp; $</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 -  &nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp; $</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                       -  &nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp; $</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                                             -  &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
Capital contribution</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          133,440,954&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               133&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
         4,867&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                                       5,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
Contribution of net assets of Accin</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
            325&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                     626&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                                          951&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
Distribution to Accin Corporation shareholders</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       (3,750)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                                      (3,750)</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
Net loss</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             (287)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                         8&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                                         (279)
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Balance at December 31, 2007</B></FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          133,440,954&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               133&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
         1,442&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                           -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             (287)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                     634&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                                       1,922&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
Capital contribution</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
            58,641,744&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 59&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
       12,915&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                       (900)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                                     12,074&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
Reverse merger transaction</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
            11,277,573&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 11&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
         2,231&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                                       2,242&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
Collection of note receivable</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                         850&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                                          850&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
Acquisition of non-controlling interest of Uni</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                     (15)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                                           (15)</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
Acquisition of non-controlling interest of Cervical</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                       20&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                                            20&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
Acquisition of non-controlling interest of Accelerated</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                   (787)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                                         (787)</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
Stock option compensation</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              43&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                                            43&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
Net loss</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          (5,800)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                     148&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                                      (5,652)
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000><B>
Balance at December 31, 2008</B></FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
          203,360,271&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp; $</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               203&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp; $</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
       16,631&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp; $</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                         (50)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp; $</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
          (6,087)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp; $</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                       -  &nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp; $</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                                     10,697&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR ALIGN="center" VALIGN="bottom">
<TD COLSPAN=14><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
See accompanying notes, which are an integral part of these consolidate financial statements</FONT></TD>
</TR>
</Table>


<P ALIGN="CENTER">                                                           F-5
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>


<B>
<P ALIGN="CENTER">CARDO MEDICAL, Inc. <BR>
CONSOLIDATED STATEMENTS OF CASH FLOWS  <BR>
                   (in thousands, except share amounts)</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="85%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:d-mmm-yy"><FONT FACE="Times New Roman" SIZE=-1><B>
April 6, 2007,</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:0"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:0"><FONT FACE="Times New Roman" SIZE=-1><B>
Fiscal Year</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:0"><FONT FACE="Times New Roman" SIZE=-1><B>
Inception,</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:0"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:0"><FONT FACE="Times New Roman" SIZE=-1><B>
Ended</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:0"><FONT FACE="Times New Roman" SIZE=-1><B>
Through</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
December 31,</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
December 31, </B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2008</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2007</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Operating activities:</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net loss</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            (5,800)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 (287)</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Adjustments to reconcile net loss to net cash&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    used in operating activities:</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Depreciation&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 185&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    48&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Amortization&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 376&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    13&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Impairment charges</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
              1,457&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Non-controlling interest in earnings (loss) of subsidiaries</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 148&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                      8&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Stock option compensation</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                   43&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Acquisition of in-process research and development</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 938&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Effect of changes in:</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Accounts receivable</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                   22&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 (180)</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Inventories</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               (505)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 (241)</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Prepaid expenses and other current assets</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     9&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                   (84)</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Accounts payable and accrued expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 431&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  142&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp;       Net cash used in operating activities</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            (2,696)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 (581)
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Investing activities:</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Purchase of property and equipment</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               (515)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 (251)</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Cash acquired from Accin transaction&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    -  &nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  611&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Proceeds from reverse merger transaction with Clicknsettle.com, Inc.&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
              2,245&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Payments made to acquire minority interest of subsidiaries</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            (3,487)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Increase in other assets</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 (79)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 (125)
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp;       Net cash provided by (used in) investing activities</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            (1,836)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  235&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Financing activities:</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Capital contribution</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            12,924&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               5,000&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Distribution to Accin Corporation shareholders</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            (6,201)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
              (3,750)</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Proceeds from notes payable</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
              1,200&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Payments of notes payable</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            (1,200)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp;       Net cash provided by financing activities</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
              6,723&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               1,250&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net increase (decrease) in cash</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
              2,191&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  904&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Cash, beginning of period</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 904&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Cash, end of period</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
              3,095&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  904&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><I>
Supplemental disclosure of cash flow information:</I></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Interest paid</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                   48&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Income taxes paid</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                      -&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><I>
Supplemental disclosure of non-cash investing and financing activities:</I></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;    Capital contributions through note receivable from members</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                   50&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                       -&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR ALIGN="center" VALIGN="bottom">
<TD BGCOLOR=#FFFFFF COLSPAN=10><FONT FACE="Times New Roman" SIZE=-1>
See accompanying notes, which are an integral part of these consolidated financial statements</FONT></TD>
</TR>
</Table>


<P ALIGN="CENTER">                                                           F-6
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<B>
<P ALIGN="CENTER">CARDO MEDICAL, Inc. <BR>
                        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  <BR>
                        (in thousands, except share amounts)</P>



<P ALIGN="JUSTIFY">1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</P>

<I><P ALIGN="JUSTIFY">Description of Business </P>
</B></I><P ALIGN="JUSTIFY">Cardo Medical, Inc. ("Cardo" or the "Company") is an early-stage orthopedic medical device company specializing in
designing, developing and marketing reconstructive joint devices and spinal surgical devices. Reconstructive joint devices are used to replace knee, hip
and other joints that have deteriorated through disease or injury. Spinal surgical devices involve products to stabilize the spine for fusion and reconstructive
procedures. Within these areas, Cardo intends to focus on the higher-growth sectors of the orthopedic industry, such as advanced minimally invasive
instrumentation and bone-conserving high-performance implants. Cardo is focused on developing surgical devices that will enable surgeons to bridge the
gap between soft tissue-driven sports medicine techniques and classical reconstructive surgical procedures. </P>
<B><I><P ALIGN="JUSTIFY">Basis of Presentation</P>
</B></I><P ALIGN="JUSTIFY">The accompanying consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America.</P>
<B><I><P ALIGN="JUSTIFY">Principles of Consolidation</P>
</B></I><P ALIGN="JUSTIFY">The consolidated financial statements include the accounts of Cardo, Accelerated Innovation, Inc.
(&quot;Accelerated&quot;), Uni-Knee LLC (&quot;Uni&quot;) and Cervical Xpand LLC (&quot;Cervical&quot;). All significant intercompany transactions
have been eliminated in consolidation.  The non-controlling and minority interests in these companies is represented by a single balance in the
consolidated balance sheets. As of December 31, 2007, the total non-controlling interest balance of $634 was comprised of $77 for minority interest in Uni,
($43) in Cervical and $600 in Accelerated.  As of December 31, 2008, the non-controlling interest balance amounted to $0, as the Company by then had
acquired the minority interests in Uni and Cervical and the non-controlling interest in Accelerated (see Note 8).</P>

<P ALIGN="JUSTIFY">For the period from August 29, 2008 to December 31, 2008, the consolidated financial statements also include the accounts of
clickNsettle.com, Inc. (&quot;CKST&quot;), with whom the company completed a reverse takeover on that date (see Note 8).</P>

<B><I><P ALIGN="JUSTIFY">Management's Plan</P>
</B></I><P ALIGN="JUSTIFY">As reflected in the accompanying financial statements, the Company has losses from operations and negative cash flows from
operations.  These matters raise substantial doubt about the Company's ability to continue as a going
concern.  As more fully described in Note 9, the Company has been able to raise money in the form of a private placement of its securities.
Notwithstanding success in raising this type of financing, there continues to be substantial doubt about the Company's ability to continue as a going
concern.</P>
<P ALIGN="JUSTIFY">In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown
in the accompanying balance sheet is dependent upon continued operations of the Company, which, in turn, is dependent upon the Company's ability to
continue to raise capital and ultimately generate positive cash flows from operations. The financial statements do not include any adjustments relating to
the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be
unable to continue its existence.</P>

<P ALIGN="JUSTIFY">Management's plan regarding these matters includes raising additional funds in the form of a private placement of its
securities during the second quarter of 2009.   </P>

<P ALIGN="CENTER">                                                           F-7
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<B><I><P ALIGN="JUSTIFY">Use of Estimates</P></B></I>
<P ALIGN="JUSTIFY">Financial statements prepared in accordance with accounting principles generally accepted in the United States require
management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.  Among other things, management makes estimates relating to allowances for
doubtful accounts, excess and obsolete inventory items, the estimated depreciable lives of property and equipment,
the impairment of goodwill and other intangible assets, share-based payment, deferred tax assets and the allocation of the
purchase price paid for the minority interests in Uni, Cervical and Accelerated.  Actual results could differ from those estimates.</P>

<B><I><P ALIGN="JUSTIFY">Cash and Cash Equivalents</P>
</B></I><P ALIGN="JUSTIFY">Cash equivalents are comprised of certain highly liquid investments with maturities of three months or less when
purchased.  The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits.  At December 31, 2008 and
2007, the Company's deposits in excess of the federally insured limit were $2,700 and $600, respectively. The Company has not experienced any losses
related to this concentration of risk.</P>
<B><I><P ALIGN="JUSTIFY">Accounts Receivable</P>
</B></I><P ALIGN="JUSTIFY">The Company periodically assesses its accounts receivable for collectability on a specific identification basis.  If
collectability of an account becomes unlikely, an allowance is recorded for that doubtful account.  Once collection efforts have been exhausted, the account
receivable is written off against the allowance.  The Company does not require collateral for trade accounts receivable and has not experienced any
write-offs.  Management believes that all accounts receivable as of December 31, 2008 and 2007 are collectable.  </P>

<B><I><P ALIGN="JUSTIFY">Inventory</P>
</B></I><P ALIGN="JUSTIFY">Inventory is stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis; and the
inventory is comprised of work in process and finished goods.  Work in process consists of fabrication costs paid relating to items currently in production.
Finished goods are completed knee, spine and hip replacement products ready for sales to customers. At each balance sheet date, the Company
evaluates its ending inventories for excess quantities and obsolescence.  This evaluation includes an analysis of sales levels by product type.  Among
other factors, the Company considers current product configurations, historical and forecasted demand, market conditions and product life cycles when
determining the net realizable value of the inventory.  Provisions are made to reduce excess or obsolete inventories to their estimated net realizable
values.  Once established, write-downs are considered permanent adjustments to the cost basis of the excess or obsolete inventory.  The Company did
not have any inventory considered by management to be excess or obsolete as of December 31, 2008 or in 2007.    </P>
<B><I><P ALIGN="JUSTIFY">Property and Equipment</P>
</B></I><P ALIGN="JUSTIFY">Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful
lives, which range from three to five years. When items are retired or disposed of, income is charged or credited for the difference between the net book
value of the asset and the proceeds realized thereon. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and
betterments are capitalized. </P>
<B><I><P ALIGN="JUSTIFY">Intangible and Long-Lived Assets</P>
</B></I><P ALIGN="JUSTIFY">In accordance with Statement of Financial Accounting Standards (&quot;SFAS&quot;) No. 144, &quot;Accounting for the
Impairment or Disposal of Long-Lived Assets,&quot; the Company evaluates long-lived assets for impairment whenever events or changes in
circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the
projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective
carrying amount.  Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or
discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Company's management currently
believes there is no impairment of its long-lived assets. There can be no assurance, however, that market conditions will not change or demand for the
Company's products will continue. Either of these could result in future impairment of long-lived assets.</P>

<P ALIGN="CENTER">                                                           F-8
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<B><I><P ALIGN="JUSTIFY">Other Assets</P></B></I>

<FONT SIZE=2><P ALIGN="JUSTIFY">In September 2007, the Company entered into an agreement with a manufacturer to market
and distribute their uni-polar and mono-polar hip products.  As part of this agreement, the manufacturer granted non-exclusive licenses
to the Company to use certain information and improvements so that the Company may obtain regulatory approval for the products that
are the subject of the agreements, and in connection with the Company's commercialization of those products.  The total costs
capitalized as of December 31, 2008 and December 31, 2007 amounted to $255 and $125, respectively.  The amounts are being
amortized using the straight-line method over a period of five years, which represents the contractual life of the agreement.
Amortization of the license fees were $50 for the fiscal year ended December 31, 2008. In 2007 amortization commenced in September
2007 and amounted to $13 for the period of inception through December 31, 2007. Future amortization of the license fee will be $50 for
each of the years ended December 31, 2009 through 2011 and $42 for the year ended December 31, 2012.  </P>

<B><I><P ALIGN="JUSTIFY">Goodwill and Other Intangible Assets</P>
</B></I><P ALIGN="JUSTIFY">In accordance with SFAS No. 142, &quot;Goodwill and Intangible Assets,&quot; goodwill is assessed
for impairment annually at our year end or more frequently if circumstances indicate impairment. The Company recognized $1,457 of
impairment charges for the year ended December 31, 2008. There is no projected revenue for the internally-developed spine product
reporting unit. Accordingly, the Company performed a valuation of the goodwill related to that reporting unit. We used
the discounted cash flow method by which it was determined
that the goodwill no longer had any value. So at December 31, 2008 the entire goodwill related to Cervical has been written off.</P>

<B><I><P ALIGN="JUSTIFY">Fair Value of Financial Instruments</P>
</B></I><P ALIGN="JUSTIFY">For certain financial instruments, including accounts receivable, accounts payable and accrued expenses, the carrying
amounts approximate fair value due to their relatively short maturities. For the note payable, the carrying amount approximates its fair value due to its short
maturity and interest rate commensurate with the interest rate the Company could get in the open market.</P>

<B><I><P ALIGN="JUSTIFY">Share-Based Payment</P></B></I>

<P ALIGN="JUSTIFY">The fair value of each stock option is estimated on the date of grant using the Black-Scholes option pricing model.
Assumptions relative to volatility and anticipated forfeitures are determined at the time of grant with the following weighted average assumptions.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="55%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Fiscal Year</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Ended</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
December 31,</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2008</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Expected life in years&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="center" STYLE="vnd.ms-excel.numberformat:0.0"><FONT FACE="Times New Roman" SIZE=-1>
7.5</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Stock price volatility&nbsp;</FONT></TD>
<TD ALIGN="center" STYLE="vnd.ms-excel.numberformat:0.0%"><FONT FACE="Times New Roman" SIZE=-1>
46.7%</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Risk free interest rate&nbsp;</FONT></TD>
<TD ALIGN="center" STYLE="vnd.ms-excel.numberformat:0.0%"><FONT FACE="Times New Roman" SIZE=-1>
3.5%</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Expected dividends</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
None&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Forfeiture rate</FONT></TD>
<TD ALIGN="center" STYLE="vnd.ms-excel.numberformat:0.0%"><FONT FACE="Times New Roman" SIZE=-1>
7.5%</FONT></TD>
</TR>
</Table>

<P ALIGN="JUSTIFY">The assumptions used in the Black-Scholes models referred to above are based upon the following data: (1)&nbsp;The expected
life of the option is estimated by considering the contractual term of the option, the vesting period of the option, the employees' expected exercise behavior
and the post-vesting employee turnover rate. (2)&nbsp;The expected stock price volatility of the underlying shares over the expected term of the option is
based upon
the Dow Jones index of small cap medical device companies as well as an index of similarly situated public companies.
(3) The risk free interest rate is based on published U.S. Treasury Department interest rates for the expected terms
of the underlying options. (4) Expected dividends are based on historical dividend data and expected future dividend activity. (5) The expected forfeiture
rate is based on historical forfeiture activity and assumptions regarding future forfeitures based on the composition of current grantees.</P>

<P ALIGN="CENTER">                                                           F-9
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<B><I><P ALIGN="JUSTIFY">Revenue Recognition</P>
</B></I><P ALIGN="JUSTIFY">The Company recognizes revenues when there is persuasive evidence of an arrangement, product delivery and
acceptance have occurred, the sales price is fixed and determinable, and collectability of the resulting receivable is reasonably assured.</P>
<P ALIGN="JUSTIFY">The Company records revenues when title and the risk of loss pass to the customer.  Generally, these conditions occur on the date
that the surgery takes place at the hospital.  </P>
<B><I><P ALIGN="JUSTIFY">Shipping and Handling Costs</P>
</B></I><P ALIGN="JUSTIFY">The Company delivers its products to the customers. The related costs are considered necessary to complete the revenue
cycle. Therefore, the Company records these costs as a component of the cost of goods sold. </P>
<B><I><P ALIGN="JUSTIFY">Advertising Costs</P>
</B></I><P ALIGN="JUSTIFY">The Company did not incur any advertising costs during the year ended December 31, 2008 or the period of April 6, 2007,
inception, through December 31, 2007. </P>
<B><I><P ALIGN="JUSTIFY">Research and Development Costs</P>
</B></I><P ALIGN="JUSTIFY">Research and development costs consist of expenditures for the research and development of new product lines and
technology. These costs are primarily payroll and payroll related expenses and various sample parts.  Research and development costs are expensed as
incurred.</P>
<P ALIGN="JUSTIFY">In connection with the acquisition of the minority interest of Accelerated , the Company acquired in-process research and
development costs valued at $938, which are reflected as research and development expenses for the twelve months ended December 31, 2008.  </P>

<B><I><P ALIGN="JUSTIFY">Income Taxes</P>
</B></I><P ALIGN="JUSTIFY">Prior to June 17, 2008, Cardo and its subsidiaries were flow-through entities from an income tax standpoint. Income
generated in these entities was not taxed at the entity level, but rather, the income passed directly through to the owners' individual income tax returns. As
a result, there is no provision for income tax for any period prior to this date.</P>

<P ALIGN="JUSTIFY">On June 17, 2008, Cardo made an election with the Internal Revenue Service to be taxed as a corporation, meaning that any
taxable income generated by Cardo and subsidiaries will be taxed at the Cardo level.</P>
<P ALIGN="JUSTIFY">As a result, on June 17, 2008, the Company adopted the guidelines specified in SFAS No.&nbsp;109, &quot;Accounting for Income
Taxes.&quot; In accordance with SFAS No.&nbsp;109, deferred tax assets and liabilities are recognized to reflect the estimated future tax effects,
calculated at currently effective tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in
the financial statements. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred
tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates on the date of
enactment.</P>
<P ALIGN="JUSTIFY">Also on June 17, 2008, the Company adopted Financial Accounting Standards Board (&quot;FASB&quot;) Interpretation
No.&nbsp;48, Accounting for Uncertainty in Income Taxes-An Interpretation of FASB Statement No.&nbsp;109 (&quot;FIN&nbsp;48&quot;). FIN&nbsp;48
seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. FIN&nbsp;48
prescribes a recognition threshold and measurement requirement for the financial statement recognition of a tax position that has been taken or is
expected to be taken on a tax return and also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods,
disclosure, and transition. Under FIN&nbsp;48 the Company may only recognize or continue to recognize tax positions that meet a &quot;more likely than
not&quot; threshold.</P>
<P ALIGN="JUSTIFY">On August 29, 2008, in connection with the reverse takeover of CKST, Cardo adopted CKST as the taxpaying entity.</P>

<P ALIGN="CENTER">                                                           F-10
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<B><I><P ALIGN="JUSTIFY">Net Loss Per Share</P>
</B></I><P ALIGN="JUSTIFY">The Company uses SFAS No.&nbsp;128, &quot;Earnings Per Share&quot; for calculating the basic and diluted loss per
share. The basic loss per share is calculated by dividing the net loss attributable to common shareholders by the weighted average number of common
shares outstanding. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the potential shares had been issued and if the additional shares were dilutive. Common
equivalent shares are excluded from the computation of net loss per share if their effect is anti-dilutive.</P>

<P ALIGN="JUSTIFY">For the year ended December 31, 2008, 2,398,400 potentially dilutive shares were excluded from the shares used to calculate
diluted earnings per share as their inclusion would reduce net loss per share. There were no potentially dilutive shares excluded for any
period in 2007.</P>

<B><I><P ALIGN="JUSTIFY">Other Comprehensive Income</P>
</B></I><P ALIGN="JUSTIFY">The Company has no other comprehensive income.</P>
<B><I><P ALIGN="JUSTIFY">Concentrations and Other Risks   </P>
</B></I><P ALIGN="JUSTIFY">As of December 31, 2008, the Company had five customers that accounted for 23.1%, 16.4%, 15.4%, 12.1% and 10.5% of
its accounts receivable.  The Company had three customers that comprised 44.3%, 11.9% and 11.3% of the Company's net sales for the year ended
December 31, 2008.  </P>
<P ALIGN="JUSTIFY">As of December 31, 2007, the Company had five customers that accounted for 39.3%, 14.5%, 11.5%, 11.2% and 10.9% of its
accounts receivable.  The Company had three customers that comprised 43.3%, 26.8% and 14.3% of the Company's net sales for the period of April 6,
2007, inception, through December 31, 2007.  </P>
<B><I><P ALIGN="JUSTIFY">Recent Accounting Pronouncements</P>
</B></I><P ALIGN="JUSTIFY">Accounting standards promulgated by the Financial Accounting Standards Board (&quot;FASB&quot;) change periodically.
Changes in such standards may have an impact on the Company's future financial position.  The following are a summary of recent accounting
developments.  </P>
<P ALIGN="JUSTIFY">In May 2008, the FASB issued SFAS No.&nbsp;162, The Hierarchy of Generally Accepted Accounting Principles.  SFAS&nbsp;No,
162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements for
nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. SFAS&nbsp;162 will be
effective 60&nbsp;days following the SEC's approval. The Company does not expect that this statement will result in a change in current practice. </P>
<P ALIGN="JUSTIFY">In March 2008, the&nbsp;FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an
amendment of FASB Statement No. 133.&nbsp; SFAS No. 161 requires enhanced disclosures about a company's derivative and hedging activities. These
enhanced disclosures will discuss (a) how and why a company uses derivative instruments, (b) how derivative instruments and related hedged items are
accounted for under FASB Statement No. 133 and its related interpretations and (c) how derivative instruments and related hedged items affect a
company's financial position, results of operations and cash flows. SFAS No. 161 is effective for fiscal years beginning on or after November 15, 2008, with
earlier adoption allowed. The Company does not anticipate that the adoption of this accounting pronouncement will have a material effect on its financial
statements.</P>
<P ALIGN="JUSTIFY">In September 2006, the FASB issued SFAS No.&nbsp;157, Fair Value Measurements. SFAS No.157 defines fair value, establishes
a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. The provisions of SFAS No. 157
are effective for the Company for fiscal years beginning January 29, 2007.   In February 2008, the FASB issued FASB Staff Position
No. 157-2,&nbsp;Effective Date of FASB Statement No. 157, which delays the&nbsp;effective date of SFAS No. 157 for nonfinancial assets and nonfinancial
liabilities to fiscal years beginning after November 15, 2008.</P>

<P ALIGN="JUSTIFY">In December 18007, the FASB issued SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements &mdash; an
amendment of ARB No. 51. SFAS No. 160 establishes accounting and reporting standards for the non-controlling interest in a subsidiary and
for the deconsolidation of a subsidiary.  SFAS No. 160 clarifies that a non-

<P ALIGN="CENTER">                                                           F-11
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<P ALIGN="JUSTIFY">
controlling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated financial statements and requires retroactive adoption of the presentation and
disclosure requirements for existing minority interests, of which the Company currently has none.&nbsp;&nbsp;All other requirements of SFAS No. 160
shall be applied prospectively.&nbsp;&nbsp;SFAS No. 160 is effective for fiscal years beginning after December 15, 2008. The Company anticipates that
SFAS No. 160 will not have any significant impact on the Company's financial statements. </P>

<P ALIGN="JUSTIFY">In December 18007, the FASB issued SFAS No.&nbsp;141(revised 2007), Business Combinations, which revises current purchase
accounting guidance in SFAS&nbsp;141, Business Combinations. SFAS No.&nbsp;141R requires most assets acquired and liabilities assumed in a
business combination to be measured at their fair values as of the date of acquisition. SFAS No.&nbsp;141R also modifies the initial measurement and
subsequent remeasurement of contingent consideration and acquired contingencies, and requires that acquisition related costs be recognized as expense
as incurred rather than capitalized as part of the cost of the acquisition. SFAS No.&nbsp;141R is effective for fiscal years beginning after
December&nbsp;15, 2008 and is to be applied prospectively to business combinations occurring after adoption. The impact of SFAS No.&nbsp;141R on
the Company's financial statements will depend on the nature and extent of the Company's future acquisition activities.</P>
<P ALIGN="JUSTIFY">In February&nbsp;2007, the FASB issued SFAS No.&nbsp;159, The Fair Value Option of Financial Assets and Financial Liabilities.
SFAS No.&nbsp;159 permits companies to choose to measure certain financial instruments and certain other items at fair value. The standard requires
that unrealized gains and losses on items for which the fair value option has been elected be reported in earnings. SFAS No. 159 is effective as of the
beginning of the entity's first fiscal year that begins after November 15, 2007.  The adoption of SFAS No.&nbsp;159 did not have any significant impact on
the Company's financial statements. </P>
<P ALIGN="JUSTIFY">In September 2006, the FASB issued SFAS No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement
Plans. FAS-158 requires employers to fully recognize the obligations associated with single-employer defined benefit pension, retiree healthcare and other
postretirement plans in their financial statements.  The adoption of SFAS No. 158 did not have any significant impact on the Company's financial
statements. </P>
<P ALIGN="JUSTIFY">In April 2008, the Financial Accounting Standards Board, or FASB issued FASB Staff Position (&quot;FSP&quot;) No. FAS 142-3
&quot;Determination of the Useful Life of Intangible Assets.&quot; This FSP amends the factors that should be considered in developing renewal or
extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, &quot;Goodwill and Other
Intangible Assets.&quot; The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under Statement 142
and the period of expected cash flows used to measure the fair value of the asset under FASB Statement No. 141 (revised 2007), &quot;Business
Combinations&quot; and other U.S. generally accepted accounting principles (GAAP). This FSP is effective for financial statements issued for fiscal years
beginning after December 15, 2008, and interim periods within those fiscal years.  Early adoption is prohibited. The Company will adopt this FSP beginning
January 1, 2009 and it is not believed that this will have an impact on the Company's financial statements.</P>
<P ALIGN="JUSTIFY">In May 2008, the FASB issued FSP No. APB 14-1, &quot;Accounting for Convertible Debt Instruments That May Be Settled in
Cash upon Conversion (Including Partial Cash Settlement).&quot;  FSP APB 14-1 addresses instruments commonly referred to as Instrument C from
Emerging Issues Task Force No.  90-19, which requires the issuer to settle the principal amount in cash and the conversion spread in cash or net shares at
the issuer's option.  FSP APB 14-1 requires that issuers of these instruments account for their liability and equity components separately by bifurcating the
conversion option from the debt instrument, classifying the conversion option in equity, and then accreting the resulting discount on the debt as additional
interest expense over the expected life of the debt. FSP APB 14-1 is effective for fiscal years beginning after December 15, 2008 and interim periods within
those fiscal years, and requires retrospective application to all periods presented. Early application is not permitted. The Company will adopt this FSP
beginning January 1, 2009 and it is not believed that this will have an impact on the Company's financial statements.</P>
<P ALIGN="JUSTIFY">Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of
Certified Public Accountants, and the United States Securities and Exchange Commission did not or are not believed by management to have a material
impact on the Company's present or future financial statements. </P>

<P ALIGN="CENTER">                                                           F-12
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<B><P ALIGN="JUSTIFY">2.  INVENTORY</P>
</B><P ALIGN="JUSTIFY">The Company's inventory consisted of the following as of December 31, 2008 and 2007.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="65%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
(In thousands)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
December 31, </B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
December 31, </B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2008</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:d-mmm-yy"><FONT FACE="Times New Roman" SIZE=-1><B>
2007</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Work in process</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                         161&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                          43&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Finished goods
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                         781&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                        394&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                         942&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                        437&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>



<B>
<P ALIGN="JUSTIFY">3.  PROPERTY AND EQUIPMENT</P>
</B><P ALIGN="JUSTIFY">Property and equipment consisted of the following as of December 31, 2008 and 2007.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="65%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
(In thousands)</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
December 31, </B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
December 31, </B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2008</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:d-mmm-yy"><FONT FACE="Times New Roman" SIZE=-1><B>
2007</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Instrumentation</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                         832&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                        362&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Computer equipment</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                         115&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                          71&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Furniture and fixtures</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                             2&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                            2&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Sub Total</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                         949&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                        435&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Less: accumulated depreciation
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                       (233)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                        (48)
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Total</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                         716&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                        387&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>

<P ALIGN="JUSTIFY">Depreciation expense for the year ended December 31, 2008 amounted to $185.  Depreciation expense for the period from April 6,
2007, inception, through December 31, 2007 amounted to $48. Depreciation expense is included in selling, general and administrative expenses in the
accompanying consolidated statements of operations.    </P>

<B><P>4.  ACCOUNTS PAYABLE AND ACCRUED EXPENSES </P>

</B><P ALIGN="JUSTIFY">Accounts payable and accrued expenses consisted of the following as of December 31, 2008 and 2007.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="65%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
(In thousands)</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
December 31, </B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
December 31, </B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2008</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2007</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Accounts payable</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                        348&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                         233&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Accrued legal expenses</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                        136&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                           -  &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Accrued accounting fees</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                          75&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                           -  &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Accrued payroll</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                          25&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                           -  &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Accrued commissions</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                          34&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                           -  &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Accrued vacation</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                          42&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                           -  &nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Other accrued expenses
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                        117&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                           -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                        777&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                         233&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>


<P ALIGN="CENTER">                                                           F-13
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>


<B><P>5.  INTANGIBLE ASSETS</P>

</B><P ALIGN="JUSTIFY">Intangible assets consisted of the following as of December 31, 2008.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="75%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
(In Thousands)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Accumulated </B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Net Book</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cost &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Amortization</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Value</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Royalty Agreement</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $            2,034&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $                     102&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $            1,933&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Customer Contracts</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  294&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                          73&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  220&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Complete Technology</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               3,000&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                        150&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               2,850&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Total</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $            5,328&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $                     325&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $            5,003&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>

<P ALIGN="JUSTIFY">They royalty agreement and complete technology are being amortized on a straight line basis over a ten year life. The customer
contracts are being amortized over a two year life. The useful lives of these assets are estimated based on their planned use and revenue forecasts for the
products related to each intangible asset. </P>

<P ALIGN="JUSTIFY">Amortization expense related to the intangible assets was $325 in 2008. Future amortization expense for these assets is as
follows.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="50%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
(In thousands)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
 Year Ended </B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
 December 31, </B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; 2009</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $                         650&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; 2010</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                            576&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; 2011</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                            503&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; 2012</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                            503&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; 2013</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                            503&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Thereafter
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                         2,268&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $                      5,003&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>

<B><P ALIGN="JUSTIFY">6.  NOTES PAYABLE </P>
</B><P ALIGN="JUSTIFY">On February 6, 2008, the Company borrowed $1,200 from the trustee of a member (that is a trust) to make a down payment
on the purchase price for the minority interests in Uni and Cervical.  The note accrued interest at 10% per annum and was due in full, along with any
accrued interest, on July 6, 2008.  The note was collateralized by all assets of the Company and is personally guaranteed by the majority member of the
Company. </P>
<P ALIGN="JUSTIFY">In July 2008, the entire principal balance of $1,200 was repaid, along with all accrued interest amounting to $48.  </P>
<P ALIGN="JUSTIFY">&nbsp;<B>7.  ACCIN TRANSACTION</P>
</B><P ALIGN="JUSTIFY">On April 6, 2007, Cardo was organized by a group of investors who made an initial capital contribution amounting to an
aggregate of $5,000.  On May 21, 2007, (1) Cardo contributed $3,750 to Accelerated and (2) Accin, a related party company through a common owner,
contributed all of its net business assets, with a net book value of $867, to Accelerated. In exchange for this contribution, Cardo received 37.5% of the
ownership interests in Accelerated and Accin received the remaining 62.5% of the ownership interests.</P>
<P ALIGN="JUSTIFY">Concurrent with the above transaction, on May 21, 2007, the $3,750 contributed by Cardo was distributed by Accelerated to Accin.
In this transaction, Cardo received a one-year option to purchase the remaining 62.5% of the ownership interests in Accelerated held by Accin for
$6,250,000 (see Note 8).</P>

<P ALIGN="CENTER">                                                           F-14
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<P ALIGN="JUSTIFY">Upon analysis of the Accin contribution, and by applying the precepts found in Emerging Issues Task Force (&quot;EITF&quot;)
Issue No. 98-3, &quot;Determining Whether a Nonmonetary Transaction Involves Receipt of Productive Assets or of a Business,&quot; it was determined
that the net assets constituted a business.  This was based on the inputs, outputs, customer base and processes of the operation.</P>
<P ALIGN="JUSTIFY">Therefore, it was determined that the transaction was a business combination subject to the guidance of SFAS No. 141,
&quot;Business Combinations.&quot; Under that guidance, since Cardo obtained control of the operations despite not having majority ownership, Cardo
was the acquirer for accounting purposes. Accordingly, the transaction was recorded as a purchase, and the accounts of Accelerated were consolidated
with those of Cardo.</P>
<P ALIGN="JUSTIFY">However, since the assets contributed by Accin were in exchange for ownership interests in Accelerated, in accordance with Staff
Accounting Bulletin Topic 5, the assets were recorded on the books of Accelerated at Accin's historical cost basis.</P>

<P ALIGN="JUSTIFY">Following is an unaudited pro forma presentation of Cardo and Accin assuming they were combined at the beginning of 2007.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="85%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Cardo</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
April 6, 2007, </B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Pro Forma</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Inception, </B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Accin</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Combined</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Through</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Five Months </B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Year Ended</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
December 31, </B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
Ended </B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
December 31, </B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
2007</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
May 31, 2007</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
2007</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
(In thousands)</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
(unaudited)</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1><B>
&nbsp;</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    643&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  157&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                   800&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Cost of sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                      69&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                    25&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                     94&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;      Gross profit</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    574&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  132&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                   706&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Research and development expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    215&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                    41&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                   256&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Selling, general and administrative expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    671&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  250&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                   921&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Impairment expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                        -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                     -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                      -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;      Loss from operations</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  (312)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                (159)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  (471)</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Interest income, net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                      33&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                    20&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                     53&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Loss before non-controlling interest</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  (279)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                (139)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  (418)</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Non-controlling interest in loss (earnings) of subsidiaries</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                      (8)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  128&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                   120&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net loss</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  (287)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  (11)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  (298)
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>

<B><P ALIGN="JUSTIFY">8.  ACQUISITION OF NON-CONTROLLING INTERESTS </P>
</B><P ALIGN="JUSTIFY">On February 7, 2008, the Company entered into Membership Interest Purchase Agreements (the &quot;Agreements&quot;)
pursuant to which it agreed to purchase the minority interests in Uni and Cervical subject to certain conditions prior to closing. Together with the execution
of the Agreements, Cardo made deposits to the minority interest holders of Uni and Cervical in the aggregate amount of $1,160.  On June 23, 2008, the
Company paid an additional $2,326 to the minority interest holders of Uni and Cervical to close the acquisition.  As a result, the Company became the
100% owner of all interests in Uni and Cervical.      </P>
<P ALIGN="JUSTIFY">On June 19, 2008, the Company exercised its option to acquire the non-controlling interest in Accelerated for $6,250.  Of this
amount, $6,150 was paid to Accin as of June 30, 2008, and $100 was held for payment of acquisition costs, with any amounts left over due to the minority
interest holders.  </P>

<P ALIGN="CENTER">                                                           F-15
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>


<P ALIGN="JUSTIFY">The Company's acquisition of the Uni, Cervical and Accelerated minority interest have been accounted for using the purchase
accounting method.  The financial statements reflect the allocation of the purchase price to the net assets acquired based on their estimated fair values as
of the acquisition date.  The Company's allocation of purchase price is as follows.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="85%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
(In thousands)</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Uni &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;&nbsp; Cervical &nbsp;&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 Accelerated&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;&nbsp;&nbsp;&nbsp; Total &nbsp;&nbsp;&nbsp;&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Estimated fair value of tangible net assets acquired</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                       15&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                        (19)</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                    786&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                       782&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
In-process research and development</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                        -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                          -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                    938&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                       938&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Other intangible assets</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  2,034&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                          -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                 3,293&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    5,327&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Goodwill&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                        -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    1,457&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 1,233&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    2,690&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Total purchase price</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  2,049&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    1,438&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 6,250&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                    9,737&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>

<P ALIGN="JUSTIFY">The amounts allocated to in-process research and development for Accelerated have been recorded as research and development
expenses in the consolidated statement of operations during the year ended December 31, 2008.  In addition, the goodwill associated with the purchase of
Cervical was deemed to be impaired and consequently written off during the year ended December 31, 2008.   </P>

<B><P ALIGN="JUSTIFY">9.  SHAREHOLDER EQUITY </P>
</B><P ALIGN="JUSTIFY">Our authorized capital consists of 750,000,000 shares of common stock and
50,000,000 shares of preferred stock.  Our preferred stock may be designated into series pursuant to
authority granted by our Certificate of Incorporation, and on approval from our Board of Directors.  As of
December 31, 2008 we did not have any preferred stock issued. </P>

<P ALIGN="JUSTIFY">On June 18, 2008, Cardo entered into a Unit Purchase Agreement with certain
investors, pursuant to which the investors invested $9,500 in Cardo in exchange for units of membership
interests in Cardo.  After the execution of the Unit Purchase Agreement, Cardo completed a private
placement of units of membership interests in Cardo to certain other investors, resulting in an additional
investment of $3,475.  The total capital raised from these sources was $12,974.  </P>

<B><P ALIGN="JUSTIFY">10.  REVERSE MERGER</P>
</B><P ALIGN="JUSTIFY">On August 29, 2008 Cardo completed a reverse takeover of CKST, a publicly traded company. Under the terms of the Merger
Agreement, at the closing of the Merger, each Cardo unit issued and outstanding was converted into and exchanged for the right to receive 667,204.70995
shares of common stock of CKST. All options to buy units of Cardo were also converted into and exchanged for options to purchase shares of CKST at the
same exchange rate as the shares.</P>

<P ALIGN="JUSTIFY">Accordingly, all current and historic share and option quantities in the accompanying financial statements and notes thereto have
been presented at the new higher share count, after conversion.</P>

<P ALIGN="JUSTIFY">As a result of the Merger, CKST's shareholders and option holders own approximately 5.5% of the combined company on a fully
diluted basis (or 11,298,979 shares of common stock outstanding and options); the members of Cardo, excluding the new investors who
participated in the private placement in June 2008 (see Note 9), own approximately 64.5% of the combined company on a fully diluted basis (or
133,440,942 shares of common stock), the new investors own approximately 28.5% of the combined company on a fully diluted basis (or 58,641,701
shares of common stock), and option holders of Cardo have rights to own approximately 1.2% of the combined company on a fully diluted basis (or
2,398,400 shares of common stock underlying those options).</P>


<P ALIGN="CENTER">                                                           F-16
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<B><P ALIGN="JUSTIFY">11. INCOME TAXES</P></B>

<P ALIGN="JUSTIFY">The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for
income taxes were as follows: </P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="55%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Year ended</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
December 31,</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2008</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Statutory federal income tax rate</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1>
34%</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
State taxes, net of federal benefit</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1>
6%</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Other </FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1>
-1%</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Change in valuation allowance
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1>
-39%
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:0%"><FONT FACE="Times New Roman" SIZE=-1>
0%
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>

<P ALIGN="JUSTIFY">Significant components of deferred tax assets and (liabilities) are as follows:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="55%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net operating loss carryforwards</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $          706&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
State Taxes</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (167)</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Goodwill</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             624&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Acquired in-process research and development</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             402&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Depreciation and amortization</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (102)</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Non-qualified stock options</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               21&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Other</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               24&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;   Total, net</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
          1,508&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Valuation allowance</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
        (1,508)
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;   Deferred tax assets, net
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $ &nbsp;&nbsp;&nbsp;&nbsp;   -  &nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>

<P ALIGN="JUSTIFY">The Company files income tax returns in the U.S. Federal and California and New Jersey State jurisdictions. The Company is
subject to U.S. Federal, State and local income tax examinations by tax authorities since becoming a taxpayer in 2008. To date, the Company has not filed
any tax returns as a non-flow through taxpaying entity.</P>

<P ALIGN="JUSTIFY">At December 31, 2008, the Company has Federal and State net operating loss carryforwards available to offset future taxable
income of approximately $1,700 and $1,700 respectively.  These carryforwards will begin to expire in the years ending December 31, 2023 and
December 31, 2018, respectively.  These net operating losses may be subject to various limitations on utilization based on ownership changes in the prior
years under Internal Revenue Code Section 382.</P>

<P ALIGN="JUSTIFY">We periodically evaluate the likelihood of the realization of deferred tax assets, and adjust the carrying amount of the deferred tax
assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. We consider many
factors when assessing the likelihood of future realization of our deferred tax assets, including our recent cumulative earnings experience by taxing
jurisdiction, expectations of future taxable income or loss, the carryforward periods available to us for tax reporting purposes, and other relevant
factors.</P>

<P ALIGN="JUSTIFY">At December 31, 2008, based on the weight of available evidence, including cumulative losses in recent years and expectations of
future taxable income, we determined that it was not more likely than not that our deferred tax assets would be realized and have a $1,508
valuation allowance associated with our net deferred tax assets.</P>

<P ALIGN="CENTER">                                                           F-17
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<P ALIGN="JUSTIFY">As a result of the implementation of FIN 48, the Company performed an analysis of its previous years' tax returns and its current
year tax provision and determined that there were no positions taken that it considered uncertain. Therefore, there were no unrecognized tax benefits as of
December 31, 2008.</P>

<P ALIGN="JUSTIFY">Future changes in any unrecognized tax benefit are not expected to have an impact on the effective tax rate due to the existence of
the valuation allowance.  The Company estimates that the unrecognized tax benefit will not change within the next twelve months.  The Company will
continue to classify income tax penalties and interest, if any, as part of general and administrative expense in its Statements of Operations.  There is no
accrued interest or penalties as of December 31, 2008.  </P>

<P ALIGN="JUSTIFY">The following table summarizes the open tax years for each major jurisdiction:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="55%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Jurisdictions</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Open Years
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Federal</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
2006-2008</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
States</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
2006-2008</FONT></TD>
</TR>
</Table>

<P ALIGN="JUSTIFY">As the Company has significant net operating loss carryforwards, even if certain of the Company's tax positions were disallowed, it
is not foreseen that the Company would have to pay any taxes in the near future. Consequently, the Company does not calculate the impact of interest or
penalties on amounts that might be disallowed.</P>

<B><P>12.  SHARE BASED PAYMENT</P>
</B><P ALIGN="JUSTIFY">On August 29, 2008, the Company issued options to certain employees and Board members to purchase membership units in
Cardo. On the same day, Cardo completed the reverse merger transaction described above (see Note 8), in which the options converted to shares in
clickNsettle.com, Inc.</P>
<P ALIGN="JUSTIFY">In accordance with SFAS No. 123(R), the Company has conducted an analysis of the fair value of the options immediately prior to
the reverse merger, and immediately after the reverse merger and has concluded that there is no change in value as a result of the reverse merger.
Therefore, no additional compensation cost will be recognized related to the reverse merger.</P>
<P ALIGN="JUSTIFY">Furthermore, as described in Note 8 above, all share quantities in these financial statements have been cast to reflect the impact of
the reverse merger. Therefore, the following disclosure uses those figures after the reverse merger.</P>
<P ALIGN="JUSTIFY">The options granted give the grantees the right to purchase up to 2,398,400 shares of its common stock at an exercise price of
$0.23 per share.  The options vest 20% each year over a five year period and expire after ten years.  The weighted average grant date fair value of options
granted was $0.13 per option, for a total fair value of $300, which will be reflected as an operating expense over the vesting period of the options.  </P>
<P ALIGN="JUSTIFY">The total expense recognized for the year ended December 31, 2008 in the accompanying consolidated statements of operations
amounted to $43. </P>

<P ALIGN="CENTER">                                                           F-18
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<P ALIGN="JUSTIFY">A summary of option activity as of December 31, 2008, and changes during the year then ended is presented below.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="85%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Weighted-</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Average </B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Weighted-</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Remaining </B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Average</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Contractual</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Aggregate</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Exercise</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Life</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Intrinsic</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B><U>
&nbsp;</U></B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Options</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Price</B>
<HR NOSHADE SIZE=2 WIDTH=95%>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
(Years)</B>
<HR NOSHADE SIZE=2 WIDTH=95%>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Value</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp; </B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><I>
&nbsp;</I></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><I>
&nbsp;</I></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><I>
&nbsp;</I></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><I>
&nbsp;</I></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Outstanding at December 31, 2007</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                   -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#008000>
                    -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#008000>
&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  -  &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Granted</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
        2,398,400&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               0.23&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                9.67&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            2,926&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Exercised</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                   -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Forfeited</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                   -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Outstanding at December 31, 2008</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
        2,398,400&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               0.23&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                9.67&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            2,926&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#008000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#008000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#008000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Vested and expected to vest</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#008000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#008000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#008000>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;   at December 31, 2008</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
        2,218,520&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               0.23&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                9.67&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            2,707&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Exercisable at December 31, 2008</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               0.23&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                9.67&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  -  &nbsp;</FONT></TD>
</TR>
</Table>

<P ALIGN="JUSTIFY">The aggregate intrinsic value in the table above is before applicable income taxes and is calculated based on the difference
between the exercise price of the options and the quoted price of the common stock as of the reporting date.</P>
<P ALIGN="JUSTIFY">A summary of the status of the Company's unvested options as of December 31, 2008 and changes during the fiscal year then
ended is presented below.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="65%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Weighted</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Average</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Grant Date</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Shares</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Fair value</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Unvested at December 31, 2007</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                   -  &nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Granted</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
        2,398,400&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
0.13</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Vested</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                   -  &nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Forfeited</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                   -  &nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Unvested at December 31, 2008</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
        2,398,400&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
0.13</FONT></TD>
</TR>
</Table>

<P ALIGN="JUSTIFY">As of December 31, 2008, total unrecognized stock-based compensation expense related to unvested stock options was
approximately $257, which is expected to be recognized over a weighted average period of approximately 5 years.  </P>


<P ALIGN="CENTER">                                                           F-19
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<P ALIGN="JUSTIFY">The following table summarizes information about stock options and warrants outstanding and exercisable at December 31,
2008:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="85%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD COLSPAN=8 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
     Options Outstanding</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
  Options Exercisable</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Weighted </B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Weighted </B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Weighted </B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Average</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Average</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Average</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Exercise </B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Number</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Remaining</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Exercise </B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Number</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Exercise </B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Price</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
of Shares</B>
<HR NOSHADE SIZE=2 WIDTH=95%>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Life (Years)</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Price</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
of Shares</B>
<HR NOSHADE SIZE=2 WIDTH=95%>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Price</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $              0.23&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
      2,398,400&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
9.67</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $           0.23&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $                     -  &nbsp;</FONT></TD>
</TR>
</Table>

<B><P>13.  RELATED PARTY TRANSACTIONS</P>
</B><P ALIGN="JUSTIFY">For the period of April 6, 2007, inception, through December 31, 2007, the Company paid $50 to a shareholder for consulting
services provided.  The Company paid $0 to the shareholder for consulting services for the year ended December 31, 2008.</P>
<P ALIGN="JUSTIFY">On May 21, 2007, the Company entered into a transaction in which Cardo received a 37.5% ownership interest in Accelerated and
Accin, a related party company through a common owner, received a 62.5% ownership interest in Accelerated and a $3,750 cash distribution.</P>
<B><P>14.  COMMITMENTS AND CONTINGENCIES</P>
<I><P ALIGN="JUSTIFY">Employee Agreements</P>
</B></I><P ALIGN="JUSTIFY">On February 25, 2008, the Company presented an offer letter to a key employee pursuant to which the employee was to
be granted a 1.25% share of the Company's outstanding membership interests to be issued upon a proposed private placement of securities. The
membership interest was to vest over a five year period commencing one year from the issuance date, with acceleration upon a change in control of the
Company.  The offer letter was not signed by the Company, but was returned to the Company executed by the employee. </P>
<P ALIGN="JUSTIFY">The private placement was consummated on June 18, 2008.  As a result, the Company had a potential commitment to issue the
employee member interests with an estimated fair value of $562,500.  </P>
<P ALIGN="JUSTIFY">On September 5, 2008, the Company and the employee agreed that the February 25, 2008 offer letter was void and of no effect,
and entered into a new letter agreement with the employee granting him options to purchase membership interests in the Company.   </P>

<P ALIGN="JUSTIFY">On May 21, 2007, in connection with the contribution of all the business assets of Accin to Accelerated, the Company took
assignment of an employment agreement with a key employee, who is also a related party. The term of the agreement was from June 1, 2005 through May
30, 2008, with automatic renewal for successive one-year periods, and had a specified salary of $52,000 per year and a severance clause. On June 6,
2008, the employment agreement was amended to remove certain references to the predecessor company and its shareholder agreement. On September
8, 2008, the entire agreement was terminated, effective June 23, 2008.</P>
<B><I><P ALIGN="JUSTIFY">Put Option Derivative</P>
</B></I><P ALIGN="JUSTIFY">On June 18, 2008, the Company entered into a Unit Purchase Agreement and a Merger Agreement. Those agreements
specified that if Cardo did not consummate this merger prior to August 31, 2008, the investors who were party to the Unit Purchase Agreement had the
right ("Put Option") to cause Cardo to repurchase their units for the amount of their original investment, plus the amount of any liability for taxes the
investors (or their equity holders or other beneficial owners) may have incurred based upon Cardo's income.</P>
<P ALIGN="JUSTIFY">That Put Option was initially valued at $284, and it was recorded as a liability on the books of Cardo.</P>

<P ALIGN="CENTER">                                                           F-20
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<P ALIGN="JUSTIFY">On August 29, 2008, Cardo completed the merger pursuant to the terms of the Merger Agreement. As a result, the Put Option was
cancelled and the amount originally recorded as a liability was reclassified to equity.</P>
<B><I><P ALIGN="JUSTIFY">Operating Leases</P>
</B></I><P ALIGN="JUSTIFY">The Company leases its office facilities in Beverly Hills and Van Nuys, California (near Los Angeles) and Clifton, New
Jersey (near New York City) under month to month operating leases.  Total rent expense for the period from April 6, 2007, inception, through December
31, 2007, and the year ended December 31, 2008 amounted to $23 and $74, respectively.      </P>

<B><P>15.  SEGMENT INFORMATION</P></B>

<FONT SIZE=2><P ALIGN="JUSTIFY">Our businesses are currently organized into the following two reportable segments;
reconstructive products (the &quot;Reconstructive Division&quot;) and spine products (the &quot;Spine Division&quot;).  The
Reconstructive Division segment is comprised of activity relating to the Company's unicompartmental knee, patello-femoral products,
the total knee and hip products.  The Spine Division segment is comprised of the spinal lumbar fusion system and cervical plate and
screw systems.    </P>

<P ALIGN="JUSTIFY">The division into these reportable segments is based on the nature of the products offered.  Management
evaluates performance and allocates resources based on several factors, of which the primary financial measure is segment operating
results.  Due to the distinct nature of the products in the Company's Reconstructive Division, and the fact that it has a more developed
market for its products, it is considered by management as a separate segment.  The Company's Spine Division is still in the process of
developing the market and obtaining instrumentation necessary to sell the products in greater quantities.  As a result of the unique
characteristics of this product line, the Spine Division is considered by management as a separate segment.  The accounting policies of
the reportable segments are the same as those described in Note 1.</P>

<P ALIGN="JUSTIFY">As of December 31, 2008, the Company's Reconstructive Division includes $1,233 of goodwill and $5,003 in other intangible
assets relating to the Company's unicompartmental knee product. These amounts are expected to be deductible for income tax purposes. </P>

<P ALIGN="JUSTIFY">The following table sets forth financial information by reportable segment (in thousands).  </P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="95%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Reconstructive</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Spine</B></FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
(In thousands)</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Division</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Division</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Corporate</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Total</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><U>
Year Ended December 31, 2008</U></FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net sales</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                       1,188&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                     80&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                   -  &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
             1,268&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Total cost of sales and operating expenses</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                          692&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                     26&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
             6,330&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
             7,048&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Interest expense, net</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                             -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                     -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                (20)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                (20)
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net income (loss)</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                          496&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                     54&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
           (6,350)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
           (5,800)
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Depreciation and amortization</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                          536&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                       4&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  21&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                561&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Property and equipment acquisitions</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                          468&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                       2&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  45&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                515&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Goodwill</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                          1,233&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  - &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  - &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                          1,233&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Total assets</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                       8,117&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                     65&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
             3,292&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
           11,474&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><U>
Year Ended December 31, 2007</U></FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net sales</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                          643&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                     -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                   -  &nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                643&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Total cost of sales and operating expenses</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                          123&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                     -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                840&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                963&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Interest income, net</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                             -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                     -  &nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  33&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  33&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net income (loss)</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                          520&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                     -  &nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
              (807)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
 $&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
              (287)
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Depreciation and amortization</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                            54&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                     -  &nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                    7&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  61&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Property and equipment acquisitions</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                          168&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                     11&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                  72&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                251&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Total assets</FONT></TD>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                       1,066&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
                                     11&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
             1,078&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" COLOR=#000000 SIZE=-1>
             2,155&nbsp;</FONT></TD>
</TR>
</Table>


<P ALIGN="CENTER">                                                           F-21
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<P ALIGN="JUSTIFY">All of the Company's net sales were attributable to activity in the United States.  There were no long-lived assets held in foreign
countries.  </P>

<B><FONT SIZE=2><P>16. SUBSEQUENT EVENTS</P></B>

<P ALIGN="JUSTIFY">On March 10, 2009, Cardo Medical Inc, entered into a sublease for 2,993 square feet of office space
in Beverly Hills, CA. Monthly rent starts on April 1, 2009.</P>

<P>Future minimum payments for our operating lease are as follows:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="45%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
(In thousands)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
 Year Ended </B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
 December 31, </B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
2009</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $                108&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
2010</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     84&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
 $                192&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>

<P ALIGN="CENTER">                                                           F-22
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<B><P ALIGN="CENTER"><A NAME="bs">
                                    CARDO MEDICAL, INC.<BR>
                                  CONDENSED CONSOLIDATED BALANCE SHEETS<BR>
                           (In thousands, except share amounts)</A></P> </B>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="85%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
September 30, </B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
December 31, </B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2009</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2008</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
(Unaudited)</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
</TR>
<TR ALIGN="center" VALIGN="bottom">
<TD BGCOLOR=#FFFFFF COLSPAN=7><FONT FACE="Times New Roman" SIZE=-1><B>
Assets</B></FONT></TD>
</TR>
<TR ALIGN="center" VALIGN="bottom">
<TD BGCOLOR=#FFFFFF><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Current assets</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Cash</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             1,607&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             3,095&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                251&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                186&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Inventories</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             1,993&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                942&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other current assets</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  71&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                107&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp; Total current assets</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             3,922&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             4,330&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Property and equipment, net&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             1,226&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                716&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Goodwill</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             1,233&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             1,233&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Other intangible assets, net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             4,515&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             5,003&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Deposits and other assets, net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                343&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                192&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp; Total assets</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           11,239&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           11,474&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR ALIGN="center" VALIGN="bottom">
<TD BGCOLOR=#FFFFFF COLSPAN=7><FONT FACE="Times New Roman" SIZE=-1><B>
Liabilities and Stockholders' Equity</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:#,##0"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Current liabilities</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Accounts payable and accrued expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             1,028&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                777&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Stockholders' equity</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Common stock, $0.001 par value, 750,000,000 million shares authorized,&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp;   211,121,018 and 203,360,271 issued and outstanding as of&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp;   September 30, 2009 (unaudited) and December 31, 2008, respectively</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                211&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                203&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Additional paid-in capital</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           19,410&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           16,631&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Common stock issuable</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                495&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Note receivable from stockholder</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                (50)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                (50)</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Accumulated deficit</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (9,855)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (6,087)
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp; Total stockholders' equity</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           10,211&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           10,697&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp; Total liabilities and stockholders' equity&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           11,239&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           11,474&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>



<P ALIGN="CENTER">
                The accompanying notes are an integral part of these condensed consolidated financial statements.

<P ALIGN="CENTER">                                                           F-23
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>



<B><P ALIGN="CENTER"><A NAME="ops">
                                    CARDO MEDICAL, INC.<BR>
                                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS<BR>
                           (In thousands, except share amounts)<BR>
                                           (Unaudited) </A></P> </B>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="85%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=5 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Three Months Ended</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=4 ALIGN="center" STYLE="vnd.ms-excel.numberformat:0"><FONT FACE="Times New Roman" SIZE=-1><B>
Nine Months Ended</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=5 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
September 30, </B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=4 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
September 30, </B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2009</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2008</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2009</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2008</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
(Restated)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
(Restated)</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             436&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             411&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
          1,314&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             932&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Cost of sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               84&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               66&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             254&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             139&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Gross profit</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             352&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             345&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
          1,060&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             793&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Research and development expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             123&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             142&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             329&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
          1,288&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Selling, general and administrative expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
          1,440&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
          1,089&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
          4,521&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
          2,488&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Loss from operations</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
         (1,211)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            (886)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
         (3,790)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
         (2,983)</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Interest income (expense), net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 6&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                 5&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               22&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
              (37)
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Loss before income tax provision</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
         (1,205)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            (881)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
         (3,768)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
         (3,020)</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Provision for income taxes</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net loss</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
         (1,205)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            (881)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
         (3,768)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
         (3,020)</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Less: Net income attributable to non-controlling interest</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            (148)
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net loss attibutable to Cardo Medical, Inc.</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
         (1,205)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            (881)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
         (3,768)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
         (3,168)
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net loss available to common stockholders per share:</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Basic and diluted</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (0.01)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (0.00)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (0.02)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (0.02)
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Weighted average shares outstanding:</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Basic and diluted</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
   206,157,409&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
   196,005,332&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
   204,302,897&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
   157,102,579&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>

<P ALIGN="CENTER">
        The accompanying notes are an integral part of these condensed consolidated financial statements.

<P ALIGN="CENTER">                                                           F-24
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>





<B><P ALIGN="CENTER"><A NAME="flows">
                                    CARDO MEDICAL, INC.<BR>
                                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS<BR>
                                                     (In thousands)<BR>
                                           (Unaudited) </A></P> </B>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="80%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=5 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Nine Months Ended</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=5 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
September 30, </B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2009</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2008</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
(Restated)</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
Cash flows from operating activities</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Net loss</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (3,768)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (3,168)</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Adjustments to reconcile net loss to net cash used in operating activities:</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                878&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                334&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp; In-process research and development expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                938&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp; Stock option compensation</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  89&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  11&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp; Net income attributable to non-controlling interest</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                148&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Changes in operating assets and liabilities:</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                (65)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                (81)</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp; Inventories</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (1,051)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
              (419)</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other current assets</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  36&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  39&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp;  &nbsp;&nbsp;&nbsp;&nbsp; Accounts payable and accrued expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                251&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                585&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net cash used in operating activities</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (3,630)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (1,613)
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
Cash flows from investing activities</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Purchases of property and equipment</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
              (862)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                (99)</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Deposits for Vertebron, Inc. transaction</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
              (130)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Payments made to acquire minority interest of subsidiaries</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (3,487)</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from reverse merger transaction with Clicknsettle.com, Inc.</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             2,245&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Increase in deposits and other assets</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                (59)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
              (143)
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net cash used in investing activities</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (1,051)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (1,484)
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
Cash flows from financing activities</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Capital contributions</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           12,925&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from private placements, net of issuance costs</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             3,193&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from notes payable</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             1,200&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Repayment of notes payable</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (1,200)</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Distributions to Accin shareholders</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (6,150)
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net cash provided by financing activities</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             3,193&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             6,775&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net change in cash</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
           (1,488)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             3,678&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Cash, beginning of period</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             3,095&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                904&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
Cash, end of period</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             1,607&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             4,582&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><I>
Supplemental disclosure of cash flow information:</I></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><I>
&nbsp;</I></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><I>
&nbsp;</I></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Interest paid</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  48&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Income taxes paid</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><I>
Supplemental disclosure of non-cash investing and financing activities:</I></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><I>
&nbsp;</I></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><I>
&nbsp;</I></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
 &nbsp;&nbsp;&nbsp;&nbsp; Capital contributions through note receivable from members</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                     -&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  50&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>


<P ALIGN="CENTER">
                The accompanying notes are an integral part of these condensed consolidated financial statements.


<P ALIGN="CENTER">                                                           F-25
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>


<B><P ALIGN="CENTER"><A NAME="notes">CARDO MEDICAL, INC. </A><BR>
                    Notes to Condensed Consolidated Financial Statements<BR>
                              September 30, 2009<BR>
                                   (Unaudited)</P>
</B><FONT SIZE=2>

<B><FONT SIZE=2><P ALIGN="JUSTIFY">NOTE 1 &mdash; </B> <B>DESCRIPTION OF BUSINESS</P>

</B><P ALIGN="JUSTIFY">Cardo Medical, Inc. (&quot;Cardo&quot; or the &quot;Company&quot;) is an early-stage
orthopedic medical device company specializing in designing, developing and marketing reconstructive joint devices and
spinal surgical devices. Reconstructive joint devices are used to replace knee, hip and other joints that have deteriorated
through disease or injury. Spinal surgical devices involve products to stabilize the spine for fusion and reconstructive
procedures. Within these areas, Cardo intends to focus on the higher-growth sectors of the orthopedic industry, such as
advanced minimally invasive instrumentation and bone-conserving high-performance implants. Cardo is focused on
developing surgical devices that will enable surgeons to bridge the gap between soft tissue-driven sports medicine
techniques and classical reconstructive surgical procedures. </P>

<B><P ALIGN="JUSTIFY">NOTE 2 &mdash; </B> <B>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</P>
</B>
<B><I><P ALIGN="JUSTIFY">Basis of Presentation</P>
</B></I>
<P ALIGN="JUSTIFY">The accompanying condensed consolidated balance sheet as of December 31, 2008, which has
been derived from Cardo's audited financial statements as of that date, and the unaudited condensed consolidated
financial information of Cardo as of September 30, 2009 and for the three and nine months ended September 30, 2009
and 2008, has been prepared in accordance with accounting principles generally accepted in the United States of
America (&quot;U.S. GAAP&quot;) for interim financial information and with the instructions to Form 10-Q and Article
8-03 of Regulation S-X. In the opinion of management, such financial information includes all adjustments (consisting only
of normal recurring adjustments) considered necessary for a fair presentation of the Company's financial position at
such date and the operating results and cash flows for such periods. Operating results for the interim periods ended
September 30, 2009 are not necessarily indicative of the results that may be expected for the entire year.</P>

<P ALIGN="JUSTIFY">Certain information and footnote disclosure normally included in financial statements in
accordance with generally accepted accounting principles have been omitted pursuant to the rules of the United States
Securities and Exchange Commission (&quot;SEC&quot;). These unaudited financial statements should be read in
conjunction with our audited financial statements and accompanying notes included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2008 filed on March 31, 2009.</P>

<B><I><P ALIGN="JUSTIFY">Principles of Consolidation</P>
</B></I>
<P ALIGN="JUSTIFY">The condensed consolidated financial statements include the accounts of Cardo, Accelerated
Innovation, Inc. (&quot;Accelerated&quot;), Uni-Knee LLC (&quot;Uni&quot;) and Cervical Xpand LLC
(&quot;Cervical&quot;). All significant intercompany transactions have been eliminated in consolidation.  The
non-controlling and minority interests in these companies is represented by a single balance in the condensed consolidated
balance sheets. </P>

<B><I><P ALIGN="JUSTIFY">Liquidity and Capital Resources</P>
</B></I>
<P ALIGN="JUSTIFY">At September 30, 2009, we had $1.6 million in cash; however, subsequent to the balance sheet
date, the Company used $1.17 million in order to complete the Vertebron, Inc, transaction (refer to Note 7) and raised
net proceeds of approximately $3.2 million through a private placement (refer to Note 7). With this subsequent net cash
infusion, the available funds are still not projected to meet all of the Company's working capital needs for the next twelve
months. The fact that the Company will sustain losses through the remainder of 2009 and still requires outside sources
of additional capital to supplement operations continues to create an uncertainty about the Company's ability to
continue as a going concern.</P>

<P ALIGN="JUSTIFY">Management intends to use borrowings and securities sales to mitigate the effects of our use of
that cash.  However, Cardo cannot assure you that debt or equity financing, if and when required, will be available.
Cardo's ability to continue as a going concern is dependent upon receiving additional funds either through the issuance of debt or

<P ALIGN="CENTER">                                                           F-26
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<P ALIGN="JUSTIFY">
through common and/or preferred stock and the success of management's plan to expand sales. Although
Cardo may obtain external financing through the sales of its own securities, there can be no assurance that such
financing will be available, or if available, that any such financing would be on terms acceptable to the Company. If
Cardo is unable to fund its cash flow needs, it may have to reduce or stop planned growth or scale back operations and
reduce staff. The condensed consolidated financial statements do not include any adjustments that may result from the
outcome of this uncertainty.</P>
<B><I>
<P ALIGN="JUSTIFY">Net Loss Per Share</P>
</B></I>
<P ALIGN="JUSTIFY">The basic loss per share is calculated by dividing the net loss attributable to common
shareholders by the weighted average number of common shares outstanding. Diluted loss per share is computed
similar to basic loss per share except that the denominator is increased to include the number of additional common
shares that would have been outstanding if the potential shares had been issued and if the additional shares were
dilutive. Common equivalent shares are excluded from the computation of net loss per share if their effect is
anti-dilutive.</P>

<P ALIGN="JUSTIFY">For the three and nine months ended September 30, 2009, 2,358,400 potentially dilutive shares
were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per
share, respectively.</P>

<B><I><P ALIGN="JUSTIFY">Concentrations</P>
</B></I>
<P ALIGN="JUSTIFY">The Company had three customers that accounted for 24%, 21% and 11% of accounts
receivable as of September 30, 2009. At December 31, 2008, the Company had five customers that accounted for 23%,
16%, 15%, 12% and 11% of its accounts receivable. The Company had three customers that accounted for 29%, 25%
and 15% of sales during the nine months ended September 30, 2009. Three customers accounted for 24%, 21% and
15% of sales during the three months ended September 30, 2009. During the nine months ended September 30, 2008,
four customers accounted for 49%, 11%, 11% and 10% of sales. Four customers accounted for 40%, 19%, 12% and
11% of sales during the three months ended September 30, 2008.</P>

<B><I><P ALIGN="JUSTIFY">Reclassifications</P>
</B></I>
<P ALIGN="JUSTIFY">Certain amounts from prior periods have been reclassified to conform to the current period
presentation.</P>

<B><I><P ALIGN="JUSTIFY">Recent Accounting Pronouncements</P>
</B></I>
<P ALIGN="JUSTIFY">In July 2009, the FASB issued ASC 105-10 (Prior authoritative literature: SFAS No. 168, <I>The
FASB Accounting Standards Codification<SUP>TM </SUP>and the Hierarchy of Generally Accepted Accounting
Principles</I>), which will become the single source of authoritative GAAP recognized by the FASB.&nbsp;&nbsp;ASC
105-10 does not change current U.S. GAAP, but on the effective date, the FASB Accounting Standards Codification
(&quot;ASC&quot;)<SUP>TM</SUP> will supersede all then existing non-SEC accounting and reporting
standards.&nbsp;&nbsp;The ASC is effective for interim and annual reporting periods ending after September 15,
2009.&nbsp;&nbsp;Cardo adopted ASC 105-10 during the quarter ended September 30, 2009 and revised its
referencing of GAAP accounting standards in these financial statements to reflect the new standards.</P>

<P ALIGN="JUSTIFY">In May 2009, the FASB issued ASC 855-10 (Prior authoritative literature: SFAS No. 165,
<I>Subsequent Events</I>) which provides guidance on management's assessment of subsequent
events.&nbsp;&nbsp;It is not expected to significantly change practice because its guidance is similar to that in
American Institute of Certified Public Accountants Professional Standards U.S. Auditing Standards Section 560,
<I>Subsequent Events</I>, with some modifications.&nbsp;&nbsp;The Company adopted ASC 855-10 during the
quarter ended June 30, 2009. The adoption of ASC 855-10 did not have a material impact on the Company's results of
operations, financial position or cash flows. </P>

<P ALIGN="JUSTIFY">In April 2009, FASB issued ASC 820-10 (Prior authoritative literature: FSP No. FAS 157-4,
<I>Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That Are Not Orderly</I>). It does not change the definition of fair value as previously
detailed, but provides additional guidance for estimating fair value when the volume and level of activity for the asset or
liability have significantly decreased. Cardo adopted ASC 820-10 during the quarter ended June 30, 2009. The adoption
of ASC 820-10 did not have a material impact on the Company's results of operations, financial position or cash flows.
</P>

<P ALIGN="CENTER">                                                           F-27
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<P ALIGN="JUSTIFY">In April 2009, the FASB issued ASC 320-10 (Prior authoritative literature: FSP No. FAS 115-2
and FAS 124-2, <I>Recognition and Presentation of Other-Than-Temporary Impairments</I>). ASC 320-10 amends the
other-than-temporary impairment guidance in U.S. GAAP for debt securities and provides additional disclosure
requirements for other-than-temporary impairments for debt and equity securities. ASC 320-10 addresses the
determination as to when an investment is considered impaired, whether that impairment is other than temporary, and
the measurement of an impairment loss. Cardo adopted ASC 320-10 during the quarter ended June 30, 2009. The
adoption of ASC 320-10 did not have a material impact on the Company's results of operations, financial position or
cash flows.</P>

<P ALIGN="JUSTIFY">In April 2009, the FASB issued ASC 825-10 (Prior authoritative literature: FSP No. FAS 107-1
and APB 28-1, <I>Interim Disclosures about Fair Value of Financial Instruments</I>). FASB ASC 825-10 requires that
disclosures about the fair value of a company's financial instruments be made whenever summarized financial
information for interim reporting periods is made. Cardo adopted ASC 825-10 during the quarter ended September 30,
2009. The adoption of ASC 825-10 did not have a material impact on the Company's results of operations, financial
position or cash flows. </P>

<P ALIGN="JUSTIFY">In June&nbsp;2009, the FASB issued the following new accounting standards, which remain
authoritative until such time that each is integrated into the Codification:</P>


<UL>
<LI>SFAS&nbsp;No.&nbsp;166, <I>Accounting for Transfers of Financial Assets&nbsp;- an
amendment of FASB Statement No.&nbsp;140</LI>
</I><LI>SFAS No. 167, <I>Amendments to FASB Interpretation No.&nbsp;46(R). </I>SFAS
No.&nbsp;167 amends FASB Interpretation No. (&quot;FIN&quot;) 46, <I>Consolidation of Variable Interest Entities
(revised December 18003) - an interpretation of ARB No.&nbsp;51</LI></UL>

</I>
<P ALIGN="JUSTIFY">SFAS No. 166 seeks to improve the relevance and comparability of the information that a
reporting entity provides in its financial statements about transfers of financial assets; the effects of the transfer on its
financial position, financial performance, and cash flows; and a transferor's continuing involvement, if any, in transferred
financial assets. SFAS&nbsp;No. 166 eliminates the concept of a qualifying special-purpose entity, creates more
stringent conditions for reporting a transfer of a portion of a financial asset as a sale, clarifies other sale-accounting
criteria, and changes the initial measurement of a transferor's interest in transferred financial assets. SFAS
No.&nbsp;166 is effective for interim and annual reporting periods beginning after November&nbsp;15, 2009. The
Company has not completed its evaluation, but does not expect the adoption of SFAS No.&nbsp;166 to have a material
impact on its consolidated financial statements.</P>

<P ALIGN="JUSTIFY">SFAS No. 167 requires an enterprise to determine whether its variable interest or interests give it
a controlling financial interest in a variable interest entity. The primary beneficiary of a variable interest entity is the
enterprise that has both (1)&nbsp;the power to direct the activities of a variable interest entity that most significantly
impact the entity's economic performance, and (2)&nbsp;the obligation to absorb losses of the entity that could
potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially
be significant to the variable interest entity. SFAS No.&nbsp;167 also amends FIN 46(R) to require ongoing
reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. SFAS No.&nbsp;167 is
effective for interim and annual reporting periods beginning after November&nbsp;15, 2009. The Company has not
completed its evaluation, but does not expect the adoption of SFAS No.&nbsp;167 to have a material impact on its
consolidated financial statements.</P>

<B><P ALIGN="JUSTIFY">NOTE 3 &mdash; INVENTORY</P>
</B>
<P ALIGN="JUSTIFY">Inventories consisted of the following at:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="80%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
(In thousands)</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
September 30, </B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
December 31, </B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2009</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
2008</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
(Unaudited)</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center" STYLE="vnd.ms-excel.numberformat:d-mmm-yy"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Work in process</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               649&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               161&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Finished goods
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            1,344&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               781&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
            1,993&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               942&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>


<P ALIGN="CENTER">                                                           F-28
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<B><P ALIGN="JUSTIFY">NOTE 4 &mdash; SHARE BASED PAYMENT</P>
</B>
<P ALIGN="JUSTIFY">On August 29, 2008, the Company issued options to certain employees and Board members to
purchase membership units in Cardo. The options give the grantees the right to purchase up to 2,398,400 shares of the
Company's common stock at an exercise price of $0.23 per share.  The options vest 20% each year over a five-year
period and expire after ten years.  The weighted average grant date fair value of options granted was $0.13 per option,
for a total fair value of $300,000, which will be reflected as an operating expense over the vesting period of the options.
Stock option compensation recognized for the three and nine months ended September 30, 2009 in the accompanying
condensed consolidated statements of operations amounted to $27,105 and $89,562, respectively. Stock option
compensation was $11,103 for the three and nine months ended September 30, 2008.</P>
</FONT><FONT SIZE=1>
</FONT><FONT SIZE=2><P ALIGN="JUSTIFY">The fair value of each option award is estimated on the date of grant
using the Black-Scholes option valuation model that uses the assumptions noted in the following table. Because the
Black-Scholes option valuation model incorporate ranges of assumptions for inputs, those ranges are disclosed. To
estimate volatility of the options over their expected terms, the Company measures the historical volatility of the
components of the small cap sector of the Dow Jones medical equipment index for a period equal to the expected life of
the Cardo options. It also measures the volatility of other public companies with similar size and industry characteristics
to Cardo for the same period. These measurements are averaged and the result is used as expected volatility. As there
is no history of option lives at Cardo, the expected term of options granted is the midpoint between the vesting periods
and the contractual life of the options. The risk-free rate for periods within the contractual life of the option is based on
the U.S. Treasury yield curve in effect at the time of grant. The forfeiture rate is based on an analysis of the nature of the
recipients' jobs and relationships to the Company.</P>

</FONT><FONT SIZE=2><P ALIGN="JUSTIFY">A summary of stock option activity as of September 30, 2009, and
changes during the period then ended is presented below.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="80%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Weighted-</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Weighted-</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Average </B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Arial" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Average</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Remaining </B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Aggregate</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Exercise</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Contractual</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Intrinsic</B></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Options</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Price</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Life (Years)</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Value</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><I>
&nbsp;</I></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><I>
&nbsp;</I></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><I>
&nbsp;</I></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><I>
&nbsp;</I></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><I>
&nbsp;</I></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Outstanding at December 31, 2008</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
   2,398,400&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
          0.23&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0.00_)[semicolon]_($* (#,##0.00)[semicolon]_($* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#008000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#008000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_($* #,##0_)[semicolon]_($* (#,##0)[semicolon]_($* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Granted</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             -  &nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Exercised</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
                  -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
             -  &nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Forfeited</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
      (40,000)
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
          0.23&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Outstanding at September 30, 2009 (unaudited)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
   2,358,400&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
          0.23&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               8.92&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
   1,721,632&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Exercisable at September 30, 2009 (unaudited)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
      471,680&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
          0.23&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0.00_)[semicolon]_(* (#,##0.00)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
               8.92&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
      344,326&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>

</FONT><FONT SIZE=2><P ALIGN="JUSTIFY">The aggregate intrinsic value represents the closing stock price as of
September 30, 2009 less the exercise price, multiplied by the number of options that have an exercise price that is less
than the closing stock price.</P>

<B><P ALIGN="JUSTIFY">NOTE 5 &mdash; STOCKHOLDERS' EQUITY</P>
</B>
<P ALIGN="JUSTIFY">On June 30, 2009, Cardo completed a private placement with investors to purchase 8,689,319
shares (&quot;Purchaser Shares&quot;) of the Company's common stock, par value $0.001 per share at a price of $0.35
per share for aggregate total proceeds of $3,023,013 (net of legal fees of $18,247). The Purchaser Shares have a
24-month lock up provision.</P>
</FONT><FONT SIZE=1>
</FONT><FONT SIZE=2><P ALIGN="JUSTIFY">As of September 30, 2009, the Company had not yet issued a portion
of the Purchaser Shares and has recorded this amount as common stock issuable. The Company subsequently issued
these shares on October 6, 2009.</P>
</FONT><FONT SIZE=1>
</FONT><FONT SIZE=2><P ALIGN="JUSTIFY">During the quarter ended September 30, 2009, the Company received
$170,000 towards a private placement subject to the terms of the June 30, 2009 private placement. The private
placement closed on September 21, 2009 but the common shares were not issued until October 6, 2009. Accordingly,
the $170,000 is included in common stock issuable at the balance sheet date.</P>

<P ALIGN="CENTER">                                                           F-29
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<B><P ALIGN="JUSTIFY">NOTE 6 &mdash; SEGMENT INFORMATION</P>
</B>
<P ALIGN="JUSTIFY">Cardo's businesses are currently organized into the following two reportable segments;
reconstructive products (the &quot;Reconstructive Division&quot;) and spine products (the &quot;Spine Division&quot;).
The Reconstructive Division segment is comprised of activity relating to Cardo's unicompartmental knee, patella-femoral
products, and reconstructive knee products.  The Spine Division segment is comprised of the spinal lumbar fusion
system and cervical plate and screw systems.    </P>
</FONT><FONT SIZE=1>
</FONT><FONT SIZE=2><P ALIGN="JUSTIFY">These reportable segments are based on the nature of the products
offered.  Management evaluates performance and allocates resources based on several factors, of which the primary
financial measure is segment operating results.  Due to the distinct nature of the products in the Reconstructive Division,
and the fact that it has a more developed market for its products, it is considered by management as a separate
segment.  The Spine Division is still in the process of developing the market and obtaining instrumentation necessary to
sell the products in greater quantities.  As a result, the Spine Division is considered by management as a separate
segment.  The accounting policies of the reportable segments are the same as those described in Note 1.</P>
</FONT><FONT SIZE=1>
</FONT><FONT SIZE=2><P ALIGN="JUSTIFY">As of September 30, 2009, the Reconstructive Division includes
$1,232,823 of goodwill and $4,515,157 in other intangible assets relating to Cardo's unicompartmental knee product.
These amounts are expected to be deductible for income tax purposes. </P>
</FONT><FONT SIZE=1>
</FONT><FONT SIZE=2><P ALIGN="JUSTIFY">The following table sets forth financial information by reportable
segment as of September 30, 2009 and for the nine and three months ended September 30, 2009 and 2008:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="95%" BORDER="0" ALIGN="CENTER">
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
(In thousands)</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Reconstructive</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Spine</B></FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
Division</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;&nbsp;&nbsp; Division &nbsp;&nbsp;&nbsp;</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;</B></FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;&nbsp; Corporate &nbsp;&nbsp;</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF COLSPAN=2 ALIGN="center"><FONT FACE="Times New Roman" SIZE=-1><B>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF COLSPAN=12 ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><U>
Nine Months Ended September 30, 2009 (unaudited)</U></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
            1,175&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             139&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          1,314&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Total cost of sales and operating expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               226&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               28&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
         3,972&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          4,226&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Depreciation and amortization</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               848&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 4&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              26&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             878&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Interest income, net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                    -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              22&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               22&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net income (loss)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               101&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             107&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        (3,976)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        (3,768)
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Property and equipment acquisitions</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               789&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               14&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              59&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             862&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Total assets</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
            9,169&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             269&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
         1,801&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        11,239&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF COLSPAN=12 ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><U>
Nine Months Ended September 30, 2008 (unaudited - restated)</U></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               885&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               47&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             932&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Total cost of sales and operating expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               125&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               14&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
         3,590&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          3,729&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Depreciation and amortization</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               319&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 3&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              12&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             334&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Interest expense, net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                    -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
              37&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               37&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net income (loss)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               441&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               30&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        (3,639)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        (3,168)
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF COLSPAN=12 ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><U>
Three Months Ended September 30, 2009 (unaudited)</U></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               351&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               85&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             436&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Total cost of sales and operating expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 76&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 8&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
         1,250&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          1,334&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Depreciation and amortization</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               303&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 2&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                8&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             313&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Interest income, net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                    -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                6&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 6&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net income (loss)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               (28)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               75&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        (1,252)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        (1,205)
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF COLSPAN=12 ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1><U>
Three Months Ended September 30, 2008 (unaudited - restated)</U></FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net sales</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               386&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               25&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 -&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             411&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Total cost of sales and operating expenses</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 62&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 8&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
         1,011&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
          1,081&nbsp;</FONT></TD>
</TR>
<TR VALIGN="bottom">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Depreciation and amortization</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               211&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 1&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                4&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
             216&nbsp;</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Interest expense, net</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                    -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 -&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                5&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
                 5&nbsp;
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR VALIGN="top">
<TD BGCOLOR=#FFFFFF ALIGN="left"><FONT FACE="Times New Roman" SIZE=-1>
Net income (loss)</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               113&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
               16&nbsp;
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]??_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
        (1,010)
<HR NOSHADE SIZE=4>
</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
&nbsp;</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right"><FONT FACE="Times New Roman" SIZE=-1>
$</FONT></TD>
<TD BGCOLOR=#FFFFFF ALIGN="right" STYLE="vnd.ms-excel.numberformat:_(* #,##0_)[semicolon]_(* (#,##0)[semicolon]_(* [dquote]-[dquote]_)[semicolon]_(@_)"><FONT FACE="Times New Roman" SIZE=-1 COLOR=#000000>
           (881)
<HR NOSHADE SIZE=4>
</FONT></TD>
</TR>
</Table>


<P ALIGN="CENTER">                                                           F-30
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

</FONT><FONT SIZE=2><P ALIGN="JUSTIFY">All of the Company's net sales were attributable to activity in the
United States. There were no long-lived assets held in foreign countries.  </P>
<B>
<P ALIGN="JUSTIFY">NOTE 7 &mdash; SUBSEQUENT EVENTS</P>
</B>
<P ALIGN="JUSTIFY">At a hearing held on September 15, 2009, Cardo, the successful bidder at an auction sale, was
authorized to purchase substantially all of the assets of Vertebron, Inc. ("Vertebron") free and clear of all liens by the
United States Bankruptcy Court for the District of Connecticut (the "Bankruptcy Court"). On September 29, 2009, the
Bankruptcy Court issued an order memorializing the hearing held on September 15, 2009 (the "Order"). </P>

<P ALIGN="JUSTIFY">As a result of the Order, on September 30, 2009, Cardo entered into an Asset Purchase
Agreement (the "Agreement") with Vertebron, as a debtor-in-possession, to purchase substantially all of Vertebron's
assets, excluding certain assets, such as accounts receivable, cash and cash equivalents as of the closing date.
Pursuant to the Agreement, the purchase price for the assets is $1,300,000 to be paid in cash.</P>

<P ALIGN="JUSTIFY">On October 1, 2009, the Company completed the transaction by wiring the $1.17 million balance
due under the Agreement.  Pursuant to the Agreement, Cardo did not establish control of the assets acquired in this
transaction until full consideration was received by Vertebron; therefore, the condensed consolidated financial
statements as of September 30, 2009 do not reflect this transaction. Included in deposits and other assets at September
30, 2009 are cash deposits required by the Bankruptcy Court totaling $130,000 and $29,033 of direct costs associated
with the Vertebron transaction.</P>

<P ALIGN="JUSTIFY">On October 27, 2009, the Company sold 9,949,276 shares of its common stock, par value
$0.001 per share, at a price of $0.35 per share for aggregate gross proceeds of $3,482,250 as part of a private
placement for maximum gross proceeds of $6,500,000. The placement agent is a related party through a significant
common shareholder.</P>

<P ALIGN="JUSTIFY">In connection with this private placement, the Company paid a finder's fee of 8% on a portion of
the gross proceeds and granted 379,398 share purchase warrants. Each share purchase warrant entitles the holder to
purchase one share of the Company's common stock at an exercise price of $0.44 per share for a period of up to five
years.</P>

<P ALIGN="JUSTIFY">
The Company evaluated subsequent events through November 12, 2009, the date this Quarterly Report on Form 10-Q was filed with the SEC.




<P> &nbsp; </P>
<P> &nbsp; </P>

<P ALIGN="CENTER">                                                           F-31
<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" align=left>

<B><FONT SIZE=2><P ALIGN="CENTER">SIGNATURES</P>
</B><P>Pursuant to the requirements of the Securities Act of 1933,&nbsp;the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City of Beverly Hills, state of California, on December 18, 2009.</P>

<TABLE BORDER=0 CELLSPACING=2 CELLPADDING=2 BORDERCOLOR="#ffffff" WIDTH=100%>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<B><FONT SIZE=2><P>CARDO MEDICAL, INC.</B></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT SIZE=2><P>By:</FONT></TD>
<TD WIDTH="46%" VALIGN="TOP">
<FONT SIZE=2><P>/s/&nbsp;ANDREW A. BROOKS
<HR NOSHADE SIZE=2 WIDTH=85% ALIGN="LEFT">
</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="46%" VALIGN="TOP">
<FONT SIZE=2><P>Name:&nbsp;&nbsp; Andrew A. Brooks<BR>
  Title:&nbsp;&nbsp;&nbsp;&nbsp; Chief Executive Officer</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>&nbsp;</P>
<P>Pursuant to the requirements of the Securities Act of 1933, this&nbsp;registration statement has been signed by the following persons in the
capacities and on the dates indicated.</P>

<TABLE BORDER=0 CELLSPACING=2 CELLPADDING=2 BORDERCOLOR="#ffffff" WIDTH=100%>
<TR><TD WIDTH="40%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Signature
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD WIDTH="1%" VALIGN="MIDDLE">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Title
<HR NOSHADE SIZE=2>
</FONT></TD>
<TD WIDTH="1%" VALIGN="MIDDLE">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Date
<HR NOSHADE SIZE=2>
</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="MIDDLE">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="MIDDLE">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>/s/ Andrew A. Brooks
<HR NOSHADE SIZE=2 WIDTH=85% ALIGN="LEFT">
</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>Chief Executive Officer and
Director</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P>December 18, 2009</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>Andrew A. Brooks</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>(Principal Executive Officer)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>/s/ Derrick Romine
<HR NOSHADE SIZE=2 WIDTH=85% ALIGN="LEFT">
</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>Chief Financial Officer</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P>December 18, 2009</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>Derrick Romine</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>(Principal Financial and Accounting Officer)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>/s/ Michael Kvitnitsky
<HR NOSHADE SIZE=2 WIDTH=85% ALIGN="LEFT">
</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>Chief Operating Officer and Director</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P>December 18, 2009</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>Michael Kvitnitsky
</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>/s/ Joseph Loggia
<HR NOSHADE SIZE=2 WIDTH=85% ALIGN="LEFT">
</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>Director</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P>December 18, 2009</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>Joseph Loggia</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>/s/ Thomas H. Morgan
<HR NOSHADE SIZE=2 WIDTH=85% ALIGN="LEFT">
</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>Director</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P>December 18, 2009</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>Thomas H. Morgan</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>/s/ Ronald N. Richards
<HR NOSHADE SIZE=2 WIDTH=85% ALIGN="LEFT">
</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>Director</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P>December 18, 2009</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>Ronald N. Richards</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="38%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="38%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>/s/ Steven D. Rubin
<HR NOSHADE SIZE=2 WIDTH=85% ALIGN="LEFT">
</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>Director</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P>December 18, 2009</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>Steven D. Rubin</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>/s/ Subbarao Uppaluri
<HR NOSHADE SIZE=2 WIDTH=85% ALIGN="LEFT">
</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;Director</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;December 18, 2009</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P>Subbarao Uppaluri</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="38%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
</TABLE>

<FONT SIZE=2>
<P ALIGN="CENTER">&nbsp;</P>

<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>


<B><FONT SIZE=2><P ALIGN="CENTER">EXHIBIT INDEX</P>

</B><P>The following exhibits have been filed as part of this Registration Statement on Form S-1.</P>

<TABLE BORDER=0 CELLSPACING=1 CELLPADDING=1 WIDTH=95%>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="39%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=4>
<B><U><FONT SIZE=2><P ALIGN="CENTER">Incorporated By Reference</P>
<P ALIGN="CENTER"></B></U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<B><U><FONT SIZE=2><P ALIGN="CENTER">Exhibit Number</B></U></FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="CENTER">Exhibit Description</B></U></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="CENTER">Form</B></U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="CENTER">File Number</B></U></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="CENTER">Exhibit</B></U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="CENTER">Filing Date</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">2.1</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Merger Agreement and Plan of Reorganization, dated as of June 18, 2008, by and among clickNsettle.com, Inc.,
Cardo Medical, LLC and Cardo Acquisition, LLC.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">June 23, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">2.2</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>First Amendment to Merger Agreement and Plan of Reorganization, dated as of August 29, 2008, by and among
clickNsettle.com, Inc., Cardo Medical, LLC and Cardo Acquisition, LLC.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</P>
<P ALIGN="CENTER"></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2.2</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">2.3</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Asset Purchase Agreement, dated September 30, 2009, by and among Cardo Medical, Inc. and Vertebron,
Inc.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">October 6, 2009</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">3.1</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Amended and Restated Certificate of Incorporation</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">3.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">March 18, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">3.2</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Amended and Restated Bylaws. </FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">3.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">February 1, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">5.1#</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Opinion of Akerman Senterfitt</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.1</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Escrow Agreement, dated as of August 29, 2008, by and among Chicago Title Company, clickNsettle.com, Inc.
Andrew A. Brooks, M.D. and Mikhail Kvitnitsky.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.2</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Form of Lockup Agreement.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.2</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.3</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Lockup Agreement, dated August 29, 2008, for Derrick Romine.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.3</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.4</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Amended and Restated 1996 Incentive and Nonqualified Stock Option Plan.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10-KSB</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 28, 1998</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.5*</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Form of Cardo Medical, LLC Nonstatutory Option Agreement </FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.5</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.6</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Stock Purchase Agreement, dated as of December 19, 2007, by and among clickNsettle.com, Inc., Frost Gamma
Investments Trust, Dr. Jane Hsiao, Steven D. Rubin and Subbarao Uppaluri.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">December 21, 2007</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.7</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>First Amendment to Stock Purchase Agreement, dated as of January 31, 2008, by and among clickNsettle.com, Inc.,
Frost Gamma Investments Trust, Dr. Jane Hsiao, Steven D. Rubin and Subbarao Uppaluri.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.2</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">February 1, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.8*</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Employment Agreement, dated as of January 31, 2005, by and between Accelerated Innovation, LLC, as successor
to Accin Corporation, and Mikhail Kvitnitsky.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.8</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.9*</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Amendment to Employment Agreement, dated as of June 6, 2008, by and between Accelerated Innovation, LLC and
Mikhail Kvitnitsky.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.9</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
</TABLE>

<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<TABLE BORDER=0 CELLSPACING=1 CELLPADDING=1 WIDTH=95%>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.10*</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Termination Agreement, effective as of June 23, 2008, by and between Accelerated Innovation, LLC and Mikhail
Kvitnitsky.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.10</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.11*</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Employment Offer Letter with Derrick Romine dated September 5, 2008.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.11</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.12</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Form of Indemnification Agreement for officers and directors.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.12</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.13+</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Agreement, dated as of August 22, 2006, by and between Accelerated Innovation, LLC, as successor to Accin
Corporation, and Infinesse Corporation.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.13</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.14</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Supplier Agreement, dated June 16, 2006, between Stelkast Company and Accelerated Innovation, LLC, as
successor to Accin.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.14</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.15+</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Contracted Services Agreement, dated September 1, 2007, by and between Accelerated Innovation, LLC and Summit
Corporate Services, Inc.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.15</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.16</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Agreement dated April 30, 2008, by and among Mikhail Kvitnitsky and Accelerated Innovation, LLC, Cervical Xpand,
LLC and Uni-Knee, LLC.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.16</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.17</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Agreement dated April 30, 2008, by and among John D. Kuczynski, Accelerated Innovation, LLC and Uni-Knee,
LLC.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.17</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.18</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Agreement dated April 30, 2008, by and among Richard H. Rothman, M.D., Ph.D., Accelerated Innovation, LLC and
Cervical Xpand, LLC.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.18</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.19</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Agreement dated April 30, 2008, by and among Todd J. Albert, M.D., Accelerated Innovation, LLC and Cervical
Xpand, LLC.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.19</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.20</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Agreement dated April 28, 2008, by and among, Rafail Zubok, Accelerated Innovation, LLC and Cervical Xpand,
LLC.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.20</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.21*</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Nonstatutory Option Agreement, dated August 27, 2008, by and between Cardo Medical, LLC and Derrick
Romine.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10-Q</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">November 14, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">10.22</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Form of Registration Rights Agreement, dated October 27, 2009, by and among Cardo Medical, Inc. and the Several
Purchasers.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">October 29, 2009</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">21.1</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Subsidiaries of clickNsettle.com, Inc.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8-K</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">000-21419</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">21.1</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">September 9, 2008</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">23.1#</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Consent of Stonefield Josephson, Inc. </FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">23.2#</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>Consent of Akerman Senterfitt (included in Exhibit 5.1)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">&nbsp;</TD>
</TR>
</TABLE>

<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>

<TABLE BORDER=0 CELLSPACING=1 CELLPADDING=1 WIDTH=95%>
<TR><TD WIDTH="6%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="CENTER">#</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="89%" VALIGN="BOTTOM" COLSPAN=5>
<FONT SIZE=2><P>Filed herewith.</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="CENTER">*</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="89%" VALIGN="BOTTOM" COLSPAN=5>
<FONT SIZE=2><P>Management compensation plan or agreement.</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="CENTER">+</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="89%" VALIGN="BOTTOM" COLSPAN=5>
<FONT SIZE=2><P>Confidential Treatment has been requested as to a portion of this exhibit.  The confidential portion of this exhibit has
been omitted and filed separately with the Securities and Exchange Commission.</FONT></TD>
</TR>
</TABLE>


<HR WIDTH="100%">
<P style="PAGE-BREAK-BEFORE: always" ALIGN=left>


</BODY>
</HTML>
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{"company-data": {"conformed-name": "Cardo Medical, Inc.", "cik": "0000925741", "assigned-sic": "3842", "irs-number": "232753988", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-163827", "film-number": "091249904"}, "business-address": {"street1": "9701 WILSHIRE BLVD., SUITE 1100", "city": "BEVERLY HILLS", "state": "CA", "zip": "90212", "phone": "(310) 274-2036"}, "mail-address": {"street1": "9701 WILSHIRE BLVD., SUITE 1100", "city": "BEVERLY HILLS", "state": "CA", "zip": "90212"}, "former-company": [{"former-conformed-name": "CLICKNSETTLE COM INC", "date-changed": "20000823"}, {"former-conformed-name": "NAM CORP", "date-changed": "19960802"}]}
December 18, 2009 S-1 DOC
As filed with the Securities
and Exchange Commission on December 18, 2009
Registration No. 333-________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CARDO MEDICAL, INC.
(Exact Name of registrant as specified in its charter)
Delaware
3842
23-2753988
(State or other jurisdiction of
(Primary Standard Industrial
(I.R.S. Employer
incorporation or organization)
Classification Code Number)
Identification Number)
9701 Wilshire Blvd., Suite 1100, Beverly Hills, CA  90212
(310) 274-2036
(Address, including zip code, and telephone number, including area code, of registrant's principal
executive offices)
Dr. Andrew A. Brooks, M.D., Chief Executive Officer
Cardo Medical, Inc.
9701 Wilshire Blvd., Suite 1100, Beverly Hills, CA  90212
Telephone: (310) 274-2036
Fax: (310) 271-2632
Please send a copy of all communications to:
Bradley Houser, Esq.
Akerman Senterfitt
One Southeast Third Ave., 25
th
Floor
Miami, Florida 33131-1714
Telephone: (305) 374-5600
Fax: (305) 374-5095
(Name, address, including zip code, and telephone number, including area code, of agent for
service)
As soon as practicable after this Registration Statement becomes effective.
(Approximate date of commencement of proposed sale to the public)
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 check the following box.
x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the
Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering.
o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act,
check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering.
o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act,
check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering.
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 the definitions of "large accelerated filer," "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
x
CALCULATION OF REGISTRATION FEE
Title of each class of
securities to be registered
Amount to be
registered
(1)
Proposed
maximum
offering price
per unit
(2)
Proposed
maximum
aggregate
offering price
(2)
Amount of
registration fee
Common Stock, par value $0.001 per share
18,333,450
$    0.61
$     11,183,404.50
$    624.03
____________
(1)
The number of shares that are to be registered includes 17,757,837 shares issued in the first and second tranches of the
private placement that closed on October 27, 2009 and November 13, 2009, respectively, and 575,613 shares underlying the warrants issued
to the placement agent.
(2)
Estimated solely for the purpose of calculating the registration fee which was computed in accordance with Rule
457(c) under the Securities Act of 1933, as amended (the "Securities Act"), on the basis of the average bid and asked prices as
reported on the OTC Bulletin Board on December 14, 2009.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the
Commission acting pursuant to said section 8(a), may determine.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND
MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED _____________.
PROSPECTUS
18,333,450 Shares
CARDO MEDICAL, INC.
Common Stock
OTC Bulletin Board Trading Symbol: CDOM.OB
The selling stockholders may offer and sell from time to time up to an aggregate of 18,333,450 shares of Cardo Medical, Inc. (the
"Company") common stock that they own or that they may acquire from us upon exercise of warrants. For information
concerning the selling stockholders and the manner in which they may offer and sell shares of our common stock, see "Selling
Stockholders" and "Plan of Distribution" in this prospectus.
We will not receive any proceeds from the sale by the selling stockholders of their shares of common stock other than the exercise
price of the warrants if and when the warrants are exercised unless the warrants are exercised on a cashless basis.
On December 17, 2009, the last reported sale price for our common stock on the OTC Bulletin Board was $1.01 per share.
Investing in shares of our common stock involves a high degree of risk. You should purchase our common stock only if you can
afford to lose your entire investment. See "Risk Factors," which begins on page 3.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The selling stockholders have not engaged any underwriter in connection with the sale of their shares of common stock. The
selling stockholders may sell their shares of common stock in the public market based on the market price at the time of sale or at
negotiated prices. The selling stockholders may also sell their shares in transactions that are not in the public market in the manner set
forth under "Plan of Distribution."
You should rely only on the information contained in this prospectus. We have not authorized any dealer, salesperson or other person
to provide you with information concerning us, except for the information contained in this prospectus. The information contained in this
prospectus is complete and accurate only as of the date on the front cover page of this prospectus, regardless of the time of delivery of this
prospectus or the sale of any common stock. This prospectus is not an offer to sell these securities and we are not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
The date of this prospectus is December [   ], 2009.
The information in this prospectus is not complete and may be changed.  We may not sell these securities until the registration statement filed with the Securities
and Exchange Commission is effective.  This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
TABLE OF CONTENTS
Prospectus Summary
1
The Offering
3
Risk Factors
3
Forward-Looking Statements
24
Use Of Proceeds
26
Dilution
26
Selling Stockholders
26
Plan Of Distribution
29
Description of Securities to be Registered
31
Interests of Named Experts and Counsel
32
Information With Respect to the Registrant
32
Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters
44
Management's Discussion And Analysis Of Financial Condition and Results of Operations
45
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
58
Directors and Executive Officers
58
Executive Compensation
61
Security Ownership of Certain Beneficial Owners and Management
63
Transactions with Related Persons, Promoters and Certain Control Persons
66
Corporate Governance
66
Material Changes
66
Incorporation of Certain Information by Reference
66
Disclosure of Commission Position on Indemnification for Securities Act Liabilities
66
Legal Matters
66
Experts
67
How to get more Information
67
Financial Statements
F-1
PROSPECTUS SUMMARY
This summary does not contain all of the information that is important to you. You should read the entire prospectus, including the
Risk Factors and our consolidated financial statements and related notes appearing elsewhere in this prospectus before making an
investment decision.
Our Business
Cardo Medical, Inc. ("Cardo" or the "Company"), a Delaware corporation, is an orthopedic medical device company specializing in
designing, developing and marketing reconstructive joint devices and spinal surgical devices. Reconstructive joint devices are used to
replace knee, hip and other joints that have deteriorated through disease or injury. Spinal surgical devices involve products to stabilize the
spine for fusion and reconstructive procedures. Within these areas, Cardo intends to focus on the higher-growth sectors of the orthopedic
industry, such as advanced minimally invasive instrumentation and bone-conserving high-performance implants. Cardo is focused on
developing surgical devices that will enable surgeons to bridge the gap between soft tissue-driven sports medicine techniques and
classical reconstructive surgical procedures. Cardo commercializes its reconstructive joint devices through its Cardo Orthopedics division
and its spine devices through its Cardo Spine division.
GENERAL
On June 18, 2008, Cardo Medical, LLC, a California limited liability company, entered into a Merger Agreement and Plan
of Reorganization with clickNsettle.com, Inc. ("CKST") and Cardo Acquisition, LLC, a California limited liability company and wholly-owned
subsidiary of CKST. Upon the consummation of the transactions contemplated by the Merger Agreement, CKST acquired Cardo Medical,
LLC through a merger of Cardo Medical, LLC with Cardo Acquisition, with Cardo Medical, LLC continuing as the surviving entity in the
Merger and a wholly-owned subsidiary of CKST. Pursuant to the Merger Agreement, all of the issued and outstanding units of Cardo
Medical, LLC's membership interests were converted into the right to receive shares of the common stock of CKST.  In connection with the
consummation of the Merger, CKST approved through its stockholders an amendment to its Amended and Restated Certificate of
Incorporation to change its name from "clickNsettle.com, Inc." to "Cardo Medical, Inc."
Our executive offices are located at 9701 Wilshire Blvd., Suite 1100, Beverly Hills, California 90212.  Our telephone number is (310)
274-2036.  Our website is www.cardomedical.com. Information on our website or any other website is not part of this prospectus.
References to "we," "us," "our" and similar words in this prospectus refer to Cardo Medical, Inc. and its
consolidated subsidiaries.
Sale of Securities to the Selling Stockholders
On October 27, 2009, we sold, in the first tranche of a private placement, 9,949,276 shares of common stock at $0.35 per share.
On November 13, 2009, we sold, in the second tranche of a private placement, 7,808,561 shares of common stock at $0.35 per share.   In
the private placement, we issued an aggregate of 17,757,837 shares of common stock at $0.35 per share, to 74 accredited investors.  In
conjunction with the private placement, Cardo Medical, Inc. issued to the placement agent warrants to purchase 575,613 shares of the
Company's common stock, a number that is equivalent to six percent (6%) of the number of shares of common stock sold in the private
placement transaction to investors that were solicited by the placement agent ("Approved Investors"), at an exercise price of
$0.44 per share.  The warrants issued to the placement agent in the private placement are sometimes referred to as the "Placement
Agent Warrants".  The Placement Agent Warrants expire on November 13, 2014 and may be exercised on a cashless basis.
We paid the placement agent for this offering a commission equal to eight percent (8%) of the gross proceeds from the offering that
was received from Approved Investors.  Additionally, the placement agent received (i) a cash non-accountable expense allowance equal to
one percent (1%) of the gross proceeds of the offering received from Approved Investors; (ii) reimbursement of the placement
agent's out-of-pocket expenses related to the offering, including its legal fees and expenses up to $40,000; and (iii) warrants to purchase
575,613 shares of common stock equal to six percent (6%) of the number of shares sold in the offering to Approved Investors at a exercise
price of $0.44 per share.
1
The registration rights agreement entered into with subscribers in the offering requires us to use commercially reasonable efforts to
have this registration statement declared effective by the Securities and Exchange Commission ("SEC") as soon as practicable,
but in no event later than the one hundred twenty (120) calendar days after the final closing date or one hundred fifty (150) calendar days if
the SEC reviews the registration statement.
2
THE OFFERING
Common Stock Offered:
The selling stockholders are offering a total of 18,333,450 shares of common stock, of which 17,757,837 shares are
outstanding and 575,613 shares are issuable upon exercise of warrants.
Outstanding Shares of Common Stock:
230,293,141 shares
1,2
Common Stock to be Outstanding
After Exercise of Placement Agent Warrants:
230,868,754 shares
1
Use of Proceeds:
We will receive no proceeds from the sale of any shares by the selling stockholders. In the event that the placement
agent exercises its warrants, we would receive the exercise price. If all warrants are exercised, we would receive approximately $253,270
unless the warrants are exercised on a cashless basis, all of which, if and when received, would be used for working capital and other
corporate purposes.
___________
(1)
As of December 14, 2009. Does not include a total of 2,358,400 shares of common stock granted under existing
options to purchase common stock.
(2)
As of December 14, 2009. Does not include the 575,613 shares of common stock issuable upon exercise of warrants
held by the placement agent.
RISK FACTORS
This registration statement includes "forward-looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), including, in particular, certain statements about our plans, strategies and prospects. Although we
believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot
assure you that such plans, intentions or expectations will be achieved. Important factors that could cause our actual results to differ
materially from our forward-looking statements include those set forth in this Risk Factors section.
An investment in the securities is speculative and involves a high degree of risk.  You should carefully consider the risk factors
described below together with the other information contained in this prospectus before making a decision to purchase our securities.  If
any of the risks described below occur, or if other risks not identified below occur, our business, business prospects, cash flow, financial
condition, stock price and results of operations could be materially adversely affected.  Under these circumstances, the trading price of our
common stock could decline, and you may lose all or part of your investment.  Additional risks and uncertainties not presently known to us
or that we currently deem immaterial also may impair our financial condition and operations.  Furthermore, references to "we,"
"us" and "our" are references to the Company.
In addition to the risk factors related to the offering set forth below, the risk factors set forth in the SEC filings, including the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2008, and future filings with the SEC are incorporated by reference
into this prospectus.
You understand that, certain unique factors make an investment in the Company subject to a high degree of risk.  You have been
cautioned that an investment in the Company is speculative and involves significant risks, and that it is probably not possible to foresee
and describe all of the business, economic and financial risk factors which may affect the Company.
3
This document contains "forward-looking statements," as that term is defined under the Private Securities Litigation Reform
Act of 1995, or the PSLRA.  Forward-looking statements include statements about our expectations, beliefs or intentions regarding our
product development efforts, business, financial condition, results of operations, strategies or prospects.  You can identify forward-looking
statements by the fact that these statements do not relate strictly to historical or current matters.  Rather, forward-looking statements relate
to anticipated or expected events, activities, trends or results as of the date they are made.  Because forward-looking statements relate to
matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to
differ materially from any future results expressed or implied by the forward-looking statements.
Any or all of our forward-looking statements in this document may turn out to be wrong.  They can be affected by inaccurate
assumptions we might make or by known or unknown risks and uncertainties.  Many factors mentioned in our discussion in this document
will be important in determining future results.  Consequently, no forward-looking statement can be guaranteed.  Actual future results may
vary materially.  While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any
obligation to do so to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking statements.  We
intend that all forward-looking statements be subject to the safe-harbor provisions of the PSLRA.  These forward-looking statements are
only predictions and reflect our views as of the date they are made with respect to future events and financial performance.
Risks and uncertainties, the occurrence of which could adversely affect our business, include the following:
Risks Related to Our Business, Industry and Regulatory Matters
We expect to incur significant losses, either directly or indirectly through the companies in which we develop our products, for at
least the next several years, and we cannot assure you that we will ever be profitable.
We expect to incur significant losses over the next several years, either directly or indirectly through the companies in which we
develop our products, as we expand our research and development activities, apply for regulatory approvals, develop additional technology
and expand our operations.  We cannot assure you that we will be successful in selling or licensing any of the products we might develop
or predict the terms we may be able to obtain in any sales or licensing transaction.
We have a limited number of products currently available for sale and there is a high risk that our research and development
efforts might not successfully generate any viable product candidates in the future.
We currently have nine products available for sale, all of which are in the early stages of distribution.  Other than those nine products,
we are in the preliminary stages of product identification and development, and have identified only a few potential additional products.  We
have not yet conducted preclinical studies or clinical testing on these potential additional products.  It is statistically unlikely that the few
products that we have identified as potential candidates will actually lead to successful development efforts, and we do not expect any
additional products resulting from our research to be commercially available for several years, if at all.  Our leads for potential products will
be subject to the risks and failures inherent in developing medical devices and products, including, but not limited to, the unanticipated
problems relating to research and development, product testing, confirming intellectual property rights and non-infringement, regulatory
compliance, manufacturing, marketing and competition.  Additional expenses may exceed current estimates and, therefore, adversely
affect our profitability.
We will need to raise additional funds in the future to fund our operations and research, and these funds may not be available
on acceptable terms, if at all.
We anticipate spending significant amounts of cash on expanding our research and development, sales and marketing efforts, and
product commercialization.  We expect proceeds from the recent private placement will be sufficient to provide working capital
requirements for the next nine months.  However, actual capital requirements may change as a result of various factors, including:
the success of our research and development efforts, and any changes in the breadth of our research and development
programs;
4
results from preclinical studies and clinical trials conducted by us or our collaborative partners or licensees, if any;
the number and timing of acquisitions and other strategic transactions;
our ability to maintain and establish corporate relationships and research collaborations;
our ability to manage growth and costs associated with this growth, and the costs associated with increased capital expenditures;
the time and costs involved in filing, prosecuting, defending and enforcing patent and intellectual property claims;
the cost and timing of obtaining and maintaining regulatory approval or clearance for our products and products in development;
the expenses we incur in manufacturing and selling our products;
the revenues generated by sales of our products;
expenses that may be incurred in pursuing or defending any potential litigation; and
the costs associated with our employee retention programs and related benefits.
Our primary goal as it relates to liquidity and capital resources is to attain the appropriate level of debt and equity and the resultant
cash to implement our business plan.  We may need to raise additional funds, which may not be available to us on favorable terms, if at all.
If we raise capital by issuing equity or debt securities, our existing stockholders may experience dilution and the new equity or debt
securities may have rights, preferences and privileges senior to those of our existing stockholders.  Further, if we raise additional funds
through collaboration, licensing or other similar arrangements, it may be necessary to relinquish rights to our existing or potential products
or proprietary technologies, or to grant licenses on terms that are not favorable to us.  If we are unable to raise needed capital on terms
acceptable to us, we may not be able to develop new products, enhance our existing products, execute our business plan, take advantage
of future opportunities, respond to competitive pressures or unanticipated customer requirements or continue to operate our business.  Any
of these events could have a material adverse effect on our business, financial condition and results of operations.
Cost containment measures, pressure from our competitors and availability of medical reimbursement may impact our ability to
sell our products at prices necessary to expand our operations and reach profitability.
Healthcare costs have risen significantly over the past decade and numerous initiatives and reforms initiated by legislators, regulators
and third-party payors to curb these costs have resulted in a consolidation trend in the healthcare industry, including hospitals.  This has
resulted in greater pricing and other competitive pressures and the exclusion of certain suppliers from important market segments as group
purchasing organizations, independent delivery networks and large single accounts continue to consolidate purchasing decisions for some
hospital customers.  We expect that market demand, government regulation, third-party reimbursement policies and societal pressures will
continue to change the national and worldwide healthcare industry, resulting in further business consolidations and alliances among
customers and competitors.  This consolidation may reduce competition, exert downward pressure on the prices of our products and
adversely impact our business, financial condition or results of operations.
Further, third-party payors in the United States and abroad continue to work to contain healthcare costs.  The introduction of cost
containment incentives, along with closer scrutiny of healthcare expenditures by both private health insurers and employers, has resulted
in increased discounts and contractual adjustments to hospital charges for services performed and has shifted services between inpatient
and outpatient settings.  Hospitals or physicians may respond to these cost-containment pressures by substituting lower-cost products or
other therapies for our products, the occurrence of which may adversely impact our business, financial condition and results of
operation.
The market for orthopedic, knee and hip surgery devices is large and growing at a significant rate.  Numerous new companies and
technologies, as well as more established companies, have entered this market.  New entrants to our markets include numerous niche
companies with a singular product focus, as well as companies owned partially by surgeons, who may have greater access than we do to
the surgeons who may use our products.  As a result of this intensified competition, we believe there will be increasing pressure to reduce
pricing of our medical devices.  If we are unable to price our products appropriately due to these competitive pressures or for other
reasons, our profit margins will shrink and our ability to invest in and grow our business and achieve profitability will decrease.
5
Sales of our products will depend on the availability of adequate reimbursement from third-party payors (such as governmental
programs, for example, Medicare and Medicaid, private insurance plans and managed care programs), both in terms of the sales volumes
and prices of our products.
Healthcare providers, such as hospitals that purchase medical devices for treating their patients, generally rely on third-party payors to
reimburse all or part of the costs and fees associated with the procedures performed with these devices.  These third-party payors may
deny reimbursement if they feel that a device is not the most cost-effective treatment available, or was used for an unapproved indication.
As such, surgeons are unlikely to use our products if they do not receive reimbursement adequate to cover the cost of their involvement in
the surgical procedures.  The failure of surgeons to use our products, or the diminished use by surgeons, may have a material adverse
impact on our business, financial condition and results of operations.
We also believe that future reimbursement from third-party payors may be subject to increased restrictions both in the U.S. and
international markets.  If we sell our products internationally, market acceptance may depend, in part, upon the availability of
reimbursement within the prevailing healthcare payment systems.  Reimbursement and healthcare payment systems in international
markets vary significantly by country, and include both government sponsored healthcare and private insurance.
Future legislation, regulation or reimbursement policies of third-party payors may adversely affect the demand for our existing products
or our products currently under development and limit our ability to sell our products on a profitable basis.  Also, third-party payors are
increasingly challenging the prices charged for medical products and services.  Particularly in the United States, third-party payors carefully
review, and increasingly challenge, the prices charged for procedures and medical products.  Also, greater numbers of insured individuals
are receiving (and will continue to receive over the next decade) their medical care through managed care programs, which monitor and
often require pre-approval of the services that a member will receive.  Many managed care programs are paying their providers on a
capitated basis, which puts the providers at financial risk for the services provided to their patients by paying them a predetermined
payment per member per month.  Challenges by third-party payors to the prices charged for medical products and services, coupled with
the increasing popularity of managed care programs, may result in hospitals and physicians seeking lower-cost alternatives to our
products, the occurrence of which could materially adversely affect our business, financial condition and results of operations.
Legislative or administrative reforms to the United States or international reimbursement systems in a manner that significantly
reduces reimbursement for procedures using our medical devices or denies coverage for those procedures could have a material adverse
effect on our business, financial condition or results of operations.
We believe that the overall escalating cost of medical products and services has led to, and will continue to lead to, increased
pressures on the healthcare industry to reduce the costs of products and services.  We cannot assure you that third-party reimbursement
and coverage will be available or adequate, or that future legislation, regulation, or reimbursement policies of third-party payors will not
adversely affect the demand for our products or our ability to sell these products on a profitable basis.  We also cannot assure you that our
products will be considered cost-effective by third-party payors, that reimbursement will be available or, if available, that the third-party
payors' reimbursement policies will not adversely affect our ability to sell our products profitably.
We must convince orthopedic and spine surgeons that our products are an attractive alternative to existing surgical treatments
of orthopedic and spine disorders.
To be commercially successful, we believe that we will need surgeons to adopt our products as their preferred treatment option for
their patients.  Surgeons may be slow to adopt our products for the following reasons, among others:
lack of clinical evidence;
the time that must be dedicated for training;
lack of experience with our products;
perceived risks generally associated with the use of new products and procedures;
perceived risks associated with purchasing products from an early-stage medical device company;
6
costs associated with the purchase of new products and equipment; and
limited availability of reimbursement within healthcare payment systems.
We also believe that recommendations and support of our products by influential surgeons are essential for market acceptance and
adoption.  If we do not receive support from these surgeons, surgeons and hospitals may not use our products.  As a result, we may not
achieve expected revenues and may never become profitable.
Our business plan relies on certain assumptions about the market for our products, which, if incorrect, may adversely affect our
business and profitability.
We believe that the aging of the general population and increasingly active lifestyles will continue and that these trends will increase
the need for our medical products.  However, the projected demand for our products could differ materially from actual demand if our
assumptions regarding these trends and acceptance of our products by the medical community prove to be incorrect or do not materialize,
or if non-surgical treatments gain more widespread acceptance as a viable alternative to our devices.
We expect to face significant competition as a result of the rapid technological changes in the medical devices industry, which
could have an adverse effect on our business, financial condition or results of operations.
The medical device market is highly competitive, subject to rapid change, and significantly affected by new product introductions and
other market activities of industry participants.  We expect to encounter intense competition across our product lines and in each market in
which our products are sold from various medical device companies, many of which are likely to have greater financial and marketing
resources than us.  Primary competitors are Zimmer, J&J/DePuy Orthopedics, Stryker and Biomet in the hips and knees market, and
Medtronic/Sofamor Danek, J&J/DePuy Spine and Synthes in the spine market.  In addition, we will face competition from a wide
range of companies that sell a single or a limited number of competitive products or which participate only in a specific market segment, as
well as from non-medical device companies, including pharmaceutical companies, which may offer alternative therapies for disease states
intended to be treated using our products.
Additionally, the medical device market is characterized by extensive research and development, and rapid technological change.
Developments by other companies of new or improved products, processes or technologies may make our products or proposed products
obsolete or less competitive and may negatively impact our revenues.  We will be required to devote continued efforts and financial
resources to develop or acquire scientifically advanced technologies and products, apply our technologies cost-effectively across product
lines and markets, attract and retain skilled development personnel, obtain patent and other protection for our technologies and products,
obtain required regulatory and reimbursement approvals and successfully manufacture and market our products consistent with our quality
standards.  If we fail to develop new products or enhance existing products, it could have a material adverse effect on our business,
financial condition or results of operations.
Many of our larger competitors are either publicly traded or divisions or subsidiaries of publicly traded companies, and enjoy several
competitive advantages over us, including:
larger and more well-established distribution networks;
established relationships with a greater number of surgeons, hospitals, other healthcare providers and third-party payors;
products supported by long-term clinical data;
greater experience in obtaining and maintaining regulatory approvals or clearances for products and product enhancements;
greater name recognition;
greater access to manufacturers, vendors and raw materials for manufacturing medical devices;
more expansive portfolios of intellectual property rights; and
greater financial and other resources for product research and development, sales and marketing, intellectual property protection and
litigation.
7
Hospitals, surgeons, distributors and agents may have existing relationships with other medical device companies that make it
difficult for us to establish new relationships with them.  As a result, we may not be able to sell and market our products effectively.
We believe that to sell and market our products effectively, we must establish relationships with key surgeons and hospitals in the field
of orthopedic knee, hip and spinal surgery.  Many of these key surgeons and hospitals already have long-standing relationships with large,
better-known companies that dominate the medical devices industry through collaborative research programs and other relationships.
Because of these existing relationships, some of which may be contractually enforced, surgeons and hospitals may be reluctant to adopt
our products, particularly if our products compete with or have the potential to compete with products supported through their own
collaborative research programs or by these existing relationships.  Even if these surgeons and hospitals purchase our products, they may
be unwilling to enter into collaborative relationships with us to promote joint marketing programs or to provide us with clinical and financial
data.
We work primarily with a network of independent orthopedic product agents and distributors that generate sales leads for us, in
addition to working with our own internal direct sales force.  If these product agents and distributors believe that their relationship with us is
less beneficial than other relationships they may have with more established or well-known medical device companies, they may be
unwilling to continue their relationships with us, making it more difficult for us to sell and market our products effectively.
Our manufacturers may be unsuccessful in manufacturing products at the levels required to meet future market demand.
We are seeking to rapidly grow sales of our products, and, if we are successful, our growth may strain the ability of our manufacturers
to manufacture an increasingly large supply of our products.  Manufacturers regularly experience difficulties in scaling up production and
our manufacturers may face difficulties in increasing their production levels.
Our manufacturers may not be able to manufacture our products with consistent and satisfactory quality or in sufficient quantities to
meet demand, which could hurt our reputation, cause our customers to cancel orders or refrain from placing new orders for our products
and reduce or slow growth of sales of our products.  The increased production volume also could make it harder for us to maintain control
over expenses, manage our relationships with our manufacturers, maintain good relations with our employees or otherwise manage our
business.
We rely on single source manufacturers, which could impair our ability to meet demand for delivering our products in a timely
manner or within our budget.
We rely on third-party manufacturers to manufacture our products.  It is critical to our business that our contract manufacturers be able
to provide us with products in substantial quantities, in accordance with agreed upon specifications, in compliance with regulatory
requirements, at acceptable cost and on a timely basis.  Our anticipated growth could strain the ability of manufacturers to deliver an
increasingly large supply of products.  If we are unable to obtain sufficient quantities of high quality products to meet customer demand on
a timely and cost-effective basis, we could lose customers, our reputation could be harmed and our business could suffer.
We currently use up to seven manufacturers for each of our devices.  Our dependence on these few manufacturers involves several
risks, including limited control over pricing, availability, quality and delivery schedules.  If any one or more of our manufacturers cease to
provide us with sufficient quantities of our products in a timely manner or on terms acceptable to us, or cease to manufacture products of
acceptable quality, we would have to seek alternative sources of manufacturing.  We could experience delays while we locate and engage
alternative qualified manufacturers, and we might be unable to engage alternative manufacturers on favorable terms, if at all.  Any
disruption or increased expenses relating to our supply source could harm our sales and marketing efforts and adversely affect our ability
to generate revenue.
Our growth will depend on developing new products or product enhancements, requiring significant research and development,
clinical trials and regulatory approvals, all of which are expensive and time-consuming and may not result in a commercially viable product.
8
We believe that it is important for us to continue to build a more complete product offering and to enhance the products we currently
offer.  Our success in this regard will depend in part on our ability to develop and introduce new products and product enhancements to
keep pace with the rapidly changing medical device market.  We cannot assure you that we will be able to successfully develop, obtain
regulatory approval for or market new products or product enhancements, or that any of our future products or enhancements will be
accepted by the surgeons who use our products or the payors who financially support many of the procedures performed with our
products.
Factors affecting the success of any new product offering or enhancement to an existing product include our ability to:
properly identify and anticipate surgeon and patient needs;
fund the development of and introduce new products or product enhancements in a timely manner;
avoid infringing upon the intellectual property rights of third parties;
obtain the necessary regulatory clearances or approvals for new products or product enhancements;
demonstrate, if required, the safety and efficacy of new products with data from preclinical studies and clinical trials;
provide adequate training to potential users of our products;
receive adequate reimbursement; and
develop an effective and dedicated marketing and distribution network.
If we do not develop new products or product enhancements in time to meet market demand or if there is insufficient demand for these
products or enhancements, our results of operations may suffer.
If we choose to grow our business by acquiring new and complementary businesses, products or technologies, we may be
unable to complete these acquisitions or successfully integrate them in a cost-effective and non-disruptive manner.
We believe that our success depends in part on our ability to continually enhance and broaden our product offering in response to
changing customer demands, competitive pressures and technologies and our ability to increase our market share.  To achieve this
growth, we have completed certain acquisitions, and intend to pursue other acquisitions of complementary businesses, products or
technologies, in some cases instead of developing them ourselves.  We may be unable to successfully complete any further acquisitions,
or we may not be able to successfully integrate any acquired business, product or technology into our business or retain any key
personnel, manufacturers or distributors.  The success of any acquisition, investment or alliance undertaken will depend on a number of
factors, including:
our ability to identify suitable opportunities;
our ability to finance any acquisition, investment or alliance;
whether we are able to establish an acquisition, investment or alliance on terms that are satisfactory to us, if at all;
the strength of the other companies' underlying technology and ability to execute;
intellectual property and litigation related to these technologies or businesses; and
our ability to successfully integrate the acquired company or business with our existing business, including the ability to adequately
fund acquired in-process research and development projects.
These efforts could be expensive and time-consuming, disrupt our ongoing business and distract management.  If we are unable to
integrate any acquired businesses, products or technologies effectively, our business, financial condition and results of operations will be
materially adversely affected.  For example, an acquisition could materially impair our operating results by causing us to incur debt or
requiring us to amortize significant amounts of expenses, including non-cash acquisition costs, and acquired assets.
9
We rely on our independent sales distributors and sales representatives to market and sell our products.
We depend upon independent sales distributors and sales representatives to market and sell our products, in particular due to their
sales and service expertise and relationships with customers in the marketplace.  Independent distributors and sales representatives may
terminate their relationships with us or devote insufficient sales efforts to our products for any number of reasons.  We do not control our
independent distributors and they may not be successful in implementing our marketing plans.  If we fail to maintain our existing
relationships with our independent distributors and sales representatives, our operations would suffer.  Similarly, our failure to recruit and
retain additional skilled, independent sales distributors and sales representatives could have an adverse effect on our operations.  We may
experience turnover with some of our independent sales distributors, which could adversely affect our short-term financial results while we
transition to new distributors.  Our failure to manage these transitions effectively could negatively impact our operations and profitability.
We are dependent on the services of Andrew A. Brooks, M.D. and Michael Kvitnitsky, and the loss of either of them could harm
our business.
Our success depends in part upon the continued service of Andrew A. Brooks, M.D., who serves as our Chairman of the Board and
Chief Executive Officer, and Michael Kvitnitsky, who serves as our President and Chief Operating Officer.  Dr. Brooks and Mr. Kvitnitsky
are critical to the overall management of our Company as well as to the development of our technology, our culture and our strategic
direction.  The loss of either Dr. Brooks or Mr. Kvitnitsky could have a material adverse effect on our business, results of operations and
financial condition.  We have not obtained and do not expect to obtain any key-person life insurance policies on Dr. Brooks or Mr.
Kvitnitsky.
Failure to attract and retain skilled personnel and cultivate key academic collaborations will delay product development
programs and business development efforts.
Our success will depend on our ability to continuously attract and retain highly qualified management and scientific personnel and on
our ability to develop relationships with academic collaborators.  The competition for qualified personnel and collaborators is intense.  We
cannot assure you that we will be able to attract or retain personnel or cultivate academic collaborations.  In addition, our collaborators may
have arrangements with other companies to assist those companies in developing products that compete with ours.  Our inability to hire or
retain qualified personnel or cultivate academic collaborations would harm our business.
If we fail to properly manage our anticipated growth, our business could suffer.
We have experienced growth in, and will continue to pursue rapid growth in, the number of surgeons using our products, the types of
products we offer and the number of states in which our products are sold.  This growth has placed and may continue to place significant
demands on our managerial, operational and financial resources and systems.  We are currently focused on increasing the size and
effectiveness of our sales force and distribution network, marketing activities, research and development efforts, inventory management
systems, management team, accounting systems and corporate infrastructure.  If we do not manage our growth effectively, the quality of
our products, our relationships with surgeons, distributors and hospitals, and our reputation could suffer.
We must attract and retain qualified personnel and third-party distributors and manage and train them effectively.  Personnel qualified
in the design, development, production and marketing of our products are difficult to find and hire, and enhancements of information
technology systems to support our growth are difficult to implement.  In addition, we will need to carefully monitor and manage our surgeon
services, and the quality assurance and efficiency of our manufacturers and distributors.  This managing, training and monitoring will
require allocation of valuable management resources and significant expense.
If we decide to market and sell our devices and products internationally, we would be subject to various risks relating to our
international activities, which could negatively impact our business and financial results.
We currently do not market or sell our products outside of the United States.  However, we may actively pursue one or more
international markets within the next few years, at which point we would be exposed to risks separate and distinct from those we face in
our U.S. operations.  Any international business we may engage in may be adversely affected by changing economic conditions in foreign
countries, as well as U.S. laws that may affect the international
10
business operations of a U.S. company such as ours.  In addition,
increases or decreases in the value of the U.S. dollar relative to foreign currencies could affect our results of operations since international
sales most likely would be denominated in the functional currency of the country in which the product is sold.
Certain additional or different risks inherent in engaging in international business include the following:
compliance with existing and changing foreign regulatory laws and requirements;
export restrictions and controls and other government regulation relating to technology or medical devices;
foreign laws and business practices favoring local companies;
pricing pressures that we may experience internationally;
the availability and level of reimbursement within prevailing foreign healthcare payment systems or insurance providers;
shipping delays due to cross-border sales;
longer payment cycles;
difficulties and costs of establishing, staffing and managing foreign operations;
potentially adverse tax consequences, tariffs and other trade barriers;
difficulties in enforcing intellectual property rights;
difficulties in enforcing agreements and collecting receivables through certain foreign legal systems;
political and economic instability; and
international terrorism and anti-American sentiment.
Our exposure to each of these risks may increase our costs, impair our ability to market and sell our products and require significant
management attention, resulting in harm to our business and financial results.
We are subject to substantial governmental regulation that could change and thus force us to make modifications to how we
develop, manufacture and price our products.
The medical device industry is regulated extensively by governmental authorities, principally the Food and Drug Administration, or the
FDA, and corresponding state and foreign regulatory agencies.  The FDA and other federal, state and foreign governmental agencies
regulate, among other things, the development, manufacturing, clinical trials, marketing clearance and approval, promotion and sale of
medical devices.
In particular, the FDA permits commercial distribution of a new medical device only after the device has received clearance under
Section 510(k), or is the subject of an approved premarket approval application, or PMA.  The FDA will approve marketing a medical
device through the Section 510(k) process if it is demonstrated that the new product is substantially equivalent to other Section 510(k)-cleared
products.  The PMA process is more costly, lengthy and uncertain than the Section 510(k) clearance process.  A PMA application
must be supported by extensive data, including, but not limited to, technical, preclinical, clinical trial, manufacturing and labeling data, to
demonstrate to the FDA's satisfaction the safety and efficacy of the device for its intended use.  To date, all of our products, unless
exempt, have been cleared through the Section 510(k) process.  We have no experience in obtaining premarket approval.
Compliance with complex regulations is, and will continue to be, time-consuming, burdensome and expensive.  Failure to comply with
these regulations could jeopardize our ability to manufacture and sell our products and result in enforcement actions such as warning
letters, fines, injunctions, civil penalties, termination of distribution, seizures of products, total or partial suspension of production, refusal of
the FDA or other regulatory agencies to grant future clearances or approvals, or withdrawals or suspensions of current clearances or
approvals.  These enforcement actions could result in higher than anticipated costs or lower than anticipated revenue and have a material
adverse effect on our business, financial condition and results of operations.  In the most egregious cases, we could face criminal
sanctions, closure of the manufacturing facilities in which our products are manufactured, and prohibitions on the sales of our products.
Foreign governmental authorities that regulate the manufacture and sale of medical devices have become increasingly vigilant, and if
we engage in sales of our products in foreign countries, these sales would be subject to rigorous foreign regulations.  In these
circumstances, we would rely heavily on our foreign independent sales
11
agencies to comply with the varying regulations, and any failures on
their part could result in restrictions on the sale of our products in foreign countries.  We currently do not sell any of our products
internationally.
Federal regulatory reforms may adversely affect our ability to sell our products profitably.
Legislation may be drafted from time to time and introduced in Congress that could significantly change the statutory provisions
governing the clearance or approval, manufacture and marketing of a medical device in the United States.  In addition, FDA regulations
and guidance often are revised or reinterpreted by the agency in ways that may significantly affect our business and our ability to
commercialize our products.  It is impossible to predict whether legislative changes will be enacted or FDA regulations, guidance or
interpretations changed, and what the impact of these changes, if any, may be.  For example, on September 27, 2007, Congress enacted,
and the President signed into law, the Food and Drug Administration Amendments Act of 2007.  This new legislation grants significant new
powers to the FDA and imposes new obligations and requirements on both the FDA and FDA-regulated industries, including the medical
device industry.  In particular, this law requires, among other things, that the FDA propose, and ultimately implement, regulations that will
require manufacturers to label medical devices with unique identifiers unless a waiver is received from the FDA.  In addition, it reauthorizes
the FDA to collect medical device user fees and amends the existing user fee program by, among other things, reducing device application
fees and imposing new fees, including a new annual establishment registration fee.  Also, the new law authorizes the FDA to establish a
unique medical device identification system and expands the federal government's clinical trial registry and results databank to include,
among other things, information on medical device clinical trials.  While these new requirements undoubtedly will have a significant effect
on the medical device industry, we cannot yet predict the extent of that effect on our Company.  As regulations, guidance and
interpretations are issued by the FDA relating to the new legislation, its impact on the industry, as well as our business, will become
clearer.  Compliance with those regulations could require us to take additional steps, and incur additional costs, in manufacturing and
labeling products.
We have not yet collected long-term clinical data to support the safety of our products, and our products may, therefore, prove
to be less safe and effective than initially thought.
We obtained clearance to offer all of our products that require FDA clearance or approval through the Section 510(k) clearance
process, which is less rigorous than the PMA process and requires less supporting clinical data.  As a result of using this expedited
process, we currently lack the breadth of published long-term clinical data supporting the safety of our products and the benefits they offer
that might have been generated using the PMA process.  Because of the lack of this in-depth data, surgeons may be slow to adopt our
products, we may not have comparative data that our competitors have or are generating, and we may be subject to greater regulatory and
product liability risks.  Further, future patient studies or clinical experience may indicate that treatment with our products does not improve
outcomes.  These results would reduce demand for our products, thereby preventing us from becoming profitable.  If future results and
experience indicate that our products cause unexpected or serious complications or other unforeseen negative effects, we could be subject
to significant legal liability and harm to our business reputation.  The medical device market has been particularly prone to costly product
liability litigation.  The time and costs of any product liability litigation we may face may materially adversely affect our business, financial
condition or results of operations, even if we are ultimately victorious in any such litigation.
The FDA requires us to obtain new Section 510(k) clearances or premarket approvals for modifications to our approved
products.  Otherwise, we may have to cease marketing, or to recall, the modified products until clearances are obtained.
Any modification to a Section 510(k)-cleared device that could significantly affect its safety or efficacy, or that would constitute a major
change in its intended use, requires a new Section 510(k) clearance or, possibly, premarket approval.  Under FDA regulations, every
manufacturer must make this determination in the first instance, but the FDA may review any manufacturer's decision.  The FDA may not
agree with any of our decisions regarding whether new clearances or approvals are necessary.  If the FDA requires us to seek Section
510(k) clearance or premarket approval for any modification to a previously cleared product, we may be required to cease marketing, or to
recall, the modified product until we obtain clearance or approval.  This may expose us to significant regulatory fines or penalties.
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In addition, our products could be subject to recall if the FDA determines, for any reason, that our products are not safe or effective.
Any recall or FDA requirement that we seek additional approvals or clearances could result in delays, fines, costs associated with
modifying a product, loss of revenue, harm to our reputation and loss of customers and potential operating restrictions imposed by the
FDA.  Any product liability claim or recall would divert managerial and financial resources and could harm our reputation with customers.
We cannot assure you that we will not have product liability claims or recalls in the future, or that these claims or recalls would not have a
material adverse effect on our business.
If we or our third-party manufacturers fail to comply with the FDA's Quality System Regulations, the manufacture of our
products could be interrupted and our product sales and operating results could suffer.
We and some of our third-party manufacturers are required to comply with the FDA's Quality System Regulation, or QSR, which
covers the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization,
storage and shipping of our products.  In addition, we and our manufacturers will be subject to the regulations of foreign jurisdictions
regarding the manufacturing process if we market our products overseas.
The FDA enforces the QSR through periodic and unannounced inspections of manufacturing facilities.  If our facilities or those of our
manufacturers fail to take satisfactory corrective action in response to an adverse QSR inspection, the FDA could take enforcement action,
including any of the following sanctions:
customer notifications or repair, replacement, refunds, recall, detention or seizure of our products;
operating restrictions or partial suspension or total shutdown of production;
untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;
refusing or delaying requests for Section 510(k) clearance or PMA approvals of new products or modified products;
withdrawing Section 510(k) clearances or PMA approvals;
refusal to grant export approval for our products; or
criminal prosecution.
If we sell our products in the European Community, we will be required to maintain certain ISO certifications and must undergo periodic
inspections by notified bodies to obtain and maintain these certifications.   We cannot assure you that we or our manufacturers will be able
to obtain or maintain all required registrations and certifications.
Any of these factors could impair our ability to produce our products in a cost-effective and timely manner in order to meet our
customers' demands.  We also may be required to bear other costs or take other actions that may have a negative impact on our future
sales and our ability to generate profits
We are subject to various complex laws and regulations.  Compliance with these laws and regulations is costly and time-consuming,
and failure to comply with them can have adverse consequences on our business.
U.S. federal government entities, such as the Occupational Safety and Health Administration, the Environmental Protection Agency,
the Internal Revenue Service, the Centers for Medicare and Medicaid Services and the U.S. Department of Veteran's Affairs, as well as the
FDA and regulatory authorities in other states, have each been empowered to administer certain laws and regulations applicable to us.
Many of the laws and regulations are complex, and compliance will require substantial time and effort by our officers, directors and
employees and extensive consultations with our advisors.  Because of this complexity, we cannot assure you that our efforts will be
sufficient to ensure compliance with all of these laws and regulations at any given time.
We are subject to audit, investigation and litigation by each of these entities to ensure compliance, each of which also can be
time-consuming, costly, divert the attention of senior management and have a significant effect on our business, even if we are found to have
been in compliance or the extent of our non-compliance is deemed immaterial.  If we are found to not be in compliance with any of these
laws and regulations, we and, in some cases, our officers and directors may be subject to fines, penalties, criminal sanctions and other
liability, any of which could have a material adverse effect on our business.
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Risks Related to Our Financial Results
We are an orthopedic medical device company with a limited operating history and our business may not become profitable.
We are an orthopedic medical device company with a limited operating history.  We began commercial sales in 2007.  We currently
have the following nine products with Section 510(k) marketing clearance from the FDA: (1) Cardo Align 360 Posterior-Stabilized Total
Knee System; (2) Cardo Align 360 Cruciate Retaining Knee System; (3) Cardo Align 360 Unicompartmental Knee (used in partial knee
replacement procedures); (4) Cardo Align 360 Patello-Femoral Replacement (used in partial knee replacement procedures); (5) Cardo
Total Hip System (used in total hip replacement procedures); (6) Cardo Bipolar Hip System (two-piece product used in femoral head
replacement procedures); (7) Cardo Monopolar Hip System (one-piece product used in femoral head replacement procedures); (8) Cardo
Cervical Plate (used in neck fusion procedures); and (9) Cardo Pedicle Screw System (used in lumbar spine fusion procedures).
The success of our business will depend, in part, on our ability to develop and obtain regulatory clearances or approvals for
enhancements to our products or for planned products, which we may be unable to do in a timely manner, or at all.  Our success and
ability to generate revenue or be profitable also depends on our ability to establish our sales and marketing force, generate product sales
and control costs, all of which we may be unable to do.  In addition, we may not be successful in our research and development efforts to
develop enhancements of these products or to develop new products.
We have a limited history of operations upon which you can evaluate our business, and our operating expenses are increasing.  We
have yet to demonstrate that we can generate ongoing sufficient sales of our products to become profitable.  The extent of our future
operating losses and the timing of profitability, if at all, are difficult to predict.  Our lack of any significant operating history also limits your
ability to make a comparative evaluation of us, our products and our prospects.  Even if we do achieve profitability as planned, we may not
be able to sustain or increase profitability on an ongoing basis.
Our quarterly financial results are likely to fluctuate significantly because our sales prospects are uncertain.
Our quarterly operating results are difficult to predict and may fluctuate significantly from period to period, particularly because our
sales prospects are uncertain.  These fluctuations also may affect our annual operating results and may cause those results to fluctuate
unexpectedly from year to year.  The level of our revenues and results of operations at any given time will be based primarily on the
following factors:
our ability to increase sales of our products;
our ability to develop, manufacture and market new products;
results of clinical research and trials on our current or planned products;
our ability to obtain regulatory approvals;
legislative and reimbursement policy changes affecting the products we may offer or those of our competitors;
the variability of the profit margins among the products we sell;
our ability to expand and maintain an effective and dedicated sales force;
pricing pressure from competitors applicable to our products;
adverse third-party reimbursement outcomes;
timing of new product launches, acquisitions, licenses or other significant events by us or our competitors;
the ability of our manufacturers to timely provide us with an adequate supply of products and meet our quality requirements; and
interruption in the manufacturing or distribution of our products.
For all the foregoing reasons, it will be difficult for us to forecast demand for our products with any degree of certainty.  In addition, we
will be increasing our operating expenses as we build our commercial capabilities.  Accordingly, we may experience significant,
unanticipated quarterly losses.  Because of these factors, our operating
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results in one or more future quarters may fail to meet the
expectations of securities analysts or investors and may adversely impact the trading price of our common stock.
Risks Related to Our Intellectual Property and Potential Litigation
If we cannot adequately protect our patents and other intellectual property rights, we may lose market share to our competitors
and be unable to operate our business profitably.
Our success depends on our ability to protect our proprietary rights to the technologies used in our products.  We rely significantly on
patent protection, as well as a combination of trade secrets, know-how, continuing technological innovations, strategic alliances and
licensing opportunities to develop, maintain and strengthen our competitive position.  We also expect to pursue a policy of generally
obtaining patent protection in both the United States and abroad for patentable subject matter in our proprietary devices and attempt to
review third-party patents and patent applications to the extent they become known to develop an effective patent strategy, avoid infringing
third-party patents, identify licensing opportunities and monitor the patent claims of others.
We have a number of U.S. and foreign patent applications pending in spine, hip and knee reconstructive surgery.  Although we have
filed these patent applications, we cannot assure you that any patents may issue or that, if they issue, these patents will adequately protect
our rights or permit us to gain or keep any competitive advantage.
The U.S. Patent and Trademark Office, or USPTO, may deny or require significant narrowing of claims in our pending patent
applications, and patents issued as a result of the pending patent applications, if any, may not provide us with significant commercial
protection or be issued in a form that is advantageous to us.  We also could incur substantial costs in proceedings before the USPTO.
These proceedings could result in adverse decisions as to the priority of our inventions and the narrowing or invalidation of claims in any
patents that may issue.  Any U.S. and foreign patents that may be issued in the future could subsequently be successfully challenged by
others and invalidated or rendered unenforceable, which could limit our ability to stop competitors from marketing and selling related
products.
Both the patent application process and the process of managing patent disputes can be time-consuming and expensive.  Competitors
may be able to design around our patents or develop products that provide outcomes that are comparable to our products.  Although we
have entered into confidentiality agreements and intellectual property assignment agreements with certain of our employees, consultants
and advisors as one of the ways we seek to protect our intellectual property and other proprietary technology, these agreements may not
be enforceable or may not provide meaningful protection for our trade secrets or other proprietary information in the event of unauthorized
use or disclosure or other breaches of the agreements.  Furthermore, the laws of some foreign countries may not protect our intellectual
property rights to the same extent as the laws of the United States, if at all.  Since most of our pending patent applications are for the
United States only, we lack a corresponding scope of patent protection in other countries.  Thus, we may not be able to stop a competitor
from marketing products in other countries that are similar to some of our products.
Changes to intellectual property laws may negatively impact our ability to protect our intellectual property.
There are numerous proposed changes to the patent laws and rules of the USPTO, which, if enacted, may have a significant impact on
our ability to protect our technology and enforce our intellectual property rights.  For example, proposed changes to the patent rules of the
USPTO were scheduled to take effect on November 1, 2007, which would have limited significantly the right to pursue continuation
applications.  On October 31, 2007, a temporary injunction was granted in a lawsuit against the USPTO which served to stay the
application of the proposed rules.  On April 1, 2008, the court issued its ruling that the proposed patent rules were void, thus making the
injunction permanent.  If the ruling is successfully appealed, the proposed rules may take effect and may adversely impact our ability to
prevent others from designing around our existing patents.
Moreover, Congress is considering several significant changes to the U.S. patent laws, including changing from a "first to
invent" to a "first inventor to file" system, requiring that patent lawsuits be brought in the forum of the defendant, requiring
the apportionment of patent damages, and creating a post-grant opposition process to challenge patents after they have issued.
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The medical device industry is characterized by patent and other intellectual property litigation, and we could become subject to
litigation that could be costly, result in diverting management's time and efforts, require us to pay damages, and/or prevent us from
marketing our existing or future products.
The medical device market in which we primarily participate is in large part technology-driven.  Physician customers move quickly to
new products and new technologies.  As a result, intellectual property rights, particularly patents and trade secrets, play a significant role in
product development and differentiation.  However, intellectual property litigation to defend or create market advantage is inherently
complex, unpredictable, time-consuming and costly.  Furthermore, appellate courts frequently overturn lower court patent decisions.
In addition, competing parties frequently file multiple suits to leverage patent portfolios across product lines, technologies and
geographies and to balance risk and exposure between the parties.  In some cases, several competitors are parties in the same
proceeding, or in a series of related proceedings, or litigate multiple features of a single class of medical devices.  These forces frequently
drive settlement not only of individual cases, but also of a series of pending and potentially related and unrelated cases.  In addition,
although monetary and injunctive relief is typically sought, remedies and restitution generally are not determined until the conclusion of the
proceedings and are frequently modified on appeal.  Accordingly, the outcomes of individual cases are difficult to time, predict or quantify
and are often dependent upon the outcomes of other cases in other geographies.
Certain product categories, including pedicle screws, have been subject to significant patent litigation in recent years.  Since we sell
orthopedic and spinal devices, such as pedicle screws, knee replacement devices, and cervical plates, and we recently introduced our
Accin pedicle screw system, any related litigation could harm our business.
We also may have to take legal action in the future to protect our patents, trade secrets or know-how or to assert them against claimed
infringement by others.  Any legal action of that type could be costly and time-consuming, and we cannot assure you that any lawsuit will
be successful.  In addition, we may not have sufficient resources to enforce our intellectual property rights or to defend our patents against
a challenge.
Further, we intend to protect our proprietary technology, in part, through proprietary information and inventions agreements with
employees, consultants and other parties.  These agreements with some of our employees and consultants generally contain standard
provisions requiring those individuals to assign to the employer, without additional consideration, inventions conceived or reduced to
practice by them while employed or retained by the employer, subject to customary exceptions.  If any of our employees, consultants or
others breach these agreements, or if these agreements are found to be unenforceable, competitors may learn of our trade secrets and
proprietary information.
For the reasons indicated above, enforcing our intellectual property rights may be costly, difficult and time-consuming.  Even if
successful, litigation to enforce our intellectual property rights or to defend our patents against challenge could be expensive and
time-consuming and could divert our management's attention.
Patent infringement lawsuits brought against us could have a material adverse affect on our commercial success, and our
ability to develop and sell our products and to operate profitably.
As the number of entrants into our market increases, the possibility of a patent infringement claim against us grows.  While we make
an effort to ensure that our products do not infringe other parties' patents and proprietary rights, our products and methods may be covered
by patents held by our competitors.  In addition, our competitors may assert that future products we may market infringe their patents.
A patent infringement suit brought against us or any strategic partners or licensees may force us or any strategic partners or licensees
to stop or delay developing, manufacturing or selling potential products that are claimed to infringe a third party's intellectual property,
unless that party grants us or any strategic partners or licensees rights to use its intellectual property.  In those cases, we may be required
to obtain licenses to patents or proprietary rights of others in order to continue to commercialize our products.  However, we may not be
able to obtain any licenses required under any patents or proprietary rights of third parties on acceptable terms, or at all, and any licenses
may require substantial royalties or other payments by us.  Even if we, any strategic partners or licensees were able to
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obtain rights to the
third party's intellectual property, these rights may be non-exclusive, thereby giving our competitors access to the same intellectual
property.  Ultimately, we may be unable to commercialize some of our potential products or may have to cease some of our business
operations as a result of patent infringement claims, which could severely harm our business.
We may be subject to damages resulting from claims that we or our employees or consultants have wrongfully used or disclosed
alleged trade secrets of their former employers.
Some of our employees and consultants were previously employed or engaged at universities or other medical device companies,
including our competitors or potential competitors.  We could in the future be subject to claims that these employees and consultants, or
we, have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers.  Litigation
may be necessary to defend against these claims.  If we fail to defend against these claims, a court could order us to pay substantial
damages and prohibit us from using technologies or features that are essential to our products and processes, if these technologies or
features are found to incorporate or be derived from the trade secrets or other proprietary information of the former employers.  In addition,
we may lose valuable intellectual property rights or personnel.  A loss of key research personnel or their work product could hamper or
prevent our ability to commercialize certain potential products, which could severely harm our business.  Even if we are successful in
defending against these claims, litigation could result in substantial costs and be a distraction to management.
Fluctuations in the cost and availability of insurance could adversely affect our profitability or our risk management profile.
We hold a number of insurance policies, including product liability insurance, errors and omissions insurance, directors' and officers'
liability insurance, property insurance, general liability insurance, employee benefits liability and workers' compensation insurance.  If the
costs of maintaining adequate insurance coverage increases significantly at any time, our operating results could be materially adversely
impacted.  Likewise, if any of our current insurance coverage should become unavailable to us or become economically impractical, we
would be required to operate our business without indemnity from commercial insurance providers.
Potential future product liability claims and other litigation, including contract litigation, may adversely affect our business, reputation
and ability to attract and retain customers.
Reconstructive and spine surgery involves a high risk of serious complications, including bleeding, nerve injury, paralysis and even
death.  As a result, we are exposed to potential product liability claims that are inherent in the testing, manufacture and sale of medical
devices for surgery procedures.  Many of these medical devices are designed to be implanted in the human body for long periods of time
or indefinitely.  A number of factors could result in an unsafe condition or injury to, or death of, a patient with respect to these or other
products that we manufacture or sell, including component failures, manufacturing flaws, design defects or inadequate disclosure of
product-related risks or product-related information.  These factors could result in product liability claims, a recall of one or more products
or a safety alert relating to one or more products.  Product liability claims may be brought by individuals or by groups seeking to represent
a class.
In connection with our acquisition of the assets of Accin Corporation ("Accin") in May 2007 (through our ownership of
Accelerated Innovation ("Accelerated Innovation"), one of our former subsidiaries) and as a result of the reverse merger we
completed in August 2008 (the "Merger"), we assumed the responsibility for any litigation or claims related to Accin's business,
including product liability claims relating to products previously sold by Accin.  The outcome of litigation, particularly class action lawsuits, is
difficult to assess or quantify.  Plaintiffs in these lawsuits often seek recovery of very large or indeterminate amounts, including not only
actual damages, but also punitive damages.  The magnitude of the potential loss relating to these lawsuits may remain unknown for
substantial periods of time.  In addition, the cost to defend against any future litigation may be significant.
Any product liability claim brought against us, with or without merit, could result in the increase of our insurance rates or the inability to
secure coverage in the future.  In addition, if our product liability insurance proves to be inadequate to pay a damage award, we may have
to pay the excess out of our cash reserves, which may harm our financial condition.  If longer-term patient results and experience indicate
that our products or any component cause
17
tissue damage, motor impairment or other adverse effects, we could be subject to significant
liability.  Finally, even a meritless or unsuccessful product liability claim could harm our reputation in the industry, lead to significant legal
fees and result in diverting management's attention from managing our business.
Even if any product liability loss is covered by an insurance policy, these policies have substantial retentions or deductibles that
provide that insurance proceeds are not recoverable until the losses incurred exceed the amount of those retentions or deductibles.  To the
extent that any losses are below these retentions or deductibles, we will be responsible for paying these losses.  Paying retentions or
deductibles for a significant amount of claims could have a material adverse effect on our business, financial condition and results of
operations.
Further, it is possible that we may in the future be substantially self-insured with respect to general and product liability claims.  As a
result of economic factors currently impacting the insurance industry, meaningful product liability insurance coverage also may become
unavailable due to its economically prohibitive cost.  The absence of significant third-party insurance coverage increases potential
exposure to unanticipated claims and adverse decisions.  As a result, product liability claims, product recalls and other litigation in the
future, regardless of their outcome, could have a material adverse effect on our financial position, results of operations or liquidity.
Any claims relating to our making improper payments to physicians for consulting services, or other potential violations of
regulations governing interactions between us and healthcare providers, could be time-consuming and costly.
Our relationship with surgeons, hospitals and the marketers of our products are subject to scrutiny under various state and federal
anti-kickback, self-referral, false claims and similar laws, often referred to collectively as healthcare fraud and abuse laws.  The federal
anti-kickback laws prohibit unlawful inducements for the referral of business reimbursable under federally-funded health care programs, such
as remuneration provided to physicians to induce them to use certain medical devices reimbursable by Medicare or Medicaid.  Healthcare
fraud and abuse laws are complex and subject to evolving interpretations, and even minor, inadvertent violations potentially can give rise to
claims that the relevant law has been violated.  Certain states in which we market our products have similar anti-kickback, anti-fee splitting
and self-referral laws, imposing substantial penalties for violations.  Any violations of these laws could result in a material adverse effect on
the market price of our common stock, as well as our business, financial condition and results of operations.  We cannot assure you that
any of the healthcare fraud and abuse laws will not change or be interpreted in the future in a manner which restricts or adversely affects
our business activities or relationships with surgeons, hospitals and marketers of our products.  In addition, possible sanctions for violating
these anti-kickback laws include monetary fines, civil and criminal penalties, exclusion from Medicare and Medicaid programs and
forfeiture of amounts collected in violation of these prohibitions.
Federal anti-kickback laws and regulations prohibit any knowing and willful offer, payment, solicitation or receipt of any form of
remuneration by an individual or entity in return for, or to induce:
the referral of an individual for a service or product for which payment may be made by Medicare, Medicaid or other
government-sponsored healthcare program; or
purchasing, leasing, ordering or arranging for any service or product for which payment may be made by a government-sponsored
healthcare program.
We must comply with a variety of other laws, such as laws prohibiting false claims for reimbursement under Medicare and Medicaid,
which also can be triggered by violations of federal anti-kickback laws; Healthcare Insurance Portability and Accountability Act of 1996,
which protects the privacy of individually identifiable healthcare information; and the Federal Trade Commission Act and similar laws
regulating advertisement and consumer protections.  In certain cases, federal and state authorities pursue actions for false claims on the
basis that manufacturers and distributors are promoting unapproved or off-label uses of their products.
Pursuant to FDA regulations, we can market our products only for cleared or approved uses.  Although surgeons are permitted to use
medical devices for indications other than those cleared or approved by the FDA based on their medical judgment, we are prohibited from
promoting products for those off-label uses.  We market our products and provide promotional materials and training programs to surgeons
regarding the use of our products.  Although we believe our marketing, promotional materials and training programs for surgeons do not
constitute promotion of
18
unapproved uses of our products, if it is determined that our marketing, promotional materials or training programs
constitute promotion of unapproved uses, we could be subject to significant fines in addition to regulatory enforcement actions, including
the issuance of a warning letter, injunction, seizure and criminal penalty.
The scope and enforcement of these laws is uncertain and subject to rapid change, especially in light of the lack of applicable
precedent and regulations.  We cannot assure you that federal or state regulatory authorities will not challenge or investigate our current or
future activities under these laws.  Any challenge or investigation could have a material adverse effect on our business, financial condition
and results of operations.  Any state or federal regulatory review of us, regardless of the outcome, would be costly and time-consuming.
Additionally, we cannot predict the impact of any changes in these laws, and whether or not they will be retroactive.
Risks Related to Ownership of Our Common Stock
Our common stock may be thinly traded.
There is a very minimal public market for our common stock.  We cannot predict how liquid the market for our common stock might
become.  Our common stock will likely be thinly traded compared to larger more widely known companies.
Trades of our common stock are conducted on the OTC Bulletin Board.   We anticipate applying for listing of our common stock on
NYSE AMEX LLC.  We cannot ensure that we will be able to satisfy the listing standards of the NYSE AMEX LLC or that our common
stock will be accepted for listing.  Should we fail to satisfy the initial listing standards of the NYSE AMEX LLC, or our common stock is
otherwise rejected for listing and remains listed on the OTC Bulletin Board or suspended from the OTC Bulletin Board, the trading price of
our common stock could suffer, the trading market for our common stock may be less liquid and our common stock price may be subject to
increased volatility.
Furthermore, for companies whose securities are traded in the OTC Bulletin Board, it is more difficult to obtain accurate stock
quotations or needed capital.  Also, because major wire services generally do not publish press releases about these companies, it is also
more difficult for them to obtain coverage for significant news and events.
In addition, the price at which our common stock may be sold is very unpredictable because there could be very few trades in our
common stock.  We cannot predict the extent to which an active public market for our common stock will develop or be sustained at any
time in the future.  If our common stock is thinly traded, a large block of shares traded can lead to a dramatic fluctuation in the share price.
We expect that the price of our common stock will fluctuate substantially, potentially adversely affecting the ability of investors
to sell their shares.
The market price of our common stock is likely to be highly volatile and subject to wide fluctuations in response to the following factors,
many of which are generally beyond our control.  These factors may include:
volume and timing of orders for our products;
the introduction of new products or product enhancements by us or our competitors;
quarterly variations in our or our competitor's results of operations;
announcements of technological or medical innovations for treating spine, knee and hip pathologies;
our ability to develop, obtain regulatory clearance or approval for, and market new and enhanced products on a timely basis;
changes in governmental regulations or in the status of our regulatory approvals, clearances or applications, including announcements
of actions by the FDA or other regulatory agencies;
changes in the availability of third-party reimbursement in the United States or other countries;
the acquisition or divestiture of businesses, products, assets or technology;
disputes, litigation or other developments with respect to intellectual property rights or other potential legal actions;
sales of large blocks of our common stock, including sales by our executive officers and directors;
19
changes in earnings estimates or recommendations by securities analysts; and
general market conditions and other factors, including factors unrelated to our operating performance or the operating performance of
our competitors.
Market price fluctuations may negatively affect the ability of investors to sell our shares at consistent prices.
Securities analysts may elect not to report on our common stock or may issue negative reports that adversely affect the price of
our common stock.
At this time, no securities analyst provides research coverage of our common stock.  Further, securities analysts may never provide
this coverage in the future.  Rules mandated by the Sarbanes Oxley Act of 2002 and other restrictions led to a number of fundamental
changes in how analysts are reviewed and compensated.  In particular, many investment banking firms are required to contract with
independent financial analysts for their stock research.  It may remain difficult for a company with a small market capitalization such as
ours to attract independent financial analysts that will cover our common stock.  If securities analysts do not cover our common stock, the
lack of research coverage may adversely affect our actual and potential market price and trading volume.
The trading market for our common stock may be affected in part by the research and reports that industry or financial analysts publish
about our business.  If one or more analysts elect to cover our Company and then downgrade the stock, the stock price may decline
rapidly.  If one or more of these analysts cease coverage of our Company, we could lose visibility in the market, which in turn could cause
our stock price to decline.  This could have a negative effect on the market price of our shares.
Anti-takeover provisions in our charter documents and Delaware law may discourage or prevent a change in control, even if an
acquisition would be beneficial to our stockholders, which could adversely affect our stock price and prevent attempts by our stockholders
to replace or remove our current management.
Our Certificate of Incorporation and Bylaws contain provisions that could delay or prevent a change in control of our Company or
changes in our Board of Directors that our stockholders might consider favorable.  Some of these provisions:
impose limitations on our stockholders to call special stockholder meetings; and
authorize the issuance of preferred stock which can be created and issued by the Board of Directors without prior stockholder
approval, with rights senior to those of the common stock.
In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit certain
business combinations with stockholders owning 15% or more of our outstanding voting stock.  These and other provisions in our
Certificate of Incorporation, our Bylaws and Delaware law could make it more difficult for stockholders or potential acquirers to obtain
control of our Board of Directors or initiate actions that are opposed by our then-current Board of Directors, including to delay or impede a
merger, tender offer or proxy contest involving our Company.  Any delay or prevention of a change in control transaction or changes in our
Board of Directors could cause the market price of our common stock to decline.
Because our common stock may be a "penny stock," it may be more difficult for investors to sell shares of our
common stock, and the market price of our common stock may be adversely affected.
Our common stock may be a "penny stock" if, among other things, the stock price is below $5.00 per share, we are not
listed for trading on a national securities exchange or approved for quotation on the Nasdaq Stock Market or any other national stock
exchange, or we have not met certain net tangible asset or average revenue requirements.  Broker-dealers who sell penny stocks must
provide purchasers of these stocks with a standardized risk-disclosure document prepared by the SEC.  This document provides
information about penny stocks and the nature and level of risks involved in investing in the penny-stock market.  A broker also must give a
purchaser, orally or in writing, bid and offer quotations and information regarding broker and salesperson compensation, make a written
determination that the penny stock is a suitable investment for the purchaser, and obtain the purchaser's written agreement to the
purchase.  In addition, broker-dealers must provide customers that hold penny stock in their accounts with that broker-dealer a monthly
statement containing price and market information relating to the penny stock.  If a penny
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stock is sold to an investor in violation of the
penny stock rules, the investor may be able to cancel its purchase and get its money back.
If applicable, the penny stock rules may make it difficult for investors to sell their shares of our common stock.  Because of the rules
and restrictions applicable to a penny stock, there is less trading in penny stocks and the market price of our common stock may be
adversely affected.  Also, many brokers choose not to participate in penny stock transactions.  Accordingly, investors may not always be
able to resell their shares of our common stock publicly at times and prices that they feel are appropriate.
A significant number of shares are eligible for resale by our stockholders and the sale of those shares could adversely affect
the stock price.
A number of our outstanding shares of common stock are eligible for resale by our stockholders.  Furthermore, a significant number of
additional shares will become eligible for resale within the next nine months, or sooner, if the Company elects to waive lock-up restrictions
applicable to such shares.  If our stockholders whose shares are, or hereafter become, eligible for resale sell, or indicate an intention to
sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline.
Directors, executive officers, principal stockholders and affiliated entities own a significant percentage of our capital stock, and
they may make decisions that you do not consider to be in the best interests of our stockholders.
As of December 14, 2009, our directors, executive officers, principal stockholders and affiliated entities beneficially owned, in the
aggregate, approximately 58.1% of our outstanding voting securities.  As a result, if some or all of them acted together, they would have
the ability to exert substantial influence over the election of our Board of Directors and the outcome of issues requiring approval by our
stockholders.  This concentration of ownership also may have the effect of delaying or preventing a change in control of our Company that
may be favored by other stockholders.  This could prevent transactions in which stockholders might otherwise recover a premium for their
shares over current market prices.
Our stock price could decline as a result of our failure to meet reporting and other regulatory requirements.
Our management team is responsible for our operations, reporting and compliance.  Our failure to comply with the Sarbanes-Oxley
Act, once our Company becomes subject thereto, and/or the reporting requirements and other provisions of securities laws could
negatively affect our stock price and adversely affect our results of operations, cash flow and financial condition.
Operating as a small public company also requires us to make forward-looking statements about future operating results and to
provide some guidance to the public markets.  Our management team has limited experience serving in a managerial capacity in a public
company and as a result projections may not be made timely or set at expected performance levels and could materially affect the price of
our shares. Any failure to meet published forward-looking statements that adversely affect the stock price could result in losses to
investors, stockholder lawsuits or other litigation, sanctions or restrictions issued by the SEC or any stock market upon which our stock is
traded.
If we do not implement necessary improvements to our internal control over financial reporting in an efficient and timely
manner, or if we discover additional deficiencies and weaknesses in existing systems and controls, we could be subject to regulatory
enforcement and investors may lose confidence in our ability to operate in compliance with existing internal control rules and regulations,
either of which could result in a decline in our share price.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be
disclosed in company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the SEC's rules and forms.  Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in Company reports filed or submitted under the Exchange Act is
accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate to allow
timely decisions regarding required disclosure. As required by Rules 13a-15 and 15d-15 under the Exchange Act, our chief
21
executive officer and chief financial officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures as of September 30, 2009.  Based upon their evaluation, and as a result of previously identified material weakness in
internal control over financial reporting as discussed in our Annual Report on Form 10-K for the year ended December 31, 2008, they
concluded that our disclosure controls and procedures were not effective as of September 30, 2009. The previously reported material
weaknesses in internal control over financial reporting related to (1) adequate qualified staff necessary to effectively apply the process, and
(2) methods and practices employed to report unusual transactions such as our reverse merger. Our management has discussed the
material weakness in our internal control over financial reporting with our audit committee. In an effort to remediate the identified material
weaknesses, we have documented our process and procedures governing our internal reporting. We also plan to implement further
changes to our internal control over financial reporting, including (1) a re-evaluation of our staffing needs, and (2) analysis of unusual
transactions as they are occurring to allow adequate time for multiple levels of review.
Through these steps, we believe we are addressing the deficiencies that affected our internal control over financial reporting.
However, the effectiveness of any system of internal controls is subject to inherent limitations and we cannot assure you that our internal
control over financial reporting will prevent or detect all errors.  Also, management may not be able to implement necessary improvements
to internal control over financial reporting in an efficient and timely manner and may discover additional deficiencies and weaknesses in
existing systems and controls, especially if the systems and controls are tested by an increased rate of growth or the impact of
acquisitions.  In addition, upgrades or enhancements to computer systems could cause internal control weaknesses.
If we are unable to establish adequate internal controls over financial reporting systems, we may encounter difficulties in the audit or
review of our financial statements by our independent public accountants, which in turn may have a material adverse effect on our ability to
comply with the reporting obligations imposed upon us by the SEC.
If we fail to maintain an effective system of internal control, we may be unable to produce reliable financial reports or prevent fraud.  If
we are unable to assert that our internal control over financial reporting is effective at any time in the future, or if our independent registered
public accounting firm is unable to attest to the effectiveness of internal controls, is unable to deliver a report at all or can deliver only a
qualified report, we could be subject to regulatory enforcement and investors may lose confidence in our ability to operate in compliance
with existing internal control rules and regulations, either of which could result in a decline in our share price.
Our status as a public company may make it more difficult to attract and retain officers and directors.
The Sarbanes-Oxley Act and new rules subsequently implemented by the SEC have required changes in corporate governance
practices of public companies.  As an operating public company, we expect these new rules and regulations to increase our compliance
costs in 2009 and beyond and to make certain activities more time-consuming and costly than if we were not an operating public company.
As an operating public company, we also expect that these new rules and regulations may make it more difficult and expensive for us to
obtain director and officer liability insurance in the future, and we may be required to accept reduced policy limits and coverage or incur
substantially higher costs to obtain the same or similar coverage.  As a result, it may be more difficult for us to attract and retain qualified
persons to serve on our Board of Directors or as executive officers.
Compliance with changing regulations concerning corporate governance and public disclosure may result in additional
expenses.
There have been changing laws, regulations and standards relating to corporate governance and public disclosure, including the
Sarbanes-Oxley Act, new regulations promulgated by the SEC and rules promulgated by the NYSE AMEX LLC and other national
securities exchanges.  These new or changed laws, regulations and standards are subject to varying interpretations in many cases due to
their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and
governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing
revisions to disclosure and governance practices.  As a result, our efforts to comply with evolving laws, regulations and standards are likely
to continue to result in increased general and administrative expenses and a diversion of management time and attention from revenue-
generating activities to compliance activities.  Our board members,
22
Chief Executive Officer and Chief Financial Officer could face an
increased risk of personal liability in connection with the performance of their duties.  As a result, we may have difficulty attracting and
retaining qualified board members and executive officers, which could harm our business.  If our efforts to comply with new or changed
laws, regulations and standards differ from the activities intended by regulatory or governing bodies, we could be subject to liability under
applicable laws or our reputation may be harmed.
We do not intend to pay cash dividends.  Any return on investment may be limited to the value of our common stock, if any.
We have never declared or paid cash dividends on our capital stock (other than certain dividends that may have been paid by CKST in
or before 2005).  We currently expect to use available funds and any future earnings to develop, operate and expand our business and do
not anticipate paying any cash dividends in the foreseeable future.  In addition, the terms of any future debt or credit facility we may obtain
may preclude us from paying any dividends.  As a result, capital appreciation, if any, of our common stock will be an investor's only source
of potential gain from our common stock for the foreseeable future.
Stockholders may experience significant dilution if future equity offerings are used to fund operations or acquire complementary
businesses.
If future operations or acquisitions are financed through issuing equity securities, stockholders could experience significant dilution.  In
addition, securities issued in connection with future financing activities or potential acquisitions may have rights and preferences senior to
the rights and preferences of our common stock.  We expect to issue additional equity securities pursuant to employee benefit plans.  The
issuance of shares of our common stock upon the exercise of options may result in dilution to our stockholders.
Our Certificate of Incorporation grants our Board of Directors the power to designate and issue additional shares of common
and/or preferred stock.
Our authorized capital consists of 750,000,000 shares of common stock and 50,000,000 shares of preferred stock.  Our preferred
stock may be designated into series pursuant to authority granted by our Certificate of Incorporation, and on approval from our Board of
Directors.  The Board of Directors, without any action by our stockholders, may designate and issue shares in classes or series as the
Board of Directors deems appropriate and establish the rights, preferences and privileges of those shares, including dividends, liquidation
and voting rights.  The rights of holders of other classes or series of stock that may be issued could be superior to the rights of holders of
our common shares.  The designation and issuance of shares of capital stock having preferential rights could adversely affect other rights
appurtenant to shares of our common stock.  Furthermore, any issuances of additional stock (common or preferred) will dilute the
percentage of ownership interest of then-current holders of our capital stock and may dilute our book value per share.
23
FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus are "forward-looking statements," as that term is defined in the Private Securities Litigation
Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "may," "will," "should," "anticipate,"
"estimate," "expect," "plan," "believe," "predict," "potential," "project," "target," "forecast," "intend," "assume," "guide," "seek" and similar
expressions. Forward-looking statements do not relate strictly to historical or current matters. Rather, forward-looking statements are
predictive in nature and may depend upon or refer to future events, activities or conditions. Although we believe that these statements are
based upon reasonable assumptions, we cannot provide any assurances regarding future results. We undertake no obligation to revise or
update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future
events or otherwise.
Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and
uncertainties. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in
forward-looking statements. Information regarding our risk factors appears in "Risk Factors" beginning on page 3, which include, but
are not limited to, the following:
We will need to raise additional funds in the future to fund our operations and research, and these funds may not be available on
acceptable terms, if at all.
We expect to incur significant losses, either directly or indirectly through the companies in which we develop our products, for at least
the next several years, and we cannot assure you that we will ever be profitable.
We have a limited number of products currently available for sale and there is a high risk that our research and development efforts
might not successfully generate any viable product candidates in the future.
Cost containment measures, pressure from our competitors and availability of medical reimbursement may impact our ability to sell
our products at prices necessary to expand our operations and reach profitability.
Sales of our products will depend on the availability of adequate reimbursement from third-party payors (such as governmental
programs, for example, Medicare and Medicaid, private insurance plans and managed care programs) both in terms of the sales volumes
and prices for our products.
Legislative or administrative reforms to the United States or international reimbursement systems in a manner that significantly
reduces reimbursement for procedures using our medical devices or denies coverage for those procedures could have a material adverse
effect on our business, financial condition or results of operations.
We must convince orthopedic and spine surgeons that our products are an attractive alternative to existing surgical treatments of
orthopedic and spine disorders.
Our business plan relies on certain assumptions about the market for our products, which, if incorrect, may adversely affect our
business and profitability.
We expect to face significant competition as a result of the rapid technological changes in the medical devices industry, which could
have an adverse effect on our business, financial condition or results of operations.
Hospitals, surgeons, distributors and agents may have existing relationships with other medical device companies that make it difficult
for us to establish new relationships with them. As a result, we may not be able to sell and market our products effectively.
Our manufacturers may be unsuccessful in manufacturing products at the levels required to meet future market demand.
We rely on single source manufacturers, which could impair our ability to meet demand for delivering our products in a timely manner
or within our budget.
Our growth will depend on developing new products or product enhancements, requiring significant research and development, clinical
trials and regulatory approvals, all of which are expensive and time-consuming and may not result in a commercially viable product.
If we choose to grow our business by acquiring new and complementary businesses, products or technologies, we may be unable to
complete these acquisitions or successfully integrate them in a cost-effective and non-disruptive manner.
We rely on our independent sales distributors and sales representatives to market and sell our products.
24
We are dependent on the services of Andrew A. Brooks, M.D. and Michael Kvitnitsky, and the loss of either of them could harm our
business.
Failure to attract and retain skilled personnel and cultivate key academic collaborations will delay product development programs and
business development efforts.
If we fail to properly manage our anticipated growth, our business could suffer.
If we decide to market and sell our devices and products internationally, we would be subject to various risks relating to our
international activities, which could negatively impact our business and financial results.
We are subject to substantial governmental regulation that could change and thus force us to make modifications to how we develop,
manufacture and price our products.
Federal regulatory reforms may adversely affect our ability to sell our products profitably.
We have not yet collected long-term clinical data to support the safety of our products, and our products may, therefore, prove to be
less safe and effective than initially thought.
The FDA requires us to obtain new Section 510(k) clearances or premarket approvals for modifications to our approved products.
Otherwise, we may have to cease marketing, or to recall, the modified products until clearances are obtained.
If we or our third-party manufacturers fail to comply with the FDA's Quality System Regulations, the manufacture of our products could
be interrupted and our product sales and operating results could suffer.
We are subject to various complex laws and regulations. Compliance with these laws and regulations is costly and time- consuming,
and failure to comply with them can have adverse consequences on our business.
We are an orthopedic medical device company with a limited operating history and our business may not become profitable.
Our quarterly financial results are likely to fluctuate significantly because our sales prospects are uncertain.
If we cannot adequately protect our patents and other intellectual property rights, we may lose market share to our competitors and be
unable to operate our business profitably.
Changes to intellectual property laws may negatively impact our ability to protect our intellectual property.
Patent infringement lawsuits brought against us could have a material adverse affect on our commercial success, and our ability to
develop and sell our products and to operate profitably.
The medical device industry is characterized by patent and other intellectual property litigation, and we could become subject to
litigation that could be costly, result in diverting management's time and efforts, require us to pay damages, and/or prevent us from
marketing our existing or future products.
We may be subject to damages resulting from claims that we or our employees or consultants have wrongfully used or disclosed
alleged trade secrets of their former employers.
Fluctuations in the cost and availability of insurance could adversely affect our profitability or our risk management profile.
Potential future product liability claims and other litigation, including contract litigation, may adversely affect our business, reputation
and ability to attract and retain customers.
Any claims relating to our making improper payments to physicians for consulting services, or other potential violations of regulations
governing interactions between us and healthcare providers, could be time-consuming and costly.
Our common stock may be thinly traded.
We expect that the price of our common stock will fluctuate substantially, potentially adversely affecting the ability of investors to sell
their shares.
Securities analysts may elect not to report on our common stock or may issue negative reports that adversely affect the price of our
common stock.
Anti-takeover provisions in our charter documents and Delaware law may discourage or prevent a change in control, even if an
acquisition would be beneficial to our stockholders, which could affect our stock price adversely and prevent attempts by our stockholders
to replace or remove our current management.
Because our common stock may be a "penny stock," it may be more difficult for investors to sell shares of our common stock, and the
market price of our common stock may be adversely affected.
A significant number of shares will become eligible for future sale by our stockholders and the sale of those shares could adversely
affect the stock price.
25
Directors, executive officers, principal stockholders and affiliated entities own a significant percentage of our capital stock, and they
may make decisions that you do not consider to be in the best interests of our stockholders.
Our stock price could decline as a result of our failure to meet reporting and other regulatory requirements.
If we do not implement necessary improvements to our internal control over financial reporting in an efficient and timely manner, or if
we discover additional deficiencies and weaknesses in existing systems and controls, we could be subject to regulatory enforcement and
investors may lose confidence in our ability to operate in compliance with existing internal control rules and regulations, either of which
could result in a decline in our share price.
Our status as a public company may make it more difficult to attract and retain officers and directors.
Compliance with changing regulations concerning corporate governance and public disclosure may result in additional expenses.
We do not intend to pay cash dividends. Any return on investment may be limited to the value of our common stock, if any.
Stockholders may experience significant dilution if future equity offerings are used to fund operations or acquire complementary
businesses.
Our Certificate of Incorporation grants our Board of Directors the power to designate and issue additional shares of common and/or
preferred stock.
Additional information concerning these risk factors can be found in "Risk Factors" beginning on page 3. Forward-looking
statements in this prospectus should be evaluated in light of these important factors.
USE OF PROCEEDS
We are registering theses shares pursuant to registration rights granted to the selling stockholders.  We are not selling any
securities under this prospectus and we will not receive any proceeds from the sale by the selling stockholders of their common stock. If
and when the placement agent exercises any placement agent warrants, we will receive the amount of the exercise price unless the
warrants are exercised on a cashless basis. The Placement Agent Warrants are for the purchase of 575,613 shares of the Company's
common stock, the number that is equivalent to six percent (6%) of the number of shares of common stock sold in the transaction to
Approved Investors, at an exercise price of $0.44 per share.  If all of the Placement Agent Warrants are exercised, the Company would
receive approximately $253,270 in cash, unless any of the Placement Agent Warrants are exercised on a cashless basis.  We expect that
any proceeds which we receive from the exercise of the Placement Agent Warrants will be used for working capital and general corporate
purposes.
DILUTION
The common stock to be sold by the selling stockholders is common stock that is currently issued and outstanding.  Accordingly,
there will be no dilution to our existing stockholders in connection with the offer and sale by the selling stockholders of common stock
currently issued and outstanding.
However, 575,613 shares of common stock underlying the placement agent warrants are also being registered pursuant to this
registration statement.  Such shares are not currently issued and outstanding.  If any of the placement agent warrants to purchase 575,613
shares of common stock are exercised, our stockholders may experience a reduction in their ownership interest in the Company, however
such reduction would not be material.
SELLING STOCKHOLDERS
Except as otherwise indicated, the following table sets forth certain information with respect to the beneficial ownership of our
common stock including the names of the selling stockholders, the number of shares of common stock known by the Company to be owned beneficially by the selling
stockholders as of December 14, 2009, the number of shares of our common stock that may be offered by the selling stockholders
pursuant to this prospectus, the number of shares owned by the selling stockholders after completion of the offering and the percentage of
shares to be owned by the selling stockholders after completion of the offering.  Except for Frost Gamma Investments Trust, the Company knows of no selling stockholder that
26
will own more than 1% of our outstanding common stock after the sale of shares owned by such selling stockholder. After
completion of the sale of the shares owned by Frost Gamma Investments Trust and offered by this prospectus, Frost Gamma Investments
Trust would beneficially own 31,822,339 shares of common stock, representing 13.82% of our outstanding common stock, assuming no
warrants are exercised by the placement agent, and 13.78% of the common stock, assuming all of the warrants held by the placement
agent are exercised.  The table has been prepared based upon a review of
Exchange Act filings related to the Company and additional
information furnished to us by or on behalf of the selling stockholders.
Name of Selling Stockholder
Shares of
Stock Owned
Prior to
Offering
Shares of
Stock to be
Offered for
the Selling
Stockholder's
Account
Shares of
Stock to be
Owned by
the Selling
Stockholder
After
Completion
of the
Offering
Percent of
the Common
Stock to be
Owned by the
Selling
Stockholder
After
Completion
of the
Offering
Alan Mandel
95,000
95,000
0
0.00%
Alan Mandel
285,714
285,714
0
0.00%
Andrew Moon
142,857
142,857
0
0.00%
Barry Fine
100,000
100,000
0
0.00%
Bassan Investments LLC
100,000
100,000
0
0.00%
Benjamin Kaminash
285,714
285,714
0
0.00%
Bruce Pollack
2,073,043
71,428
2,001,615
(1)
*
Canyon State Masonry Inc
142,857
142,857
0
0.00%
Chanel Gold Enterprise
100,000
100,000
0
0.00%
Charles David Stadterman
100,000
100,000
0
0.00%
Matthew Coffin TR UA 10/07/08 Coffin Family Trust
1,428,571
1,428,571
0
0.00%
Cyrus Hadidi
750,000
750,000
0
0.00%
David C Blatte
2,073,043
71,428
2,001,615
(1)
*
David Mittler
57,142
57,142
0
0.00%
David H Shepard TR UA 01/02/02 David Haspel Shepard Rev Liv Trust
285,714
285,714
0
0.00%
David Thalheim
100,000
100,000
0
0.00%
Dominguez Investments
142,857
142,857
0
0.00%
Donald S Shepard
142,857
142,857
0
0.00%
Joseph S. Levy TR UA 06/17/98 Dr Joseph S Levy Rev Liv Trust
71,428
71,428
0
0.00%
Ed Baroody
57,142
57,142
0
0.00%
Edward C Gomez
142,857
142,857
0
0.00%
Frost Gamma Investments Trust
33,250,911
1,428,572
31,822,339
13.82%
George & Son Partners 2008-1 LLP
94,285
94,285
0
0.00%
Gilbert Hooper & Danielle Hooper JT TEN
71,428
71,428
0
0.00%
Glenn Marshak
71,428
71,428
0
0.00%
Gregory Schroeder & Silvia Schroeder TR UA 05/10/05 Gregory & Silvia Schroeder
Fam Trust
85,714
85,714
0
0.00%
Hank Yunes & Marci Yunes JT TEN
100,000
100,000
0
0.00%
Hugo Reiter & Arlene Reiter JT TEN
300,000
300,000
0
0.00%
Ingrid K Pelerin TR UA 09/13/96 Ingrid K Pelerin Rev Liv Trust
71,428
71,428
0
0.00%
Ira Levy
71,428
71,428
0
0.00%
J & C Johnstone Family Limited Partnership
100,000
100,000
0
0.00%
27
Jack Parks
57,142
57,142
0
0.00%
Jacqueline Simkin TTEE Amended & Restated DTD 12/16/03 Jacqueline Simkin
Trust
2,545,510
285,714
2,259,796
*
James J Bischoff & Lucinda G Bischoff TR UA 02/02/87 James & Lucinda Bischoff Fam
Liv Trust
71,428
71,428
0
0.00%
Jason Hirzel & Kelly Hirzel JT TEN
285,714
285,714
0
0.00%
Jay R Flackoff
30,000
30,000
0
0.00%
Jay G Goldman
142,857
142,857
0
0.00%
Irv Goldman TR UA 04/24/95 Jay Goldman & Stephanie Goldman Irrev Trust
142,857
142,857
0
0.00%
Jiansheng Zhao
100,000
100,000
0
0.00%
Jim Miller
100,000
100,000
0
0.00%
Joe Hadden
100,000
100,000
0
0.00%
John Ritchie & Christine Ritchie JT TEN
285,714
285,714
0
0.00%
John Radtke
100,000
100,000
0
0.00%
Jorge Wolf
300,000
300,000
0
0.00%
Josh Berman
142,857
142,857
0
0.00%
Joshua Mandel
100,000
100,000
0
0.00%
Lester Pollack
2,073,043
71,428
2,001,615
(1)
*
Lonnie Ogulnick & Dara Ogulnick JT TEN
57,142
57,142
0
0.00%
Louis Olivia and Stacy Olivia JT TEN
100,000
100,000
0
0.00%
Michael Sinel
142,857
142,857
0
0.00%
Mike Miller
71,428
71,428
0
0.00%
Next View Capital LP
857,143
857,143
0
0.00%
Paul Musschoot
100,000
100,000
0
0.00%
Phillip George & Daughter Partners 2008-1 LLP
94,285
94,285
0
0.00%
Phillip T George
458,707
97,142
361,565
*
Portal Ventures LLC
2,000,000
2,000,000
0
0.00%
Richard Paz & Dalit Paz JT TEN
57,142
57,142
0
0.00%
Richard J Rosenstock
100,000
100,000
0
0.00%
Richard Paul Yurich  TR UA 06/11/08 The Richard Paul Yurich Rev Liv Trust
285,714
285,714
0
0.00%
Rick Miner
100,000
100,000
0
0.00%
Robert Margolis & Elizabeth Margolis JT TEN
285,714
285,714
0
0.00%
Robert Bergmann
2,073,043
71,428
2,001,615
(1)
*
Robert H Hartley
142,857
142,857
0
0.00%
Robert Halm
57,142
57,142
0
0.00%
Robert Sudack
40,000
40,000
0
0.00%
Scoggin Capital Management LP II
1,428,571
1,428,571
0
0.00%
Scoggin International Fund Ltd
1,428,571
1,428,571
0
0.00%
Shari Notowitz
71,428
71,428
0
0.00%
Tevis Margolis
71,428
71,428
0
0.00%
VED Software Services
28,571
28,571
0
0.00%
Virginia Myers & Ernie Myers JT TEN
285,714
285,714
0
0.00%
Wendy F Lumish
100,000
100,000
0
0.00%
W R Everett & Kathleen Everett JT TEN
100,000
100,000
0
0.00%
Yukiyo Matsumura & Machi Liu JT TEN
200,000
200,000
0
0.00%
Ladenburg Thalmann & Co. Inc.
575,613
575,613
0
0.00%
28
*   Less than 1%.
(1)   The stockholder is a member of CP Cardio LLC which owns 2,001,615 shares of the Company.
__________
None of the selling stockholders has, or within the past three years has had, any position, office or material relationship with us or any
of our predecessors or affiliates except as follows:
In consideration for investment banking services rendered to us by Ladenburg Thalmann & Co. Inc. ("Ladenburg"), as
placement agent for the private placement offering, we issued to Ladenburg warrants to purchase 575,613 shares of the Company's
common stock, a number of shares that is equivalent to six percent (6%) of the number of shares of common stock sold in the private
placement to Approved Investors, at an exercise price of $0.44 per share. The services rendered by Ladenburg included serving as
financial advisor to the Company in connection with raising equity and equity related capital for the Company.  The warrants have an
exercise price of $0.44 per share and a term of five years.
Frost Gamma Investments Trust is a 10% owner of the Company.  Frost Gamma Investments Trust owned 33,250,911 shares of
common stock of the Company prior to the offering.  The Company sold  1,428,572 shares of common stock of the Company for the
account of Frost Gamma Investments Trust.  Frost Gamma Investments Trust owns 31,822,339 shares of common stock or 13.78%
percent of the Company after completion of the offering.
Lonnie Ogulnick owns stock in the Company as Lonnie Ogulnick & Dara Ogulnick JT TEN.  Lonnie Ogulnick is a registered financial
advisor with Ladenburg and Managing Director of Ladenburg Thalmann Private Client Services.
Richard Rosenstock owns stock in the Company as Richard J Rosenstock.  Richard Rosenstock is a registered broker with Ladenburg
and a director of Ladenburg Thalmann Financial Services.
PLAN OF DISTRIBUTION
We are registering the shares of common stock to permit the resale of these shares of common stock by the holders of the
common stock from time to time after the date of this prospectus.  However, we will receive gross proceeds of up to approximately
$253,270 from the issuance of shares of common stock being registered pursuant to the registration statement of which this prospectus
forms a part in connection with the exercise of the placement agent warrants, if and when they are exercised, unless such warrants are
exercised on a cashless basis.  We will not receive any of the proceeds from the sale by the selling stockholders of the shares of common
stock.  We will bear all fees and expenses incident to our obligation to register the shares of common stock.
The selling stockholders may sell all or a portion of the shares of common stock beneficially owned by them and offered hereby from
time to time directly or through one or more underwriters, broker-dealers or agents.  If the shares of common stock are sold through
underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent's
commissions.  The shares of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time
of the sale, at varying prices determined at the time of sale, or at negotiated prices.  These sales may be effected in transactions, which
may involve crosses or block transactions,
on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;
in the over-the-counter market;
in transactions otherwise than on these exchanges or systems or in the over-the-counter market;
through the writing of options, whether such options are listed on an options exchange or otherwise;
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
29
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
an exchange distribution in accordance with the rules of the applicable exchange;
privately negotiated transactions;
sales pursuant to Rule 144;
broker-dealers may agree with the selling securityholders to sell a specified number of such shares at a stipulated price per
share;
a combination of any such methods of sale; and
any other method permitted pursuant to applicable law.
If the selling stockholders effect such transactions by selling shares of common stock to or through underwriters, broker-dealers or
agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from
the selling stockholders or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they
may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in
excess of those customary in the types of transactions involved).  In connection with sales of the shares of common stock or otherwise, the
selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of
common stock in the course of hedging in positions they assume.  The selling stockholders may also sell shares of common stock short
and deliver shares of common stock covered by this prospectus to close out short positions and to return borrowed shares in connection
with such short sales.  The selling stockholders may also loan or pledge shares of common stock to broker-dealers that in turn may sell
such shares.
The selling stockholders may pledge or grant a security interest in some or all of the shares of common stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common
stock from time to time pursuant to this prospectus or any amendment to this prospectus under applicable provisions of the Securities Act
of 1933, as amended, amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus.  The selling stockholders also may transfer and donate the shares of common stock
in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.
The selling stockholders and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be
"underwriters" within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to,
any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act.  At the time a particular
offering of the shares of common stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate
amount of shares of common stock being offered and the terms of the offering, including the name or names of any broker-dealers or
agents, any discounts, commissions and other terms constituting compensation from the selling stockholders and any discounts,
commissions or concessions allowed or reallowed or paid to broker-dealers.
Under the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed
brokers or dealers.  In addition, in some states the shares of common stock may not be sold unless such shares have been registered or
qualified for sale in such state or an exemption from registration or qualification is available and is complied with.
30
There can be no assurance that any selling stockholder will sell any or all of the shares of common stock registered pursuant to this
registration statement, of which this prospectus forms a part.
The selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange
Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholders and any other
participating person.  Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to
engage in market-making activities with respect to the shares of common stock.  All of the foregoing may affect the marketability of the
shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common
stock.
We will pay all expenses of the registration of the shares of common stock pursuant to the registration rights agreement, estimated to
be $70,624 in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state
securities or "blue sky" laws; provided, however, that a selling stockholder will pay all underwriting discounts and selling
commissions, if any.  We will indemnify the selling stockholders against liabilities, including some liabilities under the Securities Act, in
accordance with the registration rights agreements, or the selling stockholders will be entitled to contribution.  We may be indemnified by
the selling stockholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information
furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the related registration rights
agreement, or we may be entitled to contribution.
Once sold under this registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable
in the hands of persons other than our affiliates.
The Company appointed Ladenburg as the Company's exclusive placement agent for the private placement offering.  There is a
common principal stockholder of both the Company and of Ladenburg.  Furthermore, certain senior managers of the placement agent are
stockholders of the Company.  After reviewing all information related to the transaction between the Company and Ladenburg, a potential
related party transaction, the Company's Audit Committee approved the related party transaction.  Ladenburg, as the placement agent, for
acting in such capacity for the shares of common stock offered in the private placement offering, received: (i) a cash commission equal to
eight percent (8%) of the gross proceeds from the offering that was received from Approved Investors; (ii) a cash non-accountable expense
allowance equal to one percent (1%) of the gross proceeds of the offering to Approved Investors; (iii) reimbursement of Ladenburg's
out-of-pocket expenses related to the offering, including its legal fees and expenses up to $40,000; and (iv) the issuance to Ladenburg of
warrants to purchase 575,613 shares of common stock equal to six percent (6%) of the number of shares sold in the offering to Approved
Investors, at an exercise price of $0.44 per share.
DESCRIPTION OF SECURITIES TO BE REGISTERED
Our authorized capital stock consists of 750,000,000 shares of common stock, with a par value of $0.001 per share and
50,000,000 shares of preferred stock.
Common Stock
As of December 14, 2009, there were 230,293,141 shares of our common stock issued and outstanding, held by 261 stockholders
of record.  Holders of common stock are entitled to (i) one vote for each share at all meetings of stockholders, (ii) receive, subject to the
prior rights of holders, if any, of outstanding stock having prior rights as to dividends, dividends as may be declared by the Board of
Director, and (iii) subject to the prior rights of holders, if any, of outstanding stock having prior rights as to asset distributions, our remaining
assets upon liquidation, dissolution or winding up of our company. The holders of common stock have no preemptive or other subscription
or conversion rights. There are no redemption or sinking fund provisions applicable to the common stock. All shares of common stock now
outstanding are fully paid and nonassessable.
31
In conjunction with first tranche and the second tranche of the private placement that closed on October 27, 2009 and November 13,
2009 respectively, Cardo Medical, Inc. issued to the placement agent warrants to purchase 575,613 shares of the Company's common
stock, at an exercise price of $0.44 per share.  The Placement Agent Warrants expire on November 13, 2014.  The shares of the
Company's common stock underlying the Placement Agent Warrants are being registered under the registration statement of which this
prospectus constitutes a part.
Preferred Stock
As of December 14, 2009, there were no shares of our preferred stock currently issued and outstanding.
Our Certificate of Incorporation and Bylaws contain provisions that could delay or prevent a change in control of our Company or
changes in our Board of Directors that our stockholders might consider favorable.  Some of these provisions:
impose limitations on our stockholders to call special stockholder meetings; and
authorize the issuance of preferred stock which can be created and issued by the Board of Directors without prior stockholder
approval, with rights senior to those of the common stock.
In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit certain
business combinations with stockholders owning 15% or more of our outstanding voting stock.  These and other provisions in our
Certificate of Incorporation, our Bylaws and Delaware law could make it more difficult for stockholders or potential acquirers to obtain
control of our Board of Directors or initiate actions that are opposed by our then-current Board of Directors, including to delay or impede a
merger, tender offer or proxy contest involving our Company.  Any delay or prevention of a change in control transaction or changes in our
Board of Directors could cause the market price of our common stock to decline.
Our common stock is quoted on the OTC Bulletin Board under the trading symbol "CDOM.OB".
INTERESTS OF NAMED EXPERTS AND COUNSEL
None
INFORMATION WITH RESPECT TO THE REGISTRANT
Description of Business
The following business description should be read in conjunction with the consolidated financial statements and notes thereto
appearing elsewhere in this registration statement.
Organization
Overview
Cardo Medical, Inc. ("Cardo" or the "Company") is an orthopedic medical device company specializing in designing,
developing and marketing high performance reconstructive joint devices and spinal surgical devices. Reconstructive joint devices are used
to replace knee, hip and other joints that have deteriorated through disease or injury. Spinal surgical devices involve products to stabilize
the spine for fusion and reconstructive procedures. Within these areas, Cardo intends to focus on the higher-growth sectors of the
orthopedic industry, such as advanced minimally invasive instrumentation and bone-conserving high-performance implants. Cardo is
focused on developing surgical devices that will enable surgeons to bridge the gap between soft tissue-driven sports medicine techniques
and classical reconstructive surgical procedures. Cardo commercializes its reconstructive joint devices through its Cardo Orthopedics
division and its spine devices through its Cardo Spine division.
32
In December 2006, Cardo initiated sales of the Align 360 unicompartmental knee device, a partial knee resurfacing device for the
medial or lateral part of the knee. Cardo has received approval under Section 510(k) of the Federal Food, Drug and Cosmetic Act ("Section
510(k)") for its uniquely instrumented patello-femoral arthroplasty, a resurfacing device for the back of the kneecap and distal femur. Cardo
has also received FDA 510k approval for its Total Knee System which has both a posterior cruciate sacrificing as well as a posterior
cruciate sparing component design. Cardo has also received FDA 510k approval for its total hip replacement system along with its
monopolar and bipolar hip systems. Cardo received Section 510(k) approvals for its spinal lumbar fusion system and its cervical plate and
screw systems. Cardo is actively engaged in a number of highly innovative research and development projects for total knee arthroplasty,
spinal motion preservation, fusion devices and minimally invasive approaches for treating an array of joint and spinal disorders.
As of December 14, 2009, Cardo employed 20 full-time employees.
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics which is applicable to all of our employees, officers and directors (including
our principal executive officer, principal financial officer and principal accounting officer). A copy of the Code of Business Conduct and
Ethics is available on the Company's website at www.cardomedical.com.
Recent Transactions
Cardo Medical, LLC ("Cardo LLC") was formed on April 6, 2007 as a California limited liability company for the purpose of
acquiring an interest in the medical device business conducted by Accin Corporation directly and through Accin's interests in Cervical
Xpand, LLC and Uni-Knee, LLC. Following Cardo LLC's organization:
Cardo LLC and Accin formed a Delaware limited liability company on April 20, 2007 under the name Accelerated Innovation, LLC;
On May 21, 2007, Accin contributed substantially all of its business, properties and assets, including its majority interests in Cervical
Xpand and Uni-Knee, to Accelerated Innovation in exchange for a 62.5% interest in Accelerated Innovation and the distribution referenced
below in the amount of $3.75 million;
Concurrently with the above, on May 21, 2007, Cardo LLC contributed $3.75 million to Accelerated Innovation in exchange for a
37.5% interest in Accelerated Innovation; and
The amount of $3.75 million was distributed by Accelerated Innovation to Accin.
Under the terms of Accelerated Innovation's Limited Liability Company Agreement, Cardo LLC was granted an option to purchase
the 62.5% interest in Accelerated Innovation held by Accin for a purchase price of $6.25 million. Following the exercise of that option in
June 2008, Cardo LLC acquired all of the interests in Accelerated Innovation held by Accin, and Accelerated Innovation became a
wholly-owned subsidiary of Cardo LLC.
Prior to that, in February 2008, Cardo LLC entered into Membership Interest Purchase Agreements with the holders of the minority
membership interests in Cervical Xpand and Uni-Knee. Cervical Xpand and Uni-Knee were formed as New Jersey limited liability
companies on July 12, 2005 and May 10, 2006, respectively, for the purpose of conducting research and development activities. Prior to
the closing of the transactions contemplated by the Membership Interest Purchase Agreements, Accelerated Innovation, as the assignee of
Accin's assets, owned 52.083% of the membership interests in Cervical Xpand and 51.21% of the membership interests in Uni-Knee, and
the minority holders held the remaining outstanding interests. Upon the closing of the transactions contemplated by the Membership
Interest Purchase Agreements, in June 2008, Cardo LLC acquired the outstanding membership interests from the minority holders for an
aggregate purchase price of $1,437,510 for the Cervical Xpand interests and $2,049,180 for the Uni-Knee interests. As a result, Cardo LLC
owned all of the interests in Cervical Xpand and Uni-Knee directly and indirectly through its ownership of Accelerated Innovation.
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On June 18, 2008, Cardo LLC entered into a Merger Agreement and Plan of Reorganization with clickNsettle.com, Inc. ("CKST") and
Cardo Acquisition, LLC, a California limited liability company and wholly-owned subsidiary of CKST. Upon the consummation of the
transactions contemplated by the Merger Agreement, CKST acquired Cardo LLC through a merger of Cardo LLC with Cardo Acquisition,
with Cardo LLC continuing as the surviving entity in the Merger and a wholly-owned subsidiary of CKST. Pursuant to the Merger
Agreement, all of the issued and outstanding units of Cardo LLC's membership interests were converted into the right to receive shares of
the common stock of CKST.
On or about the signing of the Merger Agreement, Frost Gamma Investments Trust and other investors invested $12.975 million in
Cardo LLC in exchange for units of Cardo LLC's membership interests. Dr. Phillip Frost, Chairman and Chief Executive Officer of Opko
Health, Inc., is the trustee and beneficiary of Frost Gamma Investments Trust. Cardo LLC used approximately $9.7 million of the proceeds
from these investments to close on the acquisition of the outstanding equity interests of three partially owned subsidiaries of Cardo LLC
(Accelerated Innovation, LLC, Cervical Xpand, LLC and Uni-Knee, LLC), to repay an existing member loan (in the amount of $1.2 million)
and for transaction expenses, and used the remaining funds to accelerate its research and product development.
Under the terms of the Merger Agreement, at the closing of the Merger, each Cardo LLC unit of membership interest issued and
outstanding was converted into and exchanged for the right to receive 667,204.70995 shares of common stock of CKST. As a result of the
Merger, CKST's stockholders and optionholders owned approximately 5.5% of the combined company on a fully diluted basis (or
11,298,979 shares of common stock outstanding and underlying options), the members of Cardo LLC, excluding the new investors, owned
approximately 64.8% of the combined company on a fully diluted basis (or 133,440,942 shares of common stock), the new investors
owned approximately 28.5% of the combined company on a fully diluted basis (or 58,641,701 shares of common stock), and optionholders
of Cardo LLC owned approximately 1.2% of the combined company on a fully diluted basis (or 2,398,400 shares of common stock
underlying those options).
Following the closing of the Merger, each of Cervical Xpand, Uni-Knee and Accelerated Innovation merged with and into Cardo
Medical, LLC, which is now the sole subsidiary of the Company and Cardo LLC converted into a Delaware limited liability company.
On June 30, 2009, Cardo completed the first tranche of a private placement with investors to purchase 8,689,319 shares of Cardo's
common stock, par value $0.001 per share, at a price of $0.35 per share for gross proceeds of $3,041,260.  The common shares sold
under this private placement have a 24-month lock up provision.  The second tranche of this private placement closed on September 21,
2009 with the purchase of 485,714 shares of Cardo's common stock for gross proceeds of $170,000.
On October 27, 2009 and November 13, 2009, Cardo completed another private placement with investors to purchase an aggregate of
17,757,837 shares of Cardo's common stock, par value $0.001 per share, at a price of $0.35 per share for gross proceeds of
$6,215,250.
Proceeds from these two private placements allowed us sufficient working capital to build inventory and instrumentation in order to
meet anticipated levels needed to expand our sales and to acquire substantially all of the assets of Vertebron, Inc.
("Vertebron").
Vertebron, a spinal implant device company located in Stratford, CT, designs, develops, manufactures and sells spinal implant
products focused on fusion technology for the lumbar and cervical spine as well as motion preservation technologies.  Cardo purchased all
of Vertebron's inventory and fixed assets and will retain 100% ownership of all Vertebron's implant technologies for spinal surgery.  We
also acquired all intellectual property rights owned by Vertebron which includes 20 U.S. issued patents and patent applications.  Through a
previous licensing agreement, Cardo currently markets and distributes the PSS Pedicle Screw and SCP Cervical Plate systems.  The
Vertebron transaction will allow for Cardo to expand its existing domestic distribution.  On April 21, 2009, Vertebron filed for Chapter 11
bankruptcy protection in the District of Connecticut.  The acquisition is the result of a Chapter 11 auction process, approved by the United
States Bankruptcy Court for the District of Connecticut.
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We are headquartered in Beverly Hills, California. In connection with the consummation of the Merger, CKST approved through its
stockholders an amendment to its Amended and Restated Certificate of Incorporation to change its name from "clickNsettle.com, Inc." to
"Cardo Medical, Inc." CKST's trading symbol was "CKST.OB," which has changed to "CDOM.OB" in connection with the name change.
Cardo Medical's common stock is quoted on the National Association of Securities Dealers, Inc.'s, Over-the-Counter Bulletin Board, or the
OTC Bulletin Board.
At December 14, 2009, we had approximately $4,956,000 in cash; however, in October 2009 we used $1,170,000 in order to complete
the Vertebron, Inc. transaction and raised net proceeds of approximately $5,871,000 through a private placement.  With this subsequent
net cash infusion, the available funds are still not projected to meet all of our working capital needs for the next twelve months.  The fact
that we will sustain losses through the remainder of 2009 and the first two quarters of 2010, and may still require outside sources of
additional capital to supplement operations continues to create an uncertainty about our ability to continue as a going concern.
Management intends to use borrowings and securities sales to mitigate the effects of our use of that cash. However, we cannot assure
you that debt or equity financing, if and when required, will be available. Our ability to continue as a going concern is dependent upon
receiving additional funds either through the issuance of debt or through common and/or preferred stock and the success of management's
plan to expand sales. Although we may obtain external financing through the sales of our own securities, there can be no assurance that
such financing will be available, or if available, that any such financing would be on terms acceptable to us. If we are unable to fund our
cash flow needs, we may have to reduce or stop planned growth or scale back operations and reduce staff.
Nature of Business
The Company develops and distributes reconstructive orthopedic and spinal surgery products to various medical organizations. The
Company works in small, focused development teams in conjunction with physicians to rapidly develop products from conception to
launch. The Company launched and commenced sales of its first product in late 2006, which was a high-performance, uni-compartmental
knee replacement. The Company commenced sales of its reconstructive products in 2007 and spine products in 2008.
Products
Following is a listing of our current products:
Knee Portfolio
Align 360 Unicompartmental Knee System - A uniquely instrumented high performance partial knee replacement that allows
resurfacing of either the medial or lateral compartments of the knee. This product promotes the consistent balancing of the flexion and
extension gaps for unicompartmental knee surgery.
Align 360 Patellofemoral System - A uniquely instrumented and novel patellofemoral system that allows resurfacing of the
patellofemoral joint. This product is an anatomic system that addresses the disease of the patellofemoral joint.
Align 360 Total Knee System - A uniquely instrumented high performance total knee system consisting of posterior-stabilized and
cruciate retaining femoral components
Hip Portfolio
Accin Total Hip System - A taperloc type of hip system that allows replacement of the ball and socket of the hip joint. This product
offers a dual taper hip design for total hip arthroplasty complemented by the Accin Bipolar and Monopolar Hip Systems for hip fracture
applications.
Accin Bipolar Hip System - A bipolar hip that allows replacement of the ball of the hip for either fracture, tumors or reconstruction from
some other type of pathology.
Accin Monopolar Hip System - A monopolar hip that allows replacement of the ball of the hip from either fracture, tumors or
reconstruction from some other type of pathology.
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Spinal Product Line
Accin Lumbar Pedicle Screw/Rod System - A pedicle screw and rod system for instrumentation of lumbar spine fusion incorporating
an evolutionary locking mechanism allowing for high screw angulation.
Accin Cervical Plate/Screw System - An innovative low-profile system for cervical spine fusion incorporating an integrated, floating
tapered-ring locking mechanism to simplify surgical procedure.
Our products listed above have received Section 510(k) approval. We have a number of earlier stage research and development
projects underway, some of which have received Section 510(k) approval and others that may be submitted for regulatory approval in the
future.
Orthopedic Industry
According to the 2007-2008 Orthopaedic Industry Annual Report published by Knowledge Enterprises, Inc., which we refer to herein as
the Industry Annual Report, the worldwide market for orthopedic products in 2007 was estimated to be $32.5 billion, representing an 11.8%
increase from the previous year. According to this report, bone and joint diseases account for half of all the chronic conditions in people
over 50 years of age. With the predicted doubling of the aged population by the year 2020, the report suggests that demographics alone
will drive growth in the global orthopedic industry. We also believe that the orthopedic industry will continue to grow due to an increasingly
older population and extended life spans in the United States and other developed countries worldwide.
According to the Industry Annual Report, the world's six largest replacement companies-Zimmer, Johnson & Johnson, Stryker,
Smith & Nephew, Biomet and Wright Medical-generated 89% of joint product sales in 2007. We believe that the size of these
companies often leads them to concentrate their marketing and research and development efforts on products that they believe will have a
relatively high minimum threshold level of sales. As a result, there is an opportunity for a smaller orthopedic company, such as us, to focus
on smaller, higher-growth sectors of the orthopedic market, while still offering a comprehensive product line to address the needs of its
customers in a customized and interactive fashion.
Orthopedic devices are commonly divided into several primary sectors corresponding to the major subspecialties within the orthopedic
field: reconstruction, trauma, arthroscopy, spine and biologics. Management's initial focus is on innovation related to reconstructive joint
devices and spinal products, as discussed below.
Reconstructive Joint Device Market
Most reconstructive joint devices are used to replace or repair joints that have deteriorated as a result of disease or injury. Despite the
availability of non-surgical treatment alternatives such as oral medications, injections and joint fluid supplementation of the knee, severe
cases of disease or injury often require reconstructive joint surgery.
Reconstructive joint surgery involves modifying the bone area surrounding the affected joint and inserting one or more manufactured
components, and also may involve using bone cement.
The reconstructive joint device market is generally divided into the areas of hips, knees and extremities. According to the Industry
Annual Report, it is estimated that the worldwide reconstructive joint device market had sales of approximately $11.6 billion in 2007,
with hip reconstruction and knee reconstruction representing the largest sectors.
Knee Reconstruction.
The knee joint involves the surfaces of three distinct bones: the lower end of the femur, or thigh bone, the
upper end of the tibia, or shin bone, and the patella, or kneecap. Cartilage on any of these surfaces can be damaged due to disease or
injury, leading to pain and inflammation requiring knee reconstruction. According to the Industry Annual Report, knee reconstruction was
the largest sector of the reconstructive joint device market in 2007, with estimated sales of approximately $5.9 billion worldwide.
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One of the major trends in knee reconstruction includes the use of minimally invasive techniques to accomplish reconstructive goals
with less damage to surrounding soft tissues. Our unicompartmental device has been designed to be inserted through small incision
surgery with an innovative instrumentation approach. Our design approach was to develop an innovative instrumentation system to
improve and simplify surgical technique for a clinically proven implant concept. We believe that our system allows the surgeon to simply
and reproducibly balance both flexion and extension gaps. This is a general approach we plan to continue with our other products.
Hip Reconstruction.
The hip joint is a ball-and-socket joint that enables the large range of motion that the hip performs in daily
life. The hip joint is most commonly replaced due to degeneration of the cartilage between the head of the femur (the ball) and the
acetabulum or hollow portion of the pelvis (the socket). This degeneration causes pain, stiffness and a reduction in hip mobility. According
to the Industry Annual Report, it is estimated that the worldwide hip reconstruction market had sales of approximately $5.1 billion in
2007.
Similar to the knee reconstruction market, major trends in hip replacement procedures and implants are to extend implant life and to
preserve bone stock for possible future procedures. New products have been developed that incorporate advances in bearing surfaces
from the traditional polyethylene surface. These alternative bearing surfaces include metal-on-metal, cross-linked polyethylene and
ceramic-on-ceramic combinations, which exhibit improved wear characteristics and lead to longer implant life. In addition to advances in
bearing surfaces, implants that preserve more natural bone have been developed in order to minimize surgical trauma and recovery time
for patients. These implants, known as bone- conserving implants, leave more of the hip bones intact, which may be beneficial given the
likelihood of future revision replacement procedures as the average patient's lifetime increases. Bone-conserving procedures are intended
to enable patients to delay their first total hip procedure and may significantly increase the time from the first procedure to the time when a
revision replacement implant is required. Our hip product portfolio, currently consisting of three products, is focused on improving the
surgical techniques for bone-conservative procedures. These products integrate implant designs that are based on predicate devices (i.e.,
a device with a similar design that has already received clearance) with successful long-term clinical histories. We are actively engaged in
several research and development efforts to develop better instrumentation for less traumatic surgeries, improved component designs and
bearing surfaces to increase longevity of our devices.
Spine Market
Back and neck pain is one of the leading causes of healthcare expenditures in the United States, with a direct cost of approximately
$86 billion annually for diagnosis, treatment and rehabilitation, according to an article published in The Journal of the American Medical
Association (published February 13, 2008). According to the Industry Annual Report, the U.S. market for lumbar and cervical spine fusion,
which is the focus of our spinal business, was estimated to be over $3 billion in 2006 and over $3.6 billion in 2007, and is estimated to grow
to more than $4.2 billion in 2008.
The spine consists of vertebrae, which are 29 separate bones connecting the skull to the pelvis. The vertebrae are joined together by
soft tissue structures that provide the core of the human skeleton. Within the spinal column, the spinal cord, which is the body's central
nerve pathway, is protected by the bony parts of the vertebrae. Nerves contained in the spinal column exit through the foramen openings to
the rest of the body. Vertebrae are joined to each other in pairs which are often referred to as motion segments. These motion segments
move by means of three joints: two facet joints and one spine disc. The facet joints provide stability and enable the spine to bend and twist
while the discs absorb pressures and shocks to the vertebrae.
The four major categories of spine disorders are degenerative conditions, deformities, trauma and tumors. The largest market, and the
focus of our spinal research and development business, is degenerative conditions of the facet joints and disc space. These conditions can
result in instability and pressure on the nerve roots as they exit the spinal column, causing back pain or radiating pain in the arms or
legs.
The recommended treatments for spine disorders depend on the severity and duration of the disorder. Initially, physicians will
prescribe non-operative procedures, including bed rest, bracing, medication, lifestyle modification, exercise, physical therapy, chiropractic
care and steroid injections. In most cases, non-surgical treatment options are effective; however, many patients do not respond to
non-operative treatments and require spine surgery to alleviate their symptoms.
37
It is estimated that in excess of one million patients undergo spine surgery each year in the United States. The most common spine
surgery procedures are: discectomy, which consists of the removal of all or part of a damaged disc; laminectomy, the removal of all or part
of a lamina, or thin layer of bone, to relieve pinching of the nerve and narrowing of the spinal canal; and fusion, where two or more
adjoining vertebrae are fused together to provide stability. All three of these procedures require access to the spine through either a
traditional open approach or through smaller, less invasive methods using various types of retractors or other percutaneous
techniques.
We believe that the implant market for spine surgery procedures will continue to grow because of the following market dynamics:
Demographics.
The population cohort most likely to experience back pain is likely to grow as a result of our aging baby boomer
population. The first baby boomers turned 62 in 2008, and over the next two decades we will see a substantial increase in our aging
population. We believe that this generation of older people is less willing to compromise on reducing activity levels and is more interested
in treatments that will allow a more rapid return to activities with shorter periods of disability.
Increased Acceptance of Implants.
The implementation of implants for use in spine surgery has become the standard of care
over the past decade. In the last five years, there has been a substantial and significant increase in the percentage of spinal fusion
surgeries using implants. According to Millennium Research Group, an estimated 85% or more of all spinal fusion procedures involve an
implant. The current generation of modern trained spine surgeons has accepted usage of implants as the gold standard for achieving
optimal results.
Increased Demand for Newer Technologies. Because of the ubiquitous nature of back pain, the market is interested in newer
technologies, such as motion preservation, and novel minimally invasive techniques which would potentially allow earlier intervention in the
degenerative process of the spine for many patients.
Government Regulation
United States
Our products are regulated by the U.S. Food and Drug Administration, or the FDA, under the Federal Food, Drug, and Cosmetic
Act. Some of our products also are regulated by state agencies. FDA regulations and the requirements of the Federal Food, Drug, and
Cosmetic Act affect the pre-clinical and clinical testing, design, manufacture, safety, efficacy, labeling, storage, recordkeeping, advertising
and promotion of our medical device products. FDA regulations govern, among other things, the following activities that we or our partners
perform and will continue to perform:
product design and development;
product testing;
product manufacturing;
product labeling;
product storage;
premarket clearance or approval;
advertising and promotion; and
product sales and distribution.
Generally, before we can market a new medical device, marketing clearance from the FDA must be obtained through either a pre-
market notification under Section 510(k) or the approval of a pre-market approval, or PMA, application. The FDA typically grants a
Section 510(k) clearance if the applicant can establish that the device is substantially equivalent to a predicate device (i.e., a device with a
similar design that has already received clearance). It generally takes approximately three months from the date of a Section 510(k)
submission to obtain clearance, but it may take longer, particularly if a clinical trial is required. The FDA may find that a Section 510(k)
clearance is not appropriate or that substantial equivalence has not been shown and, as a result, will require a PMA application.
38
PMA applications must be supported by valid scientific evidence to demonstrate the safety and effectiveness of the device, typically
including the results of human clinical trials, bench tests and laboratory and animal studies. The PMA application also must contain a
complete description of the device and its components, and a detailed description of the methods, facilities and controls used to
manufacture the device. In addition, the submission must include the proposed labeling and any training materials. The PMA application
process can be expensive and generally takes significantly longer than the Section 510(k) process. Additionally, the FDA may never
approve the PMA application. As part of the PMA application review process, the FDA generally will inspect the manufacturer's facilities to
ensure compliance with applicable quality system regulatory requirements, which include quality control testing, control documentation and
other quality assurance procedures.
If human clinical trials of a medical device are required and the device presents a significant risk, the sponsor of the trial must file an
investigational device exemption, or IDE, application prior to commencing human clinical trials. The IDE application must be
supported by data, typically including the results of animal and/or laboratory testing. If the IDE application is approved by the FDA and one
or more institutional review boards, human clinical trials may begin at a specific number of investigational sites with a specific number of
patients, as approved by the FDA. If the device presents a non-significant risk to the patient, a sponsor may begin the clinical trial after
obtaining approval for the trial by one or more institutional review boards without separate approval from the FDA. Submission of an IDE
does not give assurance that the FDA will approve the IDE and, if it is approved, we cannot assure you that the FDA will determine that the
data derived from the trials support the safety and effectiveness of the device or warrant the continuation of clinical trials. An IDE
supplement must be submitted to and approved by the FDA before a sponsor or investigator may make a change to the investigational
plan that may affect its scientific soundness, study indication or the rights, safety or welfare of human subjects. The trial also must comply
with the FDA's IDE regulations and informed consent must be obtained from each subject.
If the FDA believes we are not in compliance with the law, it can institute proceedings to detain or seize products, issue a market
withdrawal, enjoin future violations and seek civil and criminal penalties against us and our officers and employees. If we fail to comply with
these regulatory requirements, our business, financial condition and results of operations could be harmed.
Thus far, all of our approved products have been cleared by the FDA through the Section 510(k) pre-market notification process. We
have not needed to conduct any clinical trials to support some of our regulatory approvals. Regulations regarding the manufacture and sale
of our products are subject to change. We cannot predict the effect, if any, that these changes might have on our business, financial
condition and results of operations. In addition to granting approvals for our products, the FDA has the authority to randomly inspect us for
compliance with regulatory requirements that apply to our operations. These requirements include labeling regulations, manufacturing
regulations, quality system regulations, regulations governing unapproved or off-label uses and medical device regulations. Medical device
regulations require a manufacturer to report to the FDA serious adverse events or certain types of malfunctions involving its products. The
FDA inspects device and drug manufacturing facilities in the United States in order to assure compliance with applicable quality system
regulations. As discussed in the section below titled "Manufacturing and Supply," we currently outsource the manufacture of our products
to third-party vendors.
Further, we are subject to various federal and state laws concerning health care fraud and abuse, including false claims laws, anti-
kickback laws and physician self-referral laws. Violations of these laws can result in criminal and/or civil punishment, including fines,
imprisonment and, in the United States, exclusion from participation in government health care programs. The scope of these laws and
related regulations is expanding and their interpretation is evolving. There is very little precedent related to these laws and regulations.
Increased funding for enforcement of these laws and regulations has resulted in greater scrutiny of marketing practices in our industry and
resulted in several investigations by various government authorities. If a governmental authority were to determine that we do not comply
with these laws and regulations, then we and our officers and employees could be subject to criminal and civil sanctions, including
exclusion from participation in federal health care reimbursement programs.
39
International
In the next few years, we plan to seek required regulatory approvals and comply with extensive regulations governing product safety,
quality, manufacturing and reimbursement processes in order to market our products in some major foreign markets, which may include
countries in Latin America, Europe or Asia. These regulations vary significantly from country to country and with respect to the nature of
the particular medical device. The time required to obtain these foreign approvals to market our products may be longer or shorter than that
required in the United States, and requirements for approval may differ from FDA requirements.
If we sell any of our products internationally, the products will be subject to certain foreign regulatory approvals. In order to market our
product devices in the member countries of the European Union, we will be required to comply with the European Medical Devices
Directives and obtain "CE" mark certification. CE mark certification is the European symbol of adherence to quality assurance standards
and compliance with applicable European Medical Devices Directives. Under the European Medical Devices Directives, all medical devices
including active implants must qualify for CE marking. We also would be required to comply with other foreign regulations, such as
obtaining Ministry of Health Labor and Welfare approval in Japan, Health Protection Branch approval in Canada, and
Therapeutic Goods Administration approval in Australia, if we market in those jurisdictions.
Research and Development
Our research and development engineering personnel have extensive experience in developing medical devices to treat joint and
spine pathologies. Our engineers work closely with surgeons to design devices that are intended to improve patient care, simplify surgical
techniques and reduce overall costs. In addition to constantly enhancing and improving our current product offerings, we are focusing our
research and development efforts in novel approaches to total knee arthroplasty, spinal motion preservation devices and products that
promote new fusion techniques and minimally invasive surgical techniques for reconstructive and spinal surgery. Our research and
development efforts are part of our overall business plan to become a market leader in providing solutions for the reconstructive joint and
spine markets. To further promote this strategy, we are focused on converting these research and development efforts into commercially
viable products that incorporate minimally invasive techniques and quick recovery to improve patient outcomes across all of our products.
Currently, our research and development staff is located in New Jersey, and we also engage the services of independent contractors in
that state. However, we are considering expansion of this staff by hiring engineers in California as well. We expect our research and
development costs to maintain the 2009 levels as we continue to expend significant resources to develop and commercialize our products
and potential products.
At this time, we have one formal consulting arrangement with a surgeon. However, we work with other surgeons informally to obtain
their feedback to enhance our products and to identify product candidates that we would like to develop. We plan to work closely with
product opinion leaders to develop and enhance our product portfolio. In 2008, we spent approximately $1,332,000 on research and
development and approximately $329,000 through the three quarters ended September 30, 2009.
Manufacturing and Supply
We do not have a manufacturing facility, and we currently do not intend to build manufacturing facilities of our own in the foreseeable
future. We utilize third-party vendors to manufacture all of our implants and instruments, including components of our products, while
internally performing product design and quality assurance. We currently use up to seven manufacturers for our devices.
Our outsourced manufacturing process typically involves machining semi-completed raw materials for both our metal and polyethylene
components that make up our joint replacement systems. After being machined, the parts are inspected and processed in preparation for
final polishing and finishing as needed. Prior to being packaged, our parts are inspected again to ensure that they are within approved
specifications. We also use components in our devices that we acquire from other companies. We distribute both sterile and non-sterile
implants and instruments.
Our outsourcing strategy is targeted at companies that meet FDA Quality Standards and our internal policies and procedures. Supplier
performance is maintained and managed through a corrective action program intended to ensure that all product requirements are met or
exceeded. We believe these manufacturing relationships minimize our capital investment, help control costs and allow us to compete with
larger volume manufacturers of spine surgery and reconstructive surgical products.
40
We currently utilize a small number of manufacturers for our products and rely on a limited number of sources for our product
components that are manufactured by third parties. In the future, we may consider manufacturing certain products or product components
internally, if and when demand or quality requirements make it appropriate to do so.
Although we believe that alternative third-party manufacturers are available, we cannot assure you that we will be able to timely
replace our third-party manufacturers immediately if one or more of them can no longer provide us with their manufacturing services. In
addition, while we do not anticipate that we will encounter problems in obtaining adequate supplies of components, we cannot assure you
that we will continue to be able to obtain components under acceptable terms and in a timely manner.
Sales and Marketing
We mostly rely on third-party independent distributors to market and sell our products. In the future, we intend to increase the number
of our internal sales and marketing personnel and further build our own sales and marketing infrastructure to market some of our products
targeting surgeons in certain regions. We also intend to continue collaborating with third-party independent distributors, including large
regional distributors.
Patents and Proprietary Technology; Trademarks
Patents
We have applied for U.S. and foreign patents covering several of our implant components, and some of our surgical instrumentation.
As of December 14, 2009, we had 20 issued patents and 19 pending domestic and foreign patent applications covering seven devices.
Patents and intellectual property will continue to be an important aspect of the orthopedic and spine industry. In this regard, we intend
to defend our intellectual property rights. We believe that our patents and products do not and will not infringe patents or violate proprietary
rights of others, although it is possible that our existing patent rights may not be valid or that infringement of existing or future patents or
proprietary rights may occur. If some of our intellectual property and agreements relating to our products are deemed invalid, that action
may have a material adverse effect on our financial condition and results of operations.
The medical device industry is characterized by patent and other intellectual property litigation, and we could become subject to
litigation that could be costly, result in diverting management's time and efforts, require us to pay damages and/or prevent us from
marketing our existing or future products. Patent litigation typically involves complex factual and legal questions whose outcome is
uncertain. Any claim relating to infringement of patents that is successfully asserted against us may require us to pay substantial damages.
Even if successful, litigation to enforce our intellectual property rights or to defend our patents against challenge could be expensive and
time-consuming and could divert our management's attention. Our success will depend in part on our not infringing patents issued to
others, including our competitors and potential competitors. If our products are found to infringe the patents of others, the development,
manufacture and sale of our products or potential products could be severely restricted or prohibited. Also, our competitors may
independently develop similar technologies that are not restricted by other companies' patents, including ours. Due to the importance of our
patents to our business, our market share can decline if we fail to protect our intellectual property rights.
A patent infringement suit brought against us or our partners may force us or our partners to halt the development, manufacture or sale
of products or potential products that are claimed to be infringing, unless that party grants us or our partners rights to use its intellectual
property. As a result, we may be required to obtain licenses to patents or proprietary rights of others in order to continue to commercialize
our products, which we may not be able to do on acceptable terms, or at all. Even if we or any partner were able to obtain rights to the third
party's intellectual property, these rights may be non-exclusive, thereby giving our competitors access to the same intellectual property.
Ultimately, we may be unable to commercialize some of our products or potential products or may have to cease some of our business
operations as a result of patent infringement claims, which could severely harm our business.
41
As more companies enter the orthopedic and spine market, the possibility of a patent infringement claim against us grows. While we
try to ensure that our products do not infringe others' patents and proprietary rights, our products, potential products and methods may be
covered by patents held by our competitors.
Trademarks
As of December 14, 2009, we had three registered trademarks with the U.S. Patent and Trademark Office, or USPTO, for the marks
"Accin," "Align 360" and "Cardo Medical"; we have an application pending for the mark "A La Carte."
Competition
The orthopedic and spinal device industry is highly competitive and dominated by a number of large companies with substantially
greater financial and other resources than we have. Our largest competitors in the orthopedic and spinal surgical device market are DePuy
Orthopaedics, Inc. and DePuy Spine, Inc. (divisions of Johnson & Johnson Company), Zimmer, Inc. (a subsidiary of Zimmer Holdings,
Inc.), Stryker Howmedica Osteonics (a subsidiary of Stryker Corporation), Smith & Nephew plc, Biomet Orthopedics, Inc. (a subsidiary
of Biomet, Inc.), Medtronic Sofamor Danek, and Synthes Inc.
Companies in the industry compete on the basis of product features and design, innovation, service, the ability to maintain new product
flow, relationships with key orthopedic surgeons and hospitals, the strength of their distribution network and price. While price is a key
factor in the orthopedic market, other significant factors could negatively impact our results of operations and financial condition, including:
technological innovation, reimbursement rates, surgeon preference, ease of use, clinical results and service provided by us and our
representatives.
Our products are, and any potential products we commercialize will be, subject to intense competition. Many of our current and
potential competitors have substantially greater financial, technical and marketing resources than we do, and they may succeed in
developing products that would render our products obsolete or noncompetitive. Many of these competitors also have significantly greater
operating history and reputations than we do in our respective fields. We may not be able to compete successfully if we are unable to
develop proprietary products that reach the market in a timely manner, receive adequate reimbursement and are safer, less invasive and
less expensive than alternatives available for the same purpose. Because of the rapidly growing orthopedic market, we anticipate that
companies will dedicate significant resources to developing competing products.
Regarding our spinal portfolio, we also face competition from a growing number of smaller companies with more limited product
offerings and geographic reach than our larger competitors. These companies, who represent intense competition in specified markets,
include Abbott Spine, Inc. (a division of Abbott Laboratories, Inc.), Orthofix International N.V. (parent of Blackstone Medical, Inc.), Alphatec
Spine Inc. (a subsidiary of Alphatec Holdings, Inc.), Globus Medical, Inc., and Nuvasive, Inc.
Product Liability and Insurance
We are subject to potential product liability risks that are inherent in the design, marketing and sale of orthopedic implants and surgical
instrumentation. We have implemented strict quality control measures and currently maintain product liability insurance in amounts that we
believe are typical in the industry for companies with a comparable size to ours. Our insurance premiums are paid as a percentage of
sales. We evaluate our levels of product liability insurance annually, as well as the amount of retention carried compared to other
comparable companies in the industry. Due to the volatility of the insurance marketplace, the value of the product liability insurance
products delivered and the small number of providers of these products, there can be no guarantees as to whether we will be able to
secure coverage in the future at a reasonable cost.
42
Third-Party Reimbursement
Sales of our products will depend on the availability of adequate reimbursement from third-party payors (such as governmental
programs, for example, Medicare and Medicaid, private insurance plans and managed care programs), both in terms of the sales volumes
and prices of our products. Healthcare providers, such as hospitals that purchase medical devices for treating their patients, generally rely
on third-party payors to reimburse all or part of the costs and fees associated with the procedures performed with these devices. These
third-party payors may deny reimbursement if they feel that a device is not the most cost-effective treatment available, or was used for an
unapproved indication. As such, surgeons are unlikely to use our products if they do not receive reimbursement adequate to cover the cost
of their involvement in the surgical procedures. We also believe that future reimbursement may be subject to increased restrictions both in
the U.S. and internationally. If we sell our products internationally, market acceptance may depend, in part, upon the availability of
reimbursement within the prevailing healthcare payment systems. Reimbursement and healthcare payment systems in international
markets vary significantly by country, and include both government sponsored healthcare and private insurance.
Future legislation, regulation or reimbursement policies of third-party payors may adversely affect the demand for our existing products
or our products currently under development and limit our ability to sell our products on a profitable basis.
Also, third-party payors are increasingly challenging the prices charged for medical products and services. Particularly in the United
States, third-party payors carefully review, and increasingly challenge, the prices charged for procedures and medical products. Also,
greater numbers of insured individuals are receiving (and will continue to receive over the next decade) their medical care through
managed care programs, which monitor and often require pre-approval of the services that a member will receive. Many managed care
programs are paying their providers on a capitated basis, which puts the providers at financial risk for the services provided to their patients
by paying them a predetermined payment per member per month.
Legislative or administrative reforms to the U.S. or international reimbursement systems in a manner that significantly reduces
reimbursement for procedures using our medical devices or denies coverage for those procedures could have a material adverse effect on
our business, financial condition or results of operations. We believe that the overall escalating cost of medical products and services has
led to, and will continue to lead to, increased pressures on the healthcare industry to reduce the costs of products and services. We cannot
assure you that third-party reimbursement and coverage will be available or adequate, or that future legislation, regulation, or
reimbursement policies of third-party payors will not adversely affect the demand for our products or our ability to sell these products on a
profitable basis. We also cannot assure you that our products will be considered cost-effective by third-party payors, that reimbursement
will be available or, if available, that the third-party payors' reimbursement policies will not adversely affect our ability to sell our products
profitably.
Healthcare Fraud and Abuse
Our relationship with surgeons, hospitals and the marketers of our products are subject to scrutiny under various state and federal
anti-kickback, self-referral, false claims and similar laws, often referred to collectively as healthcare fraud and abuse laws. The federal
anti-kickback laws prohibit unlawful inducements for the referral of business reimbursable under federally-funded health care programs, such
as remuneration provided to physicians to induce them to use certain medical devices reimbursable by Medicare or Medicaid. Healthcare
fraud and abuse laws are complex and subject to evolving interpretations, and even minor, inadvertent violations potentially can give rise to
claims that the relevant law has been violated. Certain states in which we market our products have similar anti-kickback, anti-fee splitting
and self-referral laws, imposing substantial penalties for violations. Any violations of these laws could result in a material adverse effect on
the market price of our common stock, as well as our business, financial condition and results of operations. We cannot assure you that
any of the healthcare fraud and abuse laws will not change or be interpreted in the future in a manner which restricts or adversely affects
our business activities or relationships with surgeons, hospitals and marketers of our products. In addition, possible sanctions for violating
these anti-kickback laws include monetary fines, civil and criminal penalties, exclusion from Medicare and Medicaid programs and
forfeiture of amounts collected in violation of these prohibitions.
43
We must comply with a variety of other laws, such as laws prohibiting false claims for reimbursement under Medicare and Medicaid,
which also can be triggered by violations of federal anti-kickback laws; Healthcare Insurance Portability and Accountability Act of 1996,
which protects the privacy of individually identifiable healthcare information; and the Federal Trade Commission Act and similar laws
regulating advertisement and consumer protections. In certain cases, federal and state authorities pursue actions for false claims on the
basis that manufacturers and distributors are promoting unapproved or off-label uses of their products.
Management's Plan
To achieve our growth objectives, we are considering different strategies, including growth through acquisitions and raising
additional capital. As a result, we are constantly and aggressively evaluating and we will continue to evaluate other companies and
businesses for potential synergies that would add value to our existing operations.
Description of Property
As of September 30, 2009, the Company leases an office facility in Van Nuys, California (near Los Angeles) under a month-to-month
operating lease.  We also lease facilities in Beverly Hills and Clifton, New Jersey (near New York City) under operating leases that
expire in July 2010 and August 2012, respectively.
Legal Proceedings
From time to time, we may be a party to legal proceedings incidental to our business. We do not believe that there are any proceedings
threatened or pending against us, which, if determined adversely to us, would have a material effect on our financial position or results of operations and cash flows.
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market for Common Stock
The Company's common stock currently trades on the OTC Bulletin Board under the symbol "CDOM.OB" The following table sets forth
the quarterly high and low sales prices of our common stock for the fiscal years 2008 and 2007 and the first three quarters of 2009, as
quoted on the OTC Bulletin Board. This information represents prices between dealers and does not include retail mark-ups, markdowns or
commissions and may not represent actual transactions. All information related to stock price and numbers of common stock are post-split,
which reflect a reverse split with clickNsettle.com which occurred in the month of March 2008.
High
Low
Fiscal Year 2007
First Quarter
$2.50
$0.52
Second Quarter
$1.20
$0.70
Third Quarter
$5.00
$0.75
Fourth Quarter
$6.20
$3.00
Fiscal Year 2008
First Quarter
$3.90
$1.60
Second Quarter
$2.25
$1.05
Third Quarter
$2.90
$1.10
Fourth Quarter
$1.90
$1.25
Fiscal Year 2009
First Quarter
$2.25
$0.52
Second Quarter
$1.50
$0.65
Third Quarter
$1.25
$0.60
Fourth Quarter (through December 17, 2009)
$1.01
$0.51
44
As of December 14, 2009, there were approximately 261 registered holders of record of the common stock.
We have not paid any cash dividends on our common stock and do not plan to pay any such dividends in the foreseeable future. Our
Board of Directors will determine our future dividend policy on the basis of many factors, including results of operations, capital
requirements and general business conditions.
Equity Compensation Plan Information
The following table summarizes the number of outstanding options granted to employees, service providers and directors
under the Company's compensation plans and arrangements as of the quarter ended September 30, 2009.
For a description of equity compensation plans not approved by security holders see Note 12 to the Consolidated Financial
Statements for the year ended December 31, 2008 included elsewhere in this registration statement.
Number of securities
Number of securities
to be issued upon
Weighted-average
remaining available
exercise of
exercise price of
for future issuance
outstanding options,
outstanding options,
under equity
warrants and rights
warrants and rights
compensation plans
Equity compensation plans
not approved by security holders
2,358,400
$                                   0.23
-
Equity compensation plans
approved by security holders
-
-
-
Total
2,358,400
$                                   0.23
-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The discussion and analysis of our financial condition and results of operations are based on our financial statements, which we
have prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these
financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during
the reporting periods. On an ongoing basis, we evaluate estimates and judgments, including those described in greater detail below. We
base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different assumptions or conditions.
The following discussion and analysis excludes the impact of clickNsettle.com, Inc. ("CKST")'s financial condition and results of
operations prior to the Merger on August 29, 2008 because they were not material in relation to the financial information for any of the
periods presented below.
All amounts, other than share amounts, are stated in thousands.
As used in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" except where the
context otherwise requires, the term "we," "us," "our" or "Cardo" refers to the business of Cardo Medical, Inc.
45
The following discussion should be read together with the information contained in the financial statements and related notes
included elsewhere in this Registration Statement on Form S-1.
Overview
Cardo Medical, Inc. is an orthopedic medical device company specializing in designing, developing and marketing high performance
reconstructive joint devices and spinal surgical devices. Reconstructive joint devices are used to replace knee, hip and other joints that
have deteriorated through disease or injury. Spinal surgical devices involve products to stabilize the spine for fusion and reconstructive
procedures. Within these areas, Cardo intends to focus on the higher-growth sectors of the orthopedic industry, such as advanced
minimally invasive instrumentation and bone-conserving high-performance implants. Cardo is focused on developing surgical devices that
will enable surgeons to bridge the gap between soft tissue-driven sports medicine techniques and classical reconstructive surgical
procedures. Cardo commercializes its reconstructive joint devices through its Cardo Orthopedics division and its spine devices through its
Cardo Spine division. The Company launched and commenced sales of its first product in late 2006, which was a high-performance,
uni-compartmental knee replacement. The Company commenced sales of its reconstructive products in 2007 and spine products in 2008.
On June 18, 2008, Cardo Medical, LLC ("Cardo LLC") entered into a Merger Agreement and Plan of Reorganization with
CKST and Cardo Acquisition, LLC, a California limited liability company and wholly-owned subsidiary of CKST. Upon the consummation of
the transactions contemplated by the Merger Agreement, CKST acquired Cardo LLC through a merger of Cardo LLC with Cardo
Acquisition, with Cardo LLC continuing as the surviving entity in the Merger and a wholly-owned subsidiary of CKST. Pursuant to the
Merger Agreement, all of the issued and outstanding units of Cardo LLC's membership interests were converted into the right to receive
shares of the common stock of CKST.
On or about the signing of the Merger Agreement, Frost Gamma Investments Trust and other investors invested $12.975 million in
Cardo LLC in exchange for units of Cardo LLC's membership interests. Dr. Phillip Frost, Chairman and Chief Executive Officer of Opko
Health, Inc., is the trustee and beneficiary of Frost Gamma Investments Trust. Cardo LLC used approximately $9.7 million of the proceeds
from these investments to close on the acquisition of the outstanding equity interests of three partially owned subsidiaries of Cardo LLC
(Accelerated Innovation, LLC, Cervical Xpand, LLC and Uni-Knee, LLC), to repay an existing member loan (in the amount of $1.2 million)
and for transaction expenses, and used the remaining funds to accelerate its research and product development. In addition, at the closing
of the Merger, CKST had cash and cash equivalents of approximately $2.5 million held in money market accounts and certificates of
deposit as well as accrued liabilities of approximately $354 thousand.
We are headquartered in Beverly Hills, California. In connection with the consummation of the Merger, CKST proposed to its
stockholders an amendment to its Amended and Restated Certificate of Incorporation to change its name from "clickNsettle.com, Inc." to
"Cardo Medical, Inc." CKST's trading symbol was "CKST.OB," which has changed to "CDOM.OB" in connection with the name change.
Cardo Medical's common stock is quoted on the National Association of Securities Dealers, Inc.'s, Over-the-Counter Bulletin Board, or the
OTC Bulletin Board.
Critical Accounting Policies and Estimates
Our significant accounting policies are more fully described in the notes to our consolidated financial statements.  Those material
accounting estimates that we believe are the most critical to an investor's understanding of our financial results and condition are
discussed immediately below and are particularly important to the portrayal of our financial position and results of operations and require
the application of significant judgment by our management to determine the appropriate assumptions to be used in the determination of
certain estimates.
46
Use of Estimates
Financial statements prepared in accordance with accounting principles generally accepted in the United States require management
to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Among other things, management makes estimates relating to
allowances for doubtful accounts, excess and obsolete inventory items, the estimated depreciable lives of property and equipment, the
impairment of goodwill and other intangible assets, share-based payment, deferred income tax assets and the allocation of the purchase
price paid for the minority interests in Uni, Cervical and Accelerated Innovation. Given the short operating history of Cardo, actual results
could differ from those estimates.
Revenue Recognition
The Company recognizes revenue when it's realizable and earned. The Company considers revenue to be realizable and earned
when the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered,
the seller's price to the buyer is fixed or determinable, and collectability is reasonably assured. Persuasive evidence of the arrangements
occurs when the Company receives a signed contract from the hospital in which the surgery will be performed. Within that contract is the
price at which the hospital will buy the device. Delivery occurs on the day of surgery when the device is implanted by the surgeon.
Collectability is reasonably assured as we have continuing relationships with the hospitals and we can pursue collections if necessary. As
the Company does not accept returns and does not have any post-sale obligations, the date of revenue recognition is generally on the day
of the surgery.
Intangible and Long-Lived Assets
The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book
value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future
cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount.
Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted
expected cash flows, of those assets and is recorded in the period in which the determination is made. The Company's management
currently believes there is no impairment of its long-lived assets. There can be no assurance, however, that market conditions will not
change or demand for the Company's products will continue. Either of these could result in future impairment of long-lived assets. The first
step of the Company's goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If
the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, thus the second step
of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill
impairment test shall be performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test
compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill. If the carrying amount of reporting unit
goodwill exceeds the implied fair value of that goodwill, an impairment loss shall be recognized in an amount equal to that excess. The loss
recognized cannot exceed the carrying amount of goodwill. After a goodwill impairment loss is recognized, the adjusted carrying amount of
goodwill shall be its new accounting basis. Subsequent reversal of a previously recognized goodwill impairment loss is prohibited once the
measurement of that loss is completed. The testing for impairment needs to be conducted at the reporting unit, or component level, which
is one level below the operating unit. In Cardo's case, the operating units are the Reconstructive and Spine product lines. The reporting
units are one level below that. In the case of the Reconstructive Division, the reporting units are the knee and hip products. For the Spine
Division, the reporting units are the licensed and internally developed products.
Property and Equipment
Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives, which
range from three to five years. This estimate is based on the useful life of the individual items. When items are retired or disposed of,
income is charged or credited for the difference between the net book value of the asset and the proceeds realized thereon. Ordinary
maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized. This estimate is unlikely
to experience any differences from what is reflected in the financial statements.
47
Share Based Payment
In order to determine compensation on options issued to consultants, and employees' options, the fair value of each option granted is
estimated on the date of grant using the Black-Scholes option-pricing model. The Company estimates the requisite service period used in
the Black-Scholes calculation based on an analysis of vesting and exercisability conditions, explicit, implicit, and/or derived service periods,
and the probability of the satisfaction of any performance or service conditions. The Company also considers whether the requisite service
has been rendered when recognizing compensation costs. Because the Black-Scholes option valuation model incorporate ranges of
assumptions for inputs, those ranges are disclosed. Expected volatilities are based on the historical volatility of the components of the
small cap sector of the Dow Jones medical equipment index for a period equal to the expected life of the Cardo options. It also measures
the volatility of other public companies with similar size and industry characteristics to Cardo for the same period. These measurements
are averaged and the result is used as expected volatility. As there is no history of option lives at Cardo, the expected term of options
granted is the midpoint between the vesting periods and the contractual life of the options. The risk-free rate for periods within the
contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The forfeiture rate is based on an
analysis of the nature of the recipients' jobs and relationships to the Company.
Income Taxes
On August 29, 2008, Cardo LLC consummated a reverse takeover of CKST thereby adopting CKST as the taxpaying
entity.
The Company's deferred tax assets and liabilities are recognized to reflect the estimated future tax effects, calculated at currently
effective tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the
financial statements.  A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of
the deferred tax asset will not be realized.  The estimated value of the deferred tax assets are subject to significant change based on the
company's future profitability.  Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the
date of enactment.
In June 2008, the Financial Accounting Standards Board ("FASB") sought to reduce the diversity in practice associated
with certain aspects of measurement and recognition in accounting for income taxes.  FASB prescribed a recognition threshold and
measurement requirement for the financial statement recognition of a tax position that has been taken or is expected to be taken on a tax
return and also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and
transition.  As such, the Company may only recognize or continue to recognize tax positions that meet a "more likely than not"
threshold.  Based on this analysis, the Company's tax position is unlikely to change.
Inventory
Inventory is stated at the lower of cost or net realizable value as determined by assessing the gross profit less selling costs of each
inventory item. Cost is determined on a first-in, first-out basis; and the inventory is comprised of work in process and finished goods. Work
in process consists of fabrication costs paid relating to items not physically received. Finished goods are completed knee, spine and hip
replacement products ready for resale to customers.
At each balance sheet date, the Company evaluates its ending inventories for excess quantities and obsolescence. This evaluation
includes an analysis of sales levels by product type. Among other factors, the Company considers current product configurations, historical
and forecasted demand, market conditions and product life cycles when determining the net realizable value of the inventory. Provisions
are made to reduce excess or obsolete inventories to their estimated net realizable values. Once established, write-downs are considered
permanent adjustments to the cost basis of the excess or obsolete inventory. The Company did not have any inventory considered by
management to be excess or obsolete as of December 31, 2008 and September 30, 2009. Based on the forecasted sales amounts, we do
not expect any changes in net realizable value in the near future.
48
Recent Accounting Pronouncements
In July 2009, the FASB issued ASC 105-10 (Prior authoritative literature: SFAS No. 168,
The FASB Accounting Standards
Codification
TM
and the Hierarchy of Generally Accepted Accounting Principles
, which will become the single source of
authoritative GAAP recognized by the FASB.  ASC 105-10 does not change current U.S. GAAP, but on the effective date, the FASB
Accounting Standards Codification ("ASC")
TM
will supersede all then existing non-SEC accounting and reporting
standards.  The ASC is effective for interim and annual periods ending after September 15, 2009.  Cardo adopted ASC 105-10 during the
quarter ended September 30, 2009 and revised the referencing of GAAP accounting standards in our financial statements to reflect the
new standards.
In May 2009, the FASB issued ASC 855-10 (Prior authoritative literature: SFAS No. 165, Subsequent Events) which provides guidance
on management's assessment of subsequent events.  It is not expected to significantly change practice because its guidance is similar to
that in American Institute of Certified Public Accountants Professional Standards U.S. Auditing Standards Section 560, Subsequent
Events, with some modifications.  The Company adopted ASC 855-10 during the quarter ended June 30, 2009. The adoption of ASC 855-10 did
not have a material impact on our results of operations, financial position or cash flows.
In April 2009, FASB issued ASC 820-10 (Prior authoritative literature: FSP No. FAS 157-4,
Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly
).
It does not change the definition of fair value as previously detailed, but provides additional guidance for estimating fair value when the
volume and level of activity for the asset or liability have significantly decreased. Cardo adopted ASC 820-10 during the quarter ended
June 30, 2009. The adoption of ASC 820-10 did not have a material impact on our results of operations, financial position or cash flows.
In April 2009, the FASB issued ASC 320-10 (Prior authoritative literature: FSP No. FAS 115-2 and FAS 124-2,
Recognition and
Presentation of Other-Than-Temporary Impairments
). ASC 320-10 amends the other-than-temporary impairment guidance in U.S.
GAAP for debt securities and provides additional disclosure requirements for other-than-temporary impairments for debt and equity
securities. ASC 320-10 addresses the determination as to when an investment is considered impaired, whether that impairment is other
than temporary, and the measurement of an impairment loss. Cardo adopted ASC 320-10 during the quarter ended June 30, 2009. The
adoption of ASC 320-10 did not have a material impact on our results of operations, financial position or cash flows.
In April 2009, the FASB issued ASC 825-10 (Prior authoritative literature: FSP No. FAS 107-1 and APB 28-1,
Interim Disclosures
about Fair Value of Financial Instruments
). FASB ASC 825-10 requires that disclosures about the fair value of a company's financial
instruments be made whenever summarized financial information for interim reporting periods is made. Cardo adopted ASC 825-10 during
the quarter ended September 30, 2009. The adoption of ASC 825-10 did not have a material impact on our results of operations, financial
position or cash flows.
In June 2009, the FASB issued the following new accounting standards, which remain authoritative until such time that each is
integrated into the Codification:
SFAS No. 166,
Accounting for Transfers of Financial Assets - an amendment of FASB Statement No. 140
SFAS No. 167,
Amendments to FASB Interpretation No. 46(R)
. SFAS No. 167 amends FASB Interpretation No. ("FIN") 46,
Consolidation of Variable Interest Entities (revised December 2003) - an interpretation of ARB No. 51
SFAS No. 166 seeks to improve the relevance and comparability of the information that a reporting entity provides in its financial
statements about transfers of financial assets; the effects of the transfer on its financial position, financial performance, and cash flows;
and a transferor's continuing involvement, if any, in transferred financial assets. SFAS No. 166 eliminates the concept of a qualifying
special-purpose entity, creates more stringent conditions for reporting a transfer of a portion of a financial asset as a sale, clarifies other
sale-accounting criteria, and changes the initial measurement of a transferor's interest in transferred financial assets. SFAS No. 166 is
effective for interim and annual reporting periods beginning after November 15, 2009. The Company has not completed its evaluation, but
does not expect the adoption of SFAS No. 166 to have a material impact on our consolidated financial statements.
49
SFAS No. 167 requires an enterprise to determine whether its variable interest or interests give it a controlling financial interest in a
variable interest entity. The primary beneficiary of a variable interest entity is the enterprise that has both (1) the power to direct the
activities of a variable interest entity that most significantly impact the entity's economic performance, and (2) the obligation to absorb
losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could
potentially be significant to the variable interest entity. SFAS No. 167 also amends FIN 46(R) to require ongoing reassessments of whether
an enterprise is the primary beneficiary of a variable interest entity. SFAS No. 167 is effective for interim and annual reporting periods
beginning after November 15, 2009. The Company has not completed its evaluation, but does not expect the adoption of SFAS No. 167 to
have a material impact on our consolidated financial statements.
Results of Operations for the Three Months Ended September 30, 2009 as Compared to the Three Months Ended September 30,
2008. (Amounts in thousands)
The following is a comparison of the consolidated results of operations for Cardo for the three months ended September 30, 2009 and
2008:
Three Months Ended
September 30,
2009
2008
Variance
(Restated)
Net sales
$
436
$
411
$
25
Cost of sales
84
66
18
Gross profit
352
345
7
Research and development expenses
123
142
(19)
Selling, general and administrative expenses
1,440
1,089
351
Loss from operations
(1,211)
(886)
(325)
Interest income (expense), net
6
5
1
Loss before income tax provision
(1,205)
(881)
(324)
Provision for income taxes
-
-
-
Net loss
(1,205)
(881)
(324)
Less: Net income attributable to non-controlling interest
-
-
-
Net loss attibutable to Cardo Medical, Inc.
$
(1,205)
$
(881)
$
(324)
Revenues
During the quarter ended September 30, 2009, we generated revenues of $436 compared to $411 for the same period in 2008. The
wider acceptance of our Hip and Spine products by orthopedic and back surgeons has resulted in higher sales volume in the current year.
Accordingly, sales of Hip and Spine products increased $122 in the current quarter as compared to 2008. We launched our Hip product in
the first quarter of 2009 which resulted in $78 of sales during the quarter ended September 30, 2009. Comparable sales for the same
period in 2008 were nominal. The increases in Hip and Spine sales were offset by a drop in Knee sales in 2009 compared to 2008. Our
Knee and Hip products accounted for 79% of total sales during the three months ended September 30, 2009. During the quarter ended
September 30, 2008, Knee products totaled 93% of sales.
Gross Profit
During the quarter ended September 30, 2009, we had cost of sales of $84 compared to $66 during the quarter ended September 30,
2008. Our gross profit percentage was 80.7% for the three months ended September 30, 2009 compared to 83.9% for the corresponding
period in 2008. This decrease is attributed to sales of Hip products in 2009, which generate lower margins than Knee products, and a slight
decrease in the profit margin from Knee products. During the quarter ended September 30, 2008, there were minimal sales of Hip products
so the profit margin was indicative of our Knee product. As Cardo moves forward, we expect that our current product costs will be
maintained and the gross profits shall remain mostly in-line with the current year percentages.
50
Research and Development Expenses
During the quarter ended September 30, 2009, we had research and development costs of $123 compared to $142 for the same
period in 2008. The decrease in the current year is indicative of reduced research activity as most of our products are on the market.
Research costs associated with our Total Knee product have slowed because it is nearing its launch in mid-2010; however, research is
underway on a new Hip product so research and development expenses are likely to increase in the upcoming quarters.
Selling, General and Administrative Expenses
During the quarter ended September 30, 2009, we had selling general and administrative expenses of $1,440 compared to $1,089 in
the same period of 2008. During 2009, labor and labor-related expenses increased $342 compared to 2008 as we expanded our
operations in order to meet current and anticipated growth. Depreciation and amortization expense increased by $93 during the quarter
ended September 30, 2009 because of the acquisition of additional instrumentation required to support base inventory levels and expected
future sales increases, and the purchase of the non-controlling interest in Accelerated Innovation, LLC in June 2008 which resulted in
$5,328 of amortizable intangible assets. Rent, travel and office expenses were slightly higher in 2009 as we added office space and our
overall business activity was greater than it was in 2008. These cost increases were partially offset by a drop in professional fees during
2009 of $154 and commission expense which was higher in 2008 due to greater incentives to initiate sales. There were significant legal
and accounting costs associated with the purchase of the non-controlling interest in Accelerated Innovation, LLC in June 2008 and the
reverse merger transaction with clickNsettle.com, Inc. which was completed in August 2008.
Interest Income/(Expense)
During the quarter ended September 30, 2009, we had interest income of $6 compared to $5 during the quarter ended September 30,
2008. Interest income is earned on our excess cash balances, which were comparable in both periods.
Results of Operations for the Nine Months Ended September 30, 2009 as Compared to the Nine Months Ended September 30,
2008. (Amounts in thousands)
The following is a comparison of the consolidated results of operations for Cardo for the nine months ended September 30, 2009 and
2008:
Nine Months Ended
September 30,
2009
2008
Variance
(Restated)
Net sales
$
1,314
$
932
$
382
Cost of sales
254
139
115
Gross profit
1,060
793
267
Research and development expenses
329
1,288
(959)
Selling, general and administrative expenses
4,521
2,488
2,033
Loss from operations
(3,790)
(2,983)
(807)
Interest income (expense), net
22
(37)
59
Loss before income tax provision
(3,768)
(3,020)
(748)
Provision for income taxes
-
-
-
Net loss
(3,768)
(3,020)
(748)
Less: Net income attributable to non-controlling interest
-
(148)
148
Net loss attibutable to Cardo Medical, Inc.
$
(3,768)
$
(3,168)
$
(600)
51
Revenues
During the nine months ended September 30, 2009, we generated revenues of $1,314 compared to $932 for the same period in 2008.
The increase of $382 was attributed to the wider acceptance of our Knee, Hip and Spine products by orthopedic and back surgeons that
resulted in higher sales volume in the current year. We launched our Hip product in the first quarter of 2009 which resulted in $278 of sales
thus far in 2009 compared to $45 in 2008. Our Knee and Hip products accounted for 89% of total sales during the nine months ended
September 30, 2009. Knee was the primary product with 90% of total sales during the nine months ended September 30, 2008.
Gross Profit
During the nine months ended September 30, 2009, we had cost of sales of $254 compared to $139 during 2008. Our gross profit
percentage was 80.7% for the nine months ended September 30, 2009 compared to 85.1% for the corresponding period in 2008. This
decrease was attributed to significant sales of Hip products in 2009, which generate lower margins than Knee products, and a slight
decrease in the profit margin from Knee products. During the nine months ended September 30, 2008, sales of Hip products were minimal
so the profit margin was mostly indicative of our Knee product. As Cardo moves forward, we expect that our current product costs will be
maintained and the gross profits shall remain mostly in-line with the current year percentages.
Research and Development Expenses
During the nine months ended September 30, 2009, we had research and development costs of $329 compared to $1,288 for the
same period in 2008. The decrease was primarily due to a one-time charge of $938 of in-process research and development acquired in
connection with the purchase of the non- controlling interest in Accelerated Innovation, LLC in June 2008. The acquired in-process
research and development related to development costs associated with our Uni Knee system. Aside from the in-process research and
development, spending on research and development was fairly consistent from 2008 to 2009. During 2008, we incurred more costs
associated with Hip products. Research costs associated with our Total Knee product have slowed because it is nearing its launch in
mid-2010; however, research is underway on a new Hip product so research and development expenses are likely to increase some in the
upcoming quarters.
Selling, General and Administrative Expenses
During the nine months ended September 30, 2009 our selling general and administrative expenses were $4,521 compared to $2,488
for the same period in 2008, a net increase of $2,033. During 2009, labor and labor-related expenses increased $1,626 compared to 2008
as we expanded our operations in order to meet current and anticipated growth. Depreciation and amortization expense increased by $558
during the quarter ended September 30, 2009 because of the acquisition of additional instrumentation required to support base inventory
levels and expected future sales increases, and the purchase of the non-controlling interest in Accelerated Innovation, LLC in June 2008
which resulted in $5,328 of amortizable intangible assets. Commission expense increased accordingly with the increase in sales. Rent,
travel, warehouse, insurance and office expenses were also higher during the nine months ended September 30, 2009 as we added office
space and our overall business activity was greater than it was in 2008. These cost increases were partially offset by a drop in professional
fees during 2009 of $442. There were significant legal and accounting costs associated with the purchase of the non-controlling interest in
Accelerated Innovation, LLC in June 2008 and the reverse merger transaction (the "Merger") with clickNsettle.com, Inc. which was
completed in August 2008.
Interest Income
During the nine months ended September 30, 2009, we had interest income of $22 for the nine months ended September 30, 2009
compared to interest expense of $37 in the corresponding period of 2008. In the first and second quarter of 2008, we had interest expense
stemming from a short-term note payable which was fully repaid in July 2008. Interest income is earned on our excess cash balances,
which were significantly higher throughout 2009 compared to 2008.
52
Segment Information
Our businesses are currently organized into the following two reportable segments; reconstructive products (the "Reconstructive
Division") and spine products (the "Spine Division"). The Reconstructive Division segment is comprised of activity relating to Cardo's
unicompartmental knee, patella-femoral products, and reconstructive knee products. The Spine Division segment is comprised of the
spinal lumbar fusion system and cervical plate and screw systems.
These reportable segments are based on the nature of the products offered. Management evaluates performance and allocates
resources based on several factors, of which the primary financial measure is segment operating results. Due to the distinct nature of the
products in our Reconstructive Division, and the fact that it has a more developed market for its products, it is considered by management
as a separate segment. Our Spine Division is still in the process of developing the market and obtaining instrumentation necessary to sell
the products in greater quantities. As a result, the Spine Division is considered by management as a separate segment. The accounting
policies of the reportable segments are the same as those described in Note 1.
As of September 30, 2009, the Reconstructive Division includes $1,233 of goodwill and $4,515 in other intangible assets relating to the
Company's unicompartmental knee product. These amounts are expected to be deductible for income tax purposes.
The following table sets forth summarized financial results by reportable segment for the three and nine months ended September 30,
2009 and 2008:
Reconstructive
Spine
Division
Division
Corporate
Total
Nine Months Ended September 30, 2009 (unaudited)
Net sales
$
1,175
$
139
$
-
$
1,314
Total cost of sales and operating expenses
226
28
3,972
4,226
Depreciation and amortization
848
4
26
878
Interest income, net
-
-
22
22
Net income (loss)
$
101
$
107
$
(3,976)
$
(3,768)
Nine Months Ended September 30, 2008 (unaudited - restated)
Net sales
$
885
$
47
$
-
$
932
Total cost of sales and operating expenses
125
14
3,590
3,729
Depreciation and amortization
319
3
12
334
Interest expense, net
-
-
37
37
Net income (loss)
$
441
$
30
$
(3,639)
$
(3,168)
Three Months Ended September 30, 2009 (unaudited)
Net sales
$
351
$
85
$
-
$
436
Total cost of sales and operating expenses
76
8
1,250
1,334
Depreciation and amortization
303
2
8
313
Interest income, net
-
-
6
6
Net income (loss)
$
(28)
$
75
$
(1,252)
$
(1,205)
Three Months Ended September 30, 2008 (unaudited - restated)
Net sales
$
386
$
25
$
-
$
411
Total cost of sales and operating expenses
62
8
1,011
1,081
Depreciation and amortization
211
1
4
216
Interest expense, net
-
-
5
5
Net income (loss)
$
113
$
16
$
(1,010)
$
(881)
53
All of the Company's net sales were attributable to activity in the United States. There were no long-lived assets held in foreign
countries.
Liquidity and Capital Resources
Net cash used in operating activities was $3,630 for the nine months ended September 30, 2009 compared to $1,613 for the same
period in 2008. The primary use of cash in 2009 beyond wages and other operating costs was the build-up of inventory which has
increased $1,051 during the current year.
Net cash used in investing activities was $1,051 for the nine months ended September 30, 2009 compared to $1,484 for the same
period in 2008. The cash used by investment activities during the nine months ended September 30, 2009 was mostly attributed to the
purchase of equipment to accommodate our operational and corporate growth as well as additional instrumentation required in order to
support current and anticipated future sales levels. The current year also includes $130 of deposits associated with the October 2009
purchase of certain Vertebron, Inc. assets.
Our net cash provided by financing activities was $3,193 for the nine months ended September 30, 2009 compared to $6,775 for the
same period in 2008. During the current quarter, we completed two equity investment transactions to provide us additional working capital
needed to maintain and build certain inventory and instrumentation levels to meet expected increases in future sales and product
development.
At September 30, 2009, we had $1,607 in cash; however, in October 2009 we used $1,170 in order to complete the Vertebron, Inc.
transaction and raised net proceeds of $3,189 through a private placement. With this subsequent net cash infusion, the available funds are
still not projected to meet all of our working capital needs for the next twelve months. The fact that Cardo will sustain losses through the
remainder of 2009 and still requires outside sources of additional capital to supplement operations continues to create an uncertainty about
our ability to continue as a going concern.
Management intends to use borrowings and securities sales to mitigate the effects of our use of that cash. However, we cannot assure
you that debt or equity financing, if and when required, will be available. Our ability to continue as a going concern is dependent upon
receiving additional funds either through the issuance of debt or equity and the success of management's plan to expand sales. Although
we may obtain external financing through the sales of our own securities, there can be no assurance that such financing will be available,
or if available, that any such financing would be on terms acceptable to us. If we are unable to fund our cash flow needs, we may have to
reduce or stop planned growth or scale back operations and reduce staff.
54
Results of Operations for the Year Ended December 31, 2008 as Compared to the Year Ended December 31, 2007 (including the
combined results of operations for Cardo and Accin) (Amounts in thousands)
The following are the consolidated results of operations for Cardo for the year ended December 31, 2008 compared to an unaudited
pro forma presentation of Cardo and Accin Corporation, the company from which Cardo acquired its medical device business, for the year
ended December 31, 2007, assuming they were combined at the beginning of the year in thousands.
Cardo
April 6, 2007,
Pro Forma
Cardo
Inception,
Accin
Combined
Year Ended
Through
Five Months
Year Ended
December 31,
December 31,
Ended
December 31,
2008
2007
May 31, 2007
2007
$ Change
% Change
(unaudited)
Net sales
$
1,268
$
643
$
157
$
800
$
468
58.5%
Cost of sales
197
69
25
94
103
109.6%
Gross profit
1,071
574
132
706
365
51.7%
Research and development expenses
1,332
215
41
256
1,076
420.3%
Selling, general and administrative expenses
3,914
671
250
921
2,993
325.0%
Impairment charges
1,457
-
-
-
1,457
100.0%
Loss from operations
(5,632)
(312)
(159)
(471)
(5,161)
1095.8%
Income (expense), net
(20)
33
20
53
(73)
-137.7%
Loss before non-controlling interest
(5,652)
(279)
(139)
(418)
(5,234)
1252.2%
Non-controlling interest in loss (earnings) of subsidiaries
(148)
(8)
128
120
(268)
-223.3%
Net loss
$
(5,800)
$
(287)
$
(11)
$
(298)
$
(5,502)
1846.3%
Revenues
Net sales for the year ended December 31, 2008 increased by $468, or 58.5%, as compared to 2007. Accin, the company from which
Cardo acquired its medical device business, launched and commenced sales of its first product in December 2006, a high performance,
unicompartmental knee replacement product. As doctors became more familiar with our new product, they began using it more often. Total
unicompartmental knee sales for 2008 amounted to $1,117, which represented an increase of $318 over 2007. In addition, during 2008, we
began sales of our patellofemoral knee, hip and spine products, which contributed to an increase in sales of approximately $151 as
compared to 2007.
Costs of Sales
Costs of sales for the year ended December 31, 2008 increased by $103, or 109.6%, as compared to the same period in 2007
primarily to due increased sales on the products mentioned above. Our gross profit percentage for 2008 was 84.5%, representing a
decrease from the gross profit percentage of 88.3% in 2007. This decrease in gross profit percentage was primarily a result of a variation
of sales mix during the year. During 2008, we began selling our patellofemoral knee, hip and spine products, which have lower gross
margin percentages than do our knee products (75.5% for hip sales in and 72.2% for spine sales). This decreased our overall gross profit
percentage, as virtually all sales during 2007 were knee products.
55
Research and Development Expenses
Research and development expenses for the year ended December 31, 2008 increased by $1,076, or 420.3%, from the same period
in 2007. The increase was primarily due to $938 of in-process research and development expenses acquired in connection with the
purchase of the non-controlling interest in Accelerated Innovation, LLC in June 2008. In addition, we increased prototype expenses in 2008
for production of our hip replacement prototypes. There were no expenditures for these items in 2007.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the year ended December 31, 2008 increased by $2,993, or 325.0%, as compared to
the same period in 2007. During 2008, we incurred $978 in selling, general and administrative expenses relating primarily to legal and
accounting fees associated with the reverse merger transaction with CKST which occurred on August 29, 2008, which we did not incur in
2007. We also incurred salary and payroll related expenses of $1,185 relating to additional employees hired in 2008. In addition, we
incurred increased depreciation expense of $185 in 2008 as a result of increased capital expenditures for instrumentation and other
equipment necessary to support our growth. We also incurred increased amortization expense of $376 in 2008 as a result of intangible
assets acquired in connection with the purchase of the non-controlling interest in Accelerated Innovation, LLC in June 2008, as well as
amortization of capitalized license fees.
Impairment Expenses
In 2008, we recognized $1,457 in goodwill impairment for the Cervical Xpand LLC purchase. There were no impairment charges in
2007.
Interest Income (Expense)
Net interest expense for the year ended December 31, 2008 amounted to $20, which consisted of interest expense of $48 relating to a
note payable of $1,200 issued in February 2008 and repaid in July 2008, offset by interest income of $28. During 2007, our interest income
amounted to $53. We had no interest expense in 2007, as we had no outstanding debt.
Liquidity and Capital Resources
Net cash used in operating activities was $2,696 for the year ended December 31, 2008 in contrast to $581 for April 6, 2007, inception,
through December 31, 2007. The main uses of cash included expenses in connection with the reverse merger transaction, research and
development costs and salaries.
Net cash used by investing activities was $1,836 for the year ended December 31, 2008 in contrast to an increase of cash from
investing activities of $235 for April 6, 2007, inception, through December 31, 2007. The cash used by investment activities during the year
ended December 31, 2008 primarily was attributable to the purchase of Cervical, Uni, Accelerated Innovation and the reverse merger with
CKST, as well as purchases of instrumentation and other equipment of $515.
Our net cash provided by financing activities was $6,723 for the year ended December 31, 2008 in contrast to $1,250 for April 6, 2007,
inception, through December 31, 2007. The cash provided by financing activities in 2008 consisted of the proceeds from a capital
contribution in 2008, the proceeds of which were used to acquire the remaining minority interests of Cervical, Uni and Accelerated
Innovation.
Over the next 12 months, we intend to use our capital to accelerate our research and product development, to add sales and financing
personnel, to increase in-house vendor-related operations, to increase our inventory levels and for working capital.
In February 2008, Cardo borrowed $1,200 from the trustee of a member of Cardo to partially finance the acquisition of the minority
interests of Cervical Xpand and Uni-Knee for an aggregate purchase price of $3,487. This $1,200 note payable was repaid in July
2008.
56
On June 19, 2008, simultaneously with the signing of the Merger Agreement, Frost Gamma Investments Trust and other investors
invested $9,500 in Cardo in exchange for units of Cardo's membership interests. Dr. Phillip Frost, Chairman and Chief Executive Officer of
Opko Health, Inc., is the trustee and beneficiary of Frost Gamma Investments Trust. Certain other investors invested an additional $3,475
in Cardo before the consummation of the Merger. Proceeds from these investments were used to close on the acquisition of the
outstanding equity interests of Accelerated Innovation, Cervical Xpand and Uni-Knee, and to enable Cardo to accelerate its research and
product development. Following the acquisitions, Cardo directly owns 100% of the equity interests of Accelerated Innovation, Cervical
Xpand and Uni-Knee, as described above. Of these investment amounts, $1,600 remains available for use by us to accelerate our
research and product development. To achieve our growth objectives, we are considering different strategies, including growth through
acquisitions. As a result, we are evaluating and we will continue to evaluate other companies and businesses for potential synergies that
would add value to our existing operations.
At March 27, 2009, we have $1,600 in cash which is not projected to meet all of our working capital needs for the next twelve months.
The fact that the Company sustained losses in 2008 and still requires outside sources of additional capital to sustain operations has
created an uncertainty about the Company's ability to continue as a going concern.
Management intends to use borrowings and securities sales to mitigate the effects of our use of that cash. However, we cannot assure
you that debt or equity financing, if and when required, will be available. Our ability to continue as a going concern is dependent upon
receiving additional funds either through the issuance of debt or through common and/or preferred stock and the success of management's
plan to expand sales. Although we may obtain external financing through the sales of our own securities, there can be no assurance that
such financing will be available, or if available, that any such financing would be on terms acceptable to us. If we are unable to fund our
cash flow needs, we may have to reduce or stop planned growth or scale back operations and reduce staff.
Off-Balance Sheet Arrangements
We have no off-balance sheet financing arrangements.
Contractual Obligations
We had the following aggregate future minimum operating lease payments at September 30, 2009 (in thousands):
Annual periods ending September 30
2010
$                182
2011
81
2012
74
$                337
Forward Looking Statements-Safe Harbor
Our business, financial condition, results of operations, cash flows and prospects, and the prevailing market price and performance of
our common stock, may be adversely affected by a number of factors, including the matters discussed in "Risk Factors".
Certain statements and information set forth in this Form S-1, as well as other written or oral statements made from time to time by us or by
our authorized executive officers on our behalf, constitute "forward-looking statements" within the meaning of the Federal Private Securities
Litigation Reform Act of 1995. We intend for our forward-looking statements to be covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995, and we set forth this statement and the risk factors set forth
herein in order to comply with such safe harbor provisions. You should note that our forward-looking statements speak only as of the date
of this Form S-1 or when made and we undertake no duty or obligation to update or revise our forward-looking statements, whether as a
result of new information, future events or otherwise. Although we believe that the expectations, plans, intentions and projections reflected
in our forward-looking statements are reasonable, such statements are subject to known and unknown risks, uncertainties and other
factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. The risks, uncertainties and other factors that our stockholders and
prospective investors should consider are included in "Risk Factors" beginning on page 3.
57
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
On October 24, 2008, we dismissed Pender Newkirk & Company LLP ("Pender") as our independent registered public
accounting firm. Concurrent with this action on the same date, our audit committee appointed Stonefield Josephson, Inc. ("Stonefield") as
our new independent registered public accounting firm. The decision to change accountants was approved by the audit committee and
ratified by the Board of Directors.
The audit report of Pender on the financial statements of clickNsettle.com, Inc. as of and for the year ended June 30, 2008, did not
contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting
principles.
During the period from October 3, 2007, the date we hired Pender, to the end of the most recent fiscal year on June 30, 2008 and from
July 1, 2008 to the date of our dismissal of Pender, there have been no disagreements with Pender on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure, which if not resolved to Pender's satisfaction, would have
caused it to make reference to the subject matter of the disagreement in connection with its reports. During the same period, there have
been no reportable events, as that term is described in Item 304(a)(1)(v) of Regulation S-K.
We provided Pender with a copy of the foregoing disclosures. A copy of a letter from Pender to the Securities and Exchange
Commission, dated October 24, 2008, was filed as Exhibit 16.1 to the Company's Current Report on Form 8-K filed on October 29, 2008.
During the two most recent fiscal years, and the subsequent interim period prior to engaging Stonefield, neither the Company nor anyone
on its behalf consulted Stonefield regarding the application of accounting principles to a specific transaction, either completed or proposed,
or the type of audit opinion that might be rendered on the Company's financial statements, and no written or oral advice was provided by
Stonefield that was a factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issues
as set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information, as of December 14, 2009, concerning the individuals named below, including their ages
and their positions as of December 14, 2009):
Name
Age
Position
Andrew A. Brooks, M.D.
47
Chairman of the Board and Chief Executive Officer
Mikhail Kvitnitsky
45
President, Chief Operating Officer and Director
Derrick Romine
41
Chief Financial Officer and Secretary
Joseph Loggia
49
Director
Thomas H. Morgan
56
Director
Ronald N. Richards, Esq.
42
Director
Steven D. Rubin
49
Director
Subbarao Uppaluri, Ph.D.
59
Director
Note - our Directors serve a term of one year.
Business Experience of Directors and Executive Officers During the Past Five Years
Andrew A. Brooks, M.D.
Dr. Brooks serves as our Chairman of the Board and Chief Executive Officer. He founded Cardo
Medical, LLC on April 6, 2007, and has served as the President and Chief Executive Officer and manager of Cardo and of
Accelerated Innovation, LLC. Dr. Brooks has been in the private practice of orthopedic surgery since 1994, specializing in sports medicine,
arthroscopy and joint reconstruction. He has previously served as a design consultant to major companies for joint reconstruction and
sports medicine products. He currently maintains a part time surgical practice at the Southern California Orthopedic Institute in Van Nuys,
California.
58
Dr. Brooks was a founder and managing partner of Specialty Surgical Centers, a group of multi-specialty outpatient surgical centers
operating in Beverly Hills, Encino, Irvine, Arcadia and Westlake Village. These surgical centers were sold to Symbion Healthcare, Inc. in
August 2005. Dr. Brooks currently serves as a managing partner of Specialty Surgical Center in Westlake Village. Dr. Brooks also
co-founded the Ridgecrest Sports Rehabilitation Center in 1995, which was sold to a public company in February 1998.
Dr. Brooks is a graduate of the University of Southern California School of Medicine. He completed his residency in Orthopaedic
Surgery at the University of Southern California, and subsequently completed a fellowship in arthroscopic reconstructive surgery and
sports medicine at the Hughston Clinic in Columbus, Georgia. Dr. Brooks is board-certified by the American Board of Orthopaedic Surgery
and is a Fellow of the American Academy of Orthopaedic Surgeons. He is also a Fellow of the American College of Surgeons and a
member of the Arthroscopy Association of North America. He is an active member of the Los Angeles
Chapter of the Young Presidents Organization.
Michael Kvitnitsky.
Mr. Kvitnitsky serves as our President and Chief Operating Officer and as a director of our
company. Since May 2007, Mr. Kvitnitsky has served as the Chief Operating Officer and manager of Cardo Medical, LLC and
Accelerated Innovation, LLC. He also has served as the President and manager of Cervical Xpand, LLC, a developmental-stage spinal
company, since July 2005, and of Uni-Knee, LLC, a developmental-stage orthopedic company, since May 2006. Mr. Kvitnitsky
founded Accin Corporation, a medical device company, for which he has served as President, Chief Executive Officer and director since
February 2005. Prior to that, Mr. Kvitnitsky was employed by Stryker Corporation (NYSE: SYK) from 1998 until January 2005; his
last position with Stryker was Vice President, Innovation and Business Development, of Stryker International. His prior employment, from
1990 to 1998, included engineering and research positions with multinational medical device companies in the United States and, from
1986 to 1989, included research institutions in Ukraine.
Derrick Romine.
Mr. Romine serves as our Chief Financial Officer and Secretary. Since February 2008,
Mr. Romine has served as the Chief Financial Officer of Cardo Medical, LLC. Prior to joining Cardo, he worked for 18 years in
all aspects of finance and strategy, including corporate restructuring, capital structure management and organizational development. Most
recently, from 2004 to February 2008, Mr. Romine served as Controller for Specialty Surgical Centers, following its acquisition
by Symbion Healthcare, Inc. From 2000 to 2004, Mr. Romine held a key financial position at Doane Pet Care, Inc. As Doane's
Director of Financial Planning and Control, he orchestrated financial modeling for the largest private label pet food manufacturer globally.
Prior to that, from 1997 to 2000, he worked in strategic projects as Director of Strategy & Analysis at Service Merchandise
Corporation, a retail company, where he focused specifically on corporate restructure and capital management. Prior to 1997,
Mr. Romine held various financial and operational positions in both the public and private sector.
Joseph Loggia.
Mr. Loggia serves as a director of our company. Mr. Loggia has served as the Chief Executive
Officer of Advanstar, Inc. and its wholly-owned subsidiary, Advanstar Communications, Inc., a leading worldwide media company providing
integrated marketing solutions for the fashion, life sciences and powersports industries, since January 2004. As Chief Executive
Officer, he led Advanstar's effort to develop and implement a new strategy, transforming the company from a traditional B2B publisher and
trade show producer to a market-focused media company, culminating in a $1.14 billion sale of the company in 2007 to Veronis
Suhler Stevenson, LLC, a private equity firm focusing on media, communications, information and education industries in North America
and Europe. From 2001 through 2003, Mr. Loggia served as President and Chief Operating Officer of Advanstar, leading the
company's efforts to enhance its operating efficiencies and implementing state-of-the-art data systems, new business development
procedures and rewards, and a new growth-
based management compensation system. From 1995 through
1998, he served as President and Chief Executive Officer of MAGIC International, producer of the MAGIC Marketplace apparel trade show,
leading the acquisition of MAGIC by Advanstar in 1998. Prior to joining MAGIC, Mr. Loggia, who is a certified public accountant, was a
manager at the accounting firm of Coopers & Lybrand in its fraud and financial investigations division, after having spent
10 years in law enforcement.
59
Thomas H. Morgan.
Mr. Morgan serves as a director of our company.  He is the Managing Member of Morgan
Exploration, LLC, Morgan Marathon, LLC and Morgan United, LLC.  Since 1982, Mr. Morgan also has been the founder and President of
Morgan Energy Corporation, an oil and gas exploration company.  Prior to that, he worked for Conoco Oil Company and Gulf Oil Company.
Mr. Morgan has drilled, developed and owned interests in thousands of oil and gas wells throughout the Rocky Mountain region, Texas and
Oklahoma.  Through other entities, since 1985, Mr. Morgan has owned and developed numerous shopping centers, apartment complexes,
condo towers and luxury single-family residences throughout the United States.
Ronald N. Richards, Esq.
Mr. Richards serves as a director of our company. Mr. Richards has
represented Specialty Surgical Centers, as one of its litigation counsel, and other medical professionals and clinics throughout Southern
California. Since 2000, he was the senior partner of Ronald Richards & Associates based in Beverly Hills, California. Since 2003, Mr.
Richards has served as Secretary of Sierra Towers Homeowners Association. Mr. Richards was a professor of law at the San
Fernando Valley College of Law from 2006 to 2007. He has had numerous published opinions in the state courts and federal courts of
appeal. Mr. Richards lectures to other attorneys on various legal matters and has published works on various related medical topics.
In 2008, he obtained a Certificate of Management from the Anderson School of Management at the University of California, Los Angeles .
Mr. Richards received his law degree from University of La Verne in 1995 and his undergraduate degree from the University of
California, Los Angeles, in 1991.
Steven D. Rubin.
Mr. Rubin serves as a director of our company. Mr. Rubin has served as Executive
Vice President-Administration and as a director of OPKO Health, Inc. since May 2007. Mr. Rubin served as the Senior Vice President, General Counsel
and Secretary of IVAX from August 2001 until September 2006. Prior to joining IVAX, Mr. Rubin was Senior Vice President, General
Counsel and Secretary with privately-held Telergy, Inc., a provider of business telecommunications and diverse optical network solutions,
from early 2000 to August 2001. In addition, he was with the Miami law firm of Stearns Weaver Miller Weissler Alhadeff & Sitterson
from 1986 to 2000, in the Corporate and Securities Department. Mr. Rubin had been a shareholder of that firm since 1991 and a director
since 1998. Mr. Rubin currently serves on the board of directors of Dreams, Inc., a vertically integrated sports licensing and products
company, Safestitch Medical, Inc., a medical device company, Prolor Biotech, Inc., a development stage biopharmaceutical company,
Kidville, Inc., which operates large, upscale facilities, catering to newborns through five-year-old children and their families and offers a
wide range of developmental classes for newborns-5 year olds, Non-Invasive Monitoring Systems, Inc., a medical device company, Castle
Brands, Inc., a developer and marketer of premium brand spirits, SearchMedia Holdings Limited, a leading nationwide multi-platform media
company based in Shanghai, China and Neovasc, Inc., a company developing and marketing medical specialty vascular devices.
Subbarao Uppaluri, Ph.D.
Dr. Uppaluri serves as a director of our company. Dr. Uppaluri has served as Senior Vice
President and Chief Financial Officer of OPKO Health, Inc. since May 2007. Dr. Uppaluri served as the Vice President, Strategic Planning
and Treasurer of IVAX from 1997 until December 2006. Before joining IVAX, from 1987 to August 1996, Dr. Uppaluri was Senior Vice
President, Senior Financial Officer and Chief Investment Officer with Intercontinental Bank, a publicly traded commercial bank in Florida. In
addition, he served in various positions, including Senior Vice President, Chief Investment Officer and Controller, at Peninsula Federal
Savings & Loan Association, a publicly traded Florida S&L, from October 1983 to 1987. His prior employment, during 1974 to
1983, included engineering, marketing and research positions with multinational companies and research institutes in India and the United
States. Dr. Uppaluri currently serves on the board of directors of Kidville, Inc., which operates large, upscale facilities, catering to newborns
through five-year-old children and their families and offers a wide range of developmental classes for newborns-5 year olds, Non-Invasive
Monitoring Systems, Inc., a medical devices company, and Winston Pharmaceuticals Inc., a specialty pharmaceutical company engaged in
the discovery and development of products for pain management.
Relationship among Directors and Executive Officers
Pursuant to the terms of the Merger Agreement, Dr. Brooks nominated Messrs. Kvitnitsky, Loggia, Morgan and Richards
and himself to serve as our directors, and Dr. Phillip Frost nominated Mr. Rubin and Dr. Uppaluri to serve as our
directors. No family relationships exist among any of the individuals who will serve as our directors or executive officers.
60
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth a summary of compensation awarded to, earned by or paid to the principal executive officers and
principal financial officers of Cardo.
Name and
Principal
All Other
Position
Year
Salary
Bonus
Stock Options
Compensation
Total
Andrew A. Brooks (1)
2008
$              250,000
$                      -
$                 29,250
$                         -
$      279,250
Mikhail Kvitnitsky (2) (3)
2008
220,000
-
26,000
-
246,000
2007
52,000
-
-
30,276
82,276
Derrick Romine (4)
2008
180,000
-
61,100
-
241,100
(1) Dr. Brooks currently serves as our Chairman of the Board and Chief Executive Officer. He has served as the President, Chief
Executive Officer and manager of Cardo Medical ,LLC since May 2007 and Accelerated Innovation, LLC from May 2007 until its
merger with Cardo Medical, LLC.
(2) Mr. Kvitnitsky currently serves as our President and Chief Operating Officer and as a director of our company.
Mr. Kvitnitsky has served as the Chief Operating Officer and manager of Cardo Medical, LLC since May 2007 and Accelerated
Innovation, LLC from May 2007 until its merger with Cardo Medical, LLC. He also has served as the President and manager of Cervical
Xpand, LLC since July 2005, and of Uni-Knee, LLC since May 2006 until their mergers with Cardo Medial, LLC.
Mr. Kvitnitsky founded Accin Corporation, for which he has served as President, Chief Executive Officer and director since
February 2005. The information presented in this table reflects all compensation received by Mr. Kvitnitsky from Cardo,
Accelerated Innovation, Cervical Xpand, Uni-Knee and Accin on a consolidated basis for the applicable periods.
(3) These amounts reflect 5% of the net receipts from the sale of the Align 360 unicompartmental knee product, which
Mr. Kvitnitsky was entitled to receive per his compensation arrangement with us. See "Employment Agreements and Change in
Control Arrangements-Compensation Arrangement with Michael Kvitnitsky" below.
(4) Mr. Romine currently serves as our Chief Financial Officer and Secretary. He has served as the Chief Financial Officer of
Cardo Medical, LLC since February 2008.
Director Compensation
The following table sets forth a summary of compensation awarded to, earned by or paid to each director for the fiscal year ended
December 31, 2008.
We anticipate reimbursing each director for reasonable travel expenses related to that director's attendance at Board of Directors and
committee meetings.
Fees Earned or
All Other
Name
Paid In Cash
Compensation
Total
Joseph Loggia
$                                 -
$                      5,000
$           5,000
Thomas H. Morgan
-
5,000
5,000
Ronald N. Richards, Esq.
-
5,000
5,000
Steven D. Rubin
-
5,000
5,000
Subbarao Uppaluri
-
5,000
5,000
Compensation of Named Executive Officers
Commencing August 29, 2008, the closing date of the Merger, the annual compensation for our executive officers is as follows:
Name and
Principal
(1) Bonus
Position
Salary
Potential
Total
Andrew A. Brooks, Chief Executive Officer
$                    250,000
$              250,000
$             500,000
Mikhail Kvitnitsky, President and Chief Operating Officer
$                    220,000
$              220,000
$             440,000
Derrick Romine, Chief Financial Officer and Secretary
$                    180,000
$                45,000
$             225,000
(1) The amount reflected in this column reflects the maximum potential bonus that our Board of Directors may grant to each of the
above executive officers.
61
Equity Incentive Plan
Our Board of Directors will consider adopting and implementing an equity incentive plan, pursuant to which we may grant various types
of equity and equity-based awards to our executives, employees and contractors, including awards of stock options and restricted stock.
Awards made pursuant to the plan may be made subject to the attainment of performance goals relating to one or more business criteria. If
adopted, this plan is intended to assist our company in attracting, retaining and motivating designated eligible employees and independent
contractors of ours and our subsidiaries and to increase their interest in the success of our company in order to promote our long-term
interests. This plan will be designed to meet this intent by providing designated eligible persons with a proprietary interest in pursuing the
long-term growth, profitability and financial success of our company.
The Compensation Committee of our Board of Directors, is expected to have complete authority, subject to the express provisions of
the plan, to approve the employees or contractors to be granted awards, to determine the number of stock options or other awards to be
granted, to set the terms and conditions of the awards, to remove or adjust any restrictions and conditions upon those awards, and to
adopt rules and regulations, and to make all other determinations deemed necessary or desirable for the administration of this plan.
Employment Agreements and Change in Control Arrangements
Michael Kvitnitsky Employment Agreement, as Terminated as of June 23, 2008
On January 31, 2005, Michael Kvitnitsky entered into an employment agreement with Accin Corporation, under which he served
as Chief Executive Officer of Accin. Accin assigned this agreement to Cardo's wholly-owned subsidiary, Accelerated Innovation, LLC, on
May 21, 2007, along with substantially all of the other assets of Accin. On June 6, 2008, Mr. Kvitnitsky and Accelerated
Innovation entered into an amendment to this employment agreement to remove references to a shareholders agreement for Accin. On
June 23, 2008, Cardo acquired all of the ownership interests in Accelerated Innovation held by Accin, and Accelerated Innovation
became the wholly-owned subsidiary of Cardo. Upon the closing of this acquisition, Mr. Kvitnitsky and Accelerated Innovation terminated
Mr. Kvitnitsky's employment agreement.
Prior to its termination, the term of the employment agreement was from June 1, 2005 through May 30, 2008, with
automatic renewal thereafter for successive one-year periods ending on each May 30, unless (i) either party elected to
terminate the employment agreement at the end of the then-current term by giving the other party four months' advance written notice, or
unless the agreement was earlier terminated by Accelerated Innovation for "Cause" or by Mr. Kvitnitsky for "Good Reason," as defined in
the employment agreement. The employment agreement was automatically renewed for one year on May 30, 2008 and terminated
by mutual agreement effective June 23, 2008. Under this employment agreement, Mr. Kvitnitsky was entitled to receive the
following compensation and benefits:
Initial annual base salary of $52,000; Eligibility to receive stock options upon implementing a stock option plan; Eligibility to share in
"milestone" payments; Five weeks of paid time off, including sick, vacation and personal days; Reimbursement for all reasonable and
necessary business-related expenses; Participation in the life and health insurance plans, 401(k) plan and other employee benefit plans
and programs generally made available to other employees; and certain severance benefits if his employment was terminated by
Accelerated Innovation without Cause or by Mr. Kvitnitsky for Good Reason. If Mr. Kvitnitsky fails to perform his duties under this
agreement or to otherwise comply with the terms of this agreement, or if Mr. Kvitnitsky does not cure that failure within 30 days after his
receipt of written notice of the failure, his employment will be terminated.  Mr. Kvitnitsky will be afforded a reasonable opportunity to be
heard by the Board of Directors prior to termination.
Compensation Arrangement with Michael Kvitnitsky, as Terminated as of June 23, 2008
Michael Kvitnitsky was entitled to receive 5% of net receipts from the sale of the Align 360 unicompartmental knee product. For the
year ended December 31, 2006, Accin (the party from which Cardo acquired its medical device business in 2007) paid $100,000 to Mr.
Kvitnitsky under this arrangement, and paid him $6,863 for the period from January 1, 2007 through May 21, 2007 (the date of sale of
Accin's business to Cardo). For the period from May 21, 2007 through December 31, 2007, Accelerated Innovation (which acquired Accin's
medical device business) paid $22,918 to Mr. Kvitnitsky under this arrangement, and paid him $26,933 for the six months ended June 30,
2008.
62
Derrick Romine Employment Offer Letter
Derrick Romine serves as the Chief Financial Officer of Cardo, and will serve in that same capacity for Cardo, on an at-will basis
pursuant to an employment offer letter dated September 5, 2008. This offer letter provides that Mr. Romine will receive an
annual base salary of $180,000, a discretionary bonus of up to a maximum amount of $45,000 based on specific performance objectives
tied to Cardo meeting its financial targets, and reimbursement for normal business expenses. In addition, he is entitled to participate in all
health insurance and employee benefits adopted by Cardo and is eligible to accrue three weeks of vacation during his first year of
employment. The offer letter also confirmed the grant of options to Mr. Romine exercisable for units of membership interests in
Cardo, which converted into options exercisable for shares of common stock of Cardo upon completion of the Merger. See the section
titled "Outstanding Option Grants" below for more information regarding the options granted to Mr. Romine.
If Cardo terminates Mr. Romine's employment without "Cause" (as defined below), or if he terminates his employment without
"Good Reason" (as defined below), at any time on or prior to September 4, 2010, Mr. Romine will be entitled to the following
severance benefits: Cardo will pay Mr. Romine the sum of six months of his then-current monthly salary as severance payment to be
paid in bi-weekly installments so long as he does not work or otherwise provide services to a competitor of Cardo during that six-month
period. Fifty percent of Mr. Romine's unvested options will become fully exercisable as of the date of termination of his employment
and, together with any vested options at the termination date, may be exercised pursuant to the terms thereof within 90 days of the
termination date (or one year after the termination date if Mr. Romine dies during that 90-day period). The remaining unvested
options at the termination date, to the extent not then presently exercisable, shall terminate as of the termination date and shall not be
exercisable thereafter.
If Mr. Romine is terminated for Cause, or if he voluntarily terminates his employment or resigns from his positions with the
Company without Good Reason, he will not be entitled to the Severance Benefits. As used in the offer letter, the term "Cause" means an
act or omission that constitutes fraud, deceit, intentional misconduct, a knowing violation of law, recklessness or gross negligence that
materially and adversely has affected or affects the business of Cardo, a material breach of any of Mr. Romine's obligations under
any written agreement with Cardo, or material nonperformance of his duties to Cardo which has not been cured after 15 days' written
notice from Cardo setting forth in reasonable detail the nature of the nonperformance. As used in the offer letter, the term "Good Reason"
means a material breach by Cardo of any of their obligations under any written agreement with Mr. Romine, a substantial and
unusual reduction in his duties, responsibilities or authority, or receipt of instructions to take actions in violation of law that has not been
cured after 15 days' written notice from Mr. Romine to Cardo and setting forth in reasonable detail the nature of the action
giving rise to the claim of Good Reason.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth information with respect to the beneficial ownership of our outstanding common stock as of
December 14, 2009, by (i) each nominee for director of ours, (ii) each named executive officer identified in the
Summary Compensation Table, (iii) all nominees for director and nominees for executive officers as a group, and (iv) each
stockholder identified as beneficially owning greater than 5% of our common stock. Except as otherwise indicated below, each person
named in the tables has sole voting and investment power with respect to all shares of common stock beneficially owned by that person,
except to the extent that authority is shared by spouses under applicable law. To our knowledge, none of the shares reported below are
pledged as security.
For purposes of the following tables, a person is deemed to be the beneficial owner of securities that can be acquired by that person
within 60 days from December 14, 2009 upon exercise of options, warrants and/or other convertible or exercisable securities. Each
beneficial owner's percentage ownership is determined by assuming that options, warrants and other convertible or exercisable securities
that are held by that person (but not those held by any other person) and that are convertible or exercisable within the 60-day period have
been exercised. The percentage of outstanding common shares has been calculated based upon 230,293,141 shares of common stock
outstanding on December 14, 2009. None of the stockholders listed below have any options, warrants or other derivative securities with
respect to our common stock that are convertible or exercisable within 60 days from December 14, 2009.
63
Shares of Common Stock
Beneficially Owned
Amount and Nature of
Directors and Officers
Beneficial Ownership
Percent of Class
Andrew A. Brooks, M.D.
61,868,189
26.87
%
Mikhail Kvitnitsky
28,956,653
12.57
%
Joseph Loggia
8,000
*
Thomas H. Morgan
7,863,615
3.42
%
Ronald N. Richards, Esq.
675,205
*
Derrick Romine
771,941
*
Steven D. Rubin
53,197
*
Subbarao Uppaluri, Ph.D.
346,967
*
All directors and executive officers as a group (8 persons)
100,543,767
43.66
%
*Indicates ownership of less than 1%.
Shares of Common Stock
Beneficially Owned
Number and Nature of
5% or More Shareholders (1)
Beneficial Ownership
Percent of Class
Frost Gamma Investments Trust (2)
33,250,911
14.44
%
(1) Based on information in separate Schedule 13D dated September 8, 2008, Andrew A. Brooks, M.D. and Michael Kvitnitsky
also are 5% or more stockholders. The business address of Andrew A. Brooks and Michael Kvitnitsky is 9701 Wilshire Boulevard, Suite
1100, Beverly Hills, CA 90212.
(2) Based on information in Amendment No. 2 to Schedule 13D dated December 8, 2009, Frost Gamma Investments Trust holds
33,250,911 shares of common stock. The business address of Frost Gamma Investments Trust is 4400 Biscayne Boulevard,
Suite 1500, Miami, Florida 33137. Phillip Frost, M.D. is the trustee and Frost Gamma Limited Partnership is the sole and exclusive
beneficiary of Frost Gamma Investments Trust.
64
Outstanding Option Grants
In August 2008, Cardo LLC issued options exercisable for units of membership interests in Cardo LLC with an exercise price of
$147,625 per unit (which is not less than the fair market value on the date of grant). Each option has a term of 10 years and vests in
equal installments over a five-year period commencing on the first anniversary of the date of grant. In connection with the Merger, these
options converted into options exercisable for shares of our common stock with an exercise price of $0.22126 per share (which is not less
than the fair market value on the date of grant). The following table provides information with respect to (i) the name and relation of
the optionee to Cardo, (ii) the number of units of membership interests in Cardo that may be acquired pursuant to an exercise of the
options, and (iii) the number of shares of Cardo's common stock that may be acquired pursuant to an exercise of the options, in
each case subject to the terms of the options:
Number of
Cardo Shares
pursuant to
Name and Relation
Option Exercise
Andrew A. Brooks, MD
225,000
President, Chief Executive Officer and Director
Mikhail Kvitnitsky,
200,000
Chief Operating Officer and Director
Derrick Romine,
470,000
Chief Financial Officer
Joseph Loggia,
40,000
Director
Thomas H. Morgan,
40,000
Director
Ronald N. Richards,
40,000
Director
Steven D. Rubin,
40,000
Director
Subbarao Uppaluri, PhD
40,000
Director
Equity Compensation Plan Information
The following table summarizes the number of outstanding options granted to employees, service providers and directors
under the Company's compensation plans and arrangements as of the quarter ended September 30, 2009.
For a description of equity compensation plans not approved by security holders see Note 12 to the Consolidated Financial
Statements for the year ended December 31, 2008 included elsewhere in this registration statement.
Number of securities
Number of securities
to be issued upon
Weighted-average
remaining available
exercise of
exercise price of
for future issuance
outstanding options,
outstanding options,
under equity
warrants and rights
warrants and rights
compensation plans
Equity compensation plans
not approved by security holders
2,358,400
$                                   0.23
-
Equity compensation plans
approved by security holders
-
-
-
Total
2,358,400
$                                   0.23
-
65
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
The Company appointed Ladenburg as the Company's exclusive placement agent for the private placement offering that closed in
October and November 2009.  Dr. Phillip Frost, through Frost Gamma Investments Trust, is a common principal stockholder of both the
Company and of Ladenburg.  Furthermore, certain senior managers of the placement agent are stockholders of the Company.  After
reviewing all information related to the transaction between the Company and Ladenburg, a potential related party transaction, the
Company's Audit Committee approved the related party transaction.  Ladenburg, as the placement agent, for acting in such capacity for
the shares of common stock offered in the private placement offering, received: (i) a cash commission equal to eight percent (8%) of the
gross proceeds from the offering that was received from Approved Investors; (ii) a cash non-accountable expense allowance equal to one
percent (1%) of the gross proceeds of the offering to Approved Investors; (iii) reimbursement of Ladenburg's out-of-pocket expenses
related to the offering, including its legal fees and expenses up to $40,000; and (iv) the issuance to Ladenburg of warrants to purchase
575,613 shares of common stock equal to six percent (6%) of the number of shares sold in the offering to Approved Investors, at an
exercise price of $0.44 per share.  The approximate dollar value of the related party transaction is $317,198.
CORPORATE GOVERNANCE
Director Independence
Of the seven members of the Board of Directors five are determined to be independent, they are Joseph Loggia, Thomas H. Morgan,
Steven D. Rubin, Ronald N. Richards and Subbarao Uppaluri, all of whom are independent directors as determined by the rules of NYSE
AMEX, LLC (formerly the American Stock Exchange).
Audit Committee
The members of the Audit Committee are Subbarao Uppaluri, Thomas H. Morgan and Joseph Loggia, all of whom are independent
directors as determined by the rules of NYSE AMEX, LLC (formerly the American Stock Exchange). The responsibilities and duties of the
Audit Committee consist of but are not limited to: (1) overseeing the financial reporting process; (2) meeting with our external auditors
regarding audit results; (3) engaging and ensuring independence of our outside audit firm and (4) reviewing the effectiveness of the
Company's internal controls. Our Board has determined that Mr. Loggia and Mr. Uppaluri qualify as Audit Committee financial experts
within the meaning of applicable regulations of the SEC, promulgated pursuant to the Sarbanes-Oxley Act of 2002.
MATERIAL CHANGES
None
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
None
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The Company's Amended and Restated Certificate of Incorporation provides that the Company will indemnify an officer, director,
or former officer or director, to the fullest extent permitted under the General Corporation Law of the State of Delaware or any other
applicable laws as presently or thereafter in effect.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons
controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.
LEGAL MATTERS
The validity of the shares of common stock offered through this prospectus will be passed on by Akerman Senterfitt.
66
EXPERTS
The financial statements for the years ended December 31, 2007 and 2008, included in this prospectus to the extent and for the
periods indicated in their reports, have been audited by Stonefield Josephson, Inc., independent registered public accountants, and are
included herein in reliance upon the authority of such firm as experts in accounting and auditing in giving such reports.
HOW TO GET MORE INFORMATION
We file annual, quarter and periodic reports, proxy statements and other information with the Securities and Exchange
Commission using the Commission's EDGAR system. You may inspect these documents and copy information from them at the
Commission's public reference room at 100 F Street, NE, Washington, D.C. 20549. You may obtain information on the operation of the
public reference room by calling the SEC at 1-800-SEC-0330. The Commission maintains a web site that contains reports, proxy and
information statements and other information regarding registrants that file electronically with the Commission. The address of such site is
http//www.sec.gov.
You should rely only on the information contained in this prospectus. We have not authorized any person to provide you with any
information that is different.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13 - OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Amount
Securities and Exchange Commission Registration Fee
$624.03
Legal Fees and Expenses
60,000
Accounting Fees and Expenses
7,000
Miscellaneous Expenses
3,000
Total
$70,624.03
All amounts are estimates, other than the SEC's registration fee.
We are paying all expenses of the offering listed above.  No portion of these expenses will be borne by the selling stockholders.  The
selling stockholders; however, will pay any other expenses incurred in selling their common stock, including any brokerage commissions or
costs of sale.
ITEM 14 - INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Amended and Restated Certificate of Incorporation provides that the Company will indemnify an officer, director,
or former officer or director, to the fullest extent permitted under the General Corporation Law of the State of Delaware or any other
applicable laws as presently or thereafter in effect.  The Company is also party to an Indemnification Agreement with Directors and Officers
of the Company filed as Exhibit 10.12.  The Company must indemnify the Directors and Officers to the fullest extent permitted by law.
ITEM 15 - RECENT SALES OF UNREGISTERED SECURITIES
On June 30, 2009, Cardo Medical, Inc. closed on the sale of 8,689,319 shares of the Company common stock, par value $0.001
per share at a price of $0.35 per share for aggregate gross proceeds of $3,041,260.  The offering of common stock was conducted by the
Company in a non-brokered private placement to accredited investors pursuant to an exemption from registration provided by Section 4(2)
of the Securities Act of 1933, as amended.  The Company believes the exemption is available because the securities were not offered
pursuant to a general solicitation and the status of the investors as "accredited investors" as defined in Regulation D of the
Securities Act of 1933, as amended.
On September 21, 2009, Cardo Medical, Inc. closed on the sale of 485,714 shares of the Company common stock, par value $0.001
per share at a price of $0.35 per share for aggregate gross proceeds of $170,000.  The offering of common stock was the second tranche
of the June 30, 2009 offering referred to above.  The Company conducted the offering of common stock in a non-brokered private
placement to accredited investors pursuant to an exemption from registration provided by Section 4(2) of the Securities Act of 1933, as
amended.  The Company believes the exemption is available because the securities were not offered pursuant to a general solicitation and
the status of the investors as "accredited investors" as defined in Regulation D of the Securities Act of 1933, as amended.
67
On October 27, 2009, Cardo Medical, Inc. sold 9,949,276 shares of common stock, par value $0.001 per share of the Company at a
price of $0.35 per share for aggregate gross proceeds of $3,482,250 as part of a private placement for maximum gross proceeds of
$6,500,000.  The Company relied on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended for the issuance of
the shares of common stock in the Company, which exception the Company believed was available because the securities were not
offered pursuant to a general solicitation and the status of the investors as "accredited investors" as defined in Regulation D of
the Securities Act, as amended.
On November 13, 2009, Cardo Medical, inc. sold 7,808,561 shares of common stock, par value $0.001 per share of the Company at a
price of $0.35 per share for aggregate gross proceeds of $2,733,000 in the second tranche of the prior private placement for maximum
gross proceeds of $6,500,000.  The November 13, 2009 closing completed the private placement.  The Company relied on the exemption
provided by Section 4(2) of the Securities Act of 1933, as amended for the issuance of the shares of common stock in the Company, which
exception the Company believed was available because the securities were not offered pursuant to a general solicitation and the status of
the investors as "accredited investors" as defined in Regulation D of the Securities Act, as amended.
ITEM 16 - EXHIBITS
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Incorporated By Reference
Exhibit Number
Exhibit Description
Form
File Number
Exhibit
Filing Date
2.1
Merger Agreement and Plan of Reorganization, dated as of June 18, 2008, by and among clickNsettle.com, Inc.,
Cardo Medical, LLC and Cardo Acquisition, LLC.
8-K
000-21419
2.1
June 23, 2008
2.2
First Amendment to Merger Agreement and Plan of Reorganization, dated as of August 29, 2008, by and among
clickNsettle.com, Inc., Cardo Medical, LLC and Cardo Acquisition, LLC.
8-K
000-21419
2.2
September 9, 2008
2.3
Asset Purchase Agreement, dated September 30, 2009, by and among Cardo Medical, Inc. and Vertebron,
Inc.
8-K
000-21419
2.1
October 6, 2009
3.1
Amended and Restated Certificate of Incorporation
8-K
000-21419
3.1
March 18, 2008
3.2
Amended and Restated Bylaws.
8-K
000-21419
3.1
February 1, 2008
5.1#
Opinion of Akerman Senterfitt
10.1
Escrow Agreement, dated as of August 29, 2008, by and among Chicago Title Company, clickNsettle.com, Inc.
Andrew A. Brooks, M.D. and Mikhail Kvitnitsky.
8-K
000-21419
10.1
September 9, 2008
10.2
Form of Lockup Agreement.
8-K
000-21419
10.2
September 9, 2008
10.3
Lockup Agreement, dated August 29, 2008, for Derrick Romine.
8-K
000-21419
10.3
September 9, 2008
10.4
Amended and Restated 1996 Incentive and Nonqualified Stock Option Plan.
10-KSB
September 28, 1998
68
10.5*
Form of Cardo Medical, LLC Nonstatutory Option Agreement
8-K
000-21419
10.5
September 9, 2008
10.6
Stock Purchase Agreement, dated as of December 19, 2007, by and among clickNsettle.com, Inc., Frost Gamma
Investments Trust, Dr. Jane Hsiao, Steven D. Rubin and Subbarao Uppaluri.
8-K
000-21419
10.1
December 21, 2007
10.7
First Amendment to Stock Purchase Agreement, dated as of January 31, 2008, by and among clickNsettle.com, Inc.,
Frost Gamma Investments Trust, Dr. Jane Hsiao, Steven D. Rubin and Subbarao Uppaluri.
8-K
000-21419
10.2
February 1, 2008
10.8*
Employment Agreement, dated as of January 31, 2005, by and between Accelerated Innovation, LLC, as successor
to Accin Corporation, and Mikhail Kvitnitsky.
8-K
000-21419
10.8
September 9, 2008
10.9*
Amendment to Employment Agreement, dated as of June 6, 2008, by and between Accelerated Innovation, LLC and
Mikhail Kvitnitsky.
8-K
000-21419
10.9
September 9, 2008
10.10*
Termination Agreement, effective as of June 23, 2008, by and between Accelerated Innovation, LLC and Mikhail
Kvitnitsky.
8-K
000-21419
10.10
September 9, 2008
10.11*
Employment Offer Letter with Derrick Romine dated September 5, 2008.
8-K
000-21419
10.11
September 9, 2008
10.12
Form of Indemnification Agreement for officers and directors.
8-K
000-21419
10.12
September 9, 2008
10.13+
Agreement, dated as of August 22, 2006, by and between Accelerated Innovation, LLC, as successor to Accin
Corporation, and Infinesse Corporation.
8-K
000-21419
10.13
September 9, 2008
10.14
Supplier Agreement, dated June 16, 2006, between Stelkast Company and Accelerated Innovation, LLC, as
successor to Accin.
8-K
000-21419
10.14
September 9, 2008
10.15+
Contracted Services Agreement, dated September 1, 2007, by and between Accelerated Innovation, LLC and Summit
Corporate Services, Inc.
8-K
000-21419
10.15
September 9, 2008
10.16
Agreement dated April 30, 2008, by and among Mikhail Kvitnitsky and Accelerated Innovation, LLC, Cervical Xpand,
LLC and Uni-Knee, LLC.
8-K
000-21419
10.16
September 9, 2008
10.17
Agreement dated April 30, 2008, by and among John D. Kuczynski, Accelerated Innovation, LLC and Uni-Knee,
LLC.
8-K
000-21419
10.17
September 9, 2008
10.18
Agreement dated April 30, 2008, by and among Richard H. Rothman, M.D., Ph.D., Accelerated Innovation, LLC and
Cervical Xpand, LLC.
8-K
000-21419
10.18
September 9, 2008
10.19
Agreement dated April 30, 2008, by and among Todd J. Albert, M.D., Accelerated Innovation, LLC and Cervical
Xpand, LLC.
8-K
000-21419
10.19
September 9, 2008
69
10.20
Agreement dated April 28, 2008, by and among, Rafail Zubok, Accelerated Innovation, LLC and Cervical Xpand,
LLC.
8-K
000-21419
10.20
September 9, 2008
10.21*
Nonstatutory Option Agreement, dated August 27, 2008, by and between Cardo Medical, LLC and Derrick
Romine.
10-Q
000-21419
10.1
November 14, 2008
10.22
Form of Registration Rights Agreement, dated October 27, 2009, by and among Cardo Medical, Inc. and the Several
Purchasers.
8-K
000-21419
10.1
October 29, 2009
21.1
Subsidiaries of clickNsettle.com, Inc.
8-K
000-21419
21.1
September 9, 2008
23.1#
Consent of Stonefield Josephson, Inc.
23.2#
Consent of Akerman Senterfitt (included in Exhibit 5.1)
#
Filed herewith.
*
Management compensation plan or agreement.
+
Confidential Treatment has been requested as to a portion of this exhibit.  The confidential portion of this exhibit has
been omitted and filed separately with the Securities and Exchange Commission.
ITEM 17 - UNDERTAKINGS
UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the
registration statement.  Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be
deemed to be the initial
bona fide
offering thereof.
70
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4) For determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that
was made in the registration statement or prospectus that was part of the registration statement or made in any such document
immediately prior to such date of first use.
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule
424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by
the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
71
CARDO MEDICAL, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Documents for the fiscal year ended December 31, 2008, extracted from our annual report on Form 10-K filed with the
Securities and Exchange Commission on March 31, 2009:
Report of Independent Registered Accounting Firm for the years ended December 31, 2008 and 2007
Financial Statements
Consolidated Balance Sheets at December 31, 2008 and 2007
Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2008 and 2007
Consolidated Statements of Shareholders' Equity (Deficiency) for the years ended December 31, 2008 and 2007
Consolidated Statements of Cash Flows for the years ended December 31, 2008 and 2007
Notes to Consolidated Financial Statements
Unaudited Financial Statements for the Nine Months Ended September 30, 2009, extracted from our quarterly report on
Form 10-Q filed with the Securities and Exchange Commission on November 12, 2009:
Financial Statements
Condensed Consolidated Balance Sheets at September 30, 2009 (Unaudited) and December 31, 2008
Condensed Consolidated Statement of Operations (Unaudited) - Three and Nine Months Ended September 30, 2009 and 2008
Condensed Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 30, 2009 and 2008
Notes to Condensed Consolidated Financial Statements (Unaudited)
F-1
Report of Independent Registered Public Accounting Firm
Board of Directors
Cardo Medical, Inc.
Beverly Hills, CA
We have audited the accompanying consolidated balance sheets of Cardo Medical, Inc. (the "Company") as of
December 31, 2008 and 2007 and the related consolidated statements of operations, stockholders' equity, and cash flows for the year ended December
31, 2008 and April 6, 2007, inception, through December 31, 2007. These financial statements are the responsibility of the management of Cardo Medical,
Inc. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required at this time to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly,
we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position
of Cardo Medical, Inc. as of December 31, 2008 and 2007 and the results of their operations and their cash flows for the year ended December 31, 2008
and April 6, 2007, inception, through December 31, 2007 in conformity with United States generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going
concern. As discussed in Note 1 to the consolidated financial statements, the Company has losses from operations, negative cash flows from operations,
an accumulated stockholders' deficit and limited cash to fund future operations. These matters, among others, raise a substantial doubt about the
Company's ability to continue as a going concern. Management's plans concerning these matters are also described in Note 1. These financial statements
do not included any adjustments relating to the recoverability and classification of recorded assets, or amounts and classification of liabilities that might be
necessary in the event the Company cannot continue in existence.
/s/  Stonefield Josephson, Inc.
Stonefield Josephson, Inc.
Los Angeles, California
March 31, 2009
F-2
CARDO MEDICAL, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
December 31,
December 31,
2008
2007
ASSETS
Current assets:
Cash and cash equivalents
$
3,095
$
904
Accounts receivable
186
208
Inventories
942
437
Prepaid expenses and other current assets
107
107
Total current assets
4,330
1,656
Property and equipment, net
716
387
Goodwill
1,233
-
Other intangible assets, net
5,003
-
Other assets, net
192
112
Total assets
$
11,474
$
2,155
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses
$
777
$
233
Total liabilities
777
233
Non-controlling interest
-
634
Stockholders' equity
Common stock, $0.001 par value, 750,000,000 million shares
authorized, 203,360,271 and 133,440,954 issued and outstanding as
of December 31, 2008 and December 31, 2007, respectively
203
133
Additional paid-in capital
16,631
1,442
Note receivable from stockholder
(50)
-
Accumulated deficit
(6,087)
(287)
Total stockholders' equity
10,697
1,288
Total liabilities, non-controlling interest and stockholders' equity
$
11,474
$
2,155
See accompanying notes, which are an integral part of these consolidated financial statements
F-3
CARDO MEDICAL, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share amounts)
April 6, 2007,
Inception,
Year Ended
Through
December 31,
December 31,
2008
2007
Net sales
$
1,268
$
643
Cost of sales
197
69
Gross profit
1,071
574
Research and development expenses
1,332
215
Selling, general and administrative expenses
3,914
671
Impairment charges
1,457
-
Loss from operations
(5,632)
(312)
Interest income (expense), net
(20)
33
Loss before non-controlling interest
(5,652)
(279)
Non-controlling interest in loss (earnings) of subsidiaries
(148)
(8)
Loss before tax provision
(5,800)
(287)
Provision for income taxes
-
-
Net loss
$
(5,800)
$
(287)
Net loss available to common shareholders per share:
Basic and Diluted
$
(0.03)
(0.00)
Weighted average shares outstanding:
Basic and Diluted
168,762,052
133,440,954
See accompanying notes, which are an integral part of these consolidated financial statements
F-4
CARDO MEDICAL, Inc.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND
NON-CONTROLLING INTEREST
FOR THE PERIOD APRIL 6, 2007, INCEPTION, THROUGH
DECEMBER 31, 2007, AND FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008
(in thousands, except share amounts)
Common Stock
Additional
Paid-in
Note Receivable
Accumulated
Non-controlling
Total Stockholders'
Equity and
Shares
Amount
Capital
From Stockholder
Deficit
Interest
Non-controlling Interest
Balance at April 6, 2007, inception
-
$
-
$
-
$
-
$
-
$
-
$
-
Capital contribution
133,440,954
133
4,867
5,000
Contribution of net assets of Accin
325
626
951
Distribution to Accin Corporation shareholders
(3,750)
(3,750)
Net loss
(287)
8
(279)
Balance at December 31, 2007
133,440,954
133
1,442
-
(287)
634
1,922
Capital contribution
58,641,744
59
12,915
(900)
12,074
Reverse merger transaction
11,277,573
11
2,231
2,242
Collection of note receivable
850
850
Acquisition of non-controlling interest of Uni
(15)
(15)
Acquisition of non-controlling interest of Cervical
20
20
Acquisition of non-controlling interest of Accelerated
(787)
(787)
Stock option compensation
43
43
Net loss
(5,800)
148
(5,652)
Balance at December 31, 2008
203,360,271
$
203
$
16,631
$
(50)
$
(6,087)
$
-
$
10,697
See accompanying notes, which are an integral part of these consolidate financial statements
F-5
CARDO MEDICAL, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except share amounts)
April 6, 2007,
Fiscal Year
Inception,
Ended
Through
December 31,
December 31,
2008
2007
Operating activities:
Net loss
$
(5,800)
$
(287)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation
185
48
Amortization
376
13
Impairment charges
1,457
-
Non-controlling interest in earnings (loss) of subsidiaries
148
8
Stock option compensation
43
-
Acquisition of in-process research and development
938
-
Effect of changes in:
Accounts receivable
22
(180)
Inventories
(505)
(241)
Prepaid expenses and other current assets
9
(84)
Accounts payable and accrued expenses
431
142
Net cash used in operating activities
(2,696)
(581)
Investing activities:
Purchase of property and equipment
(515)
(251)
Cash acquired from Accin transaction
-
611
Proceeds from reverse merger transaction with Clicknsettle.com, Inc.
2,245
-
Payments made to acquire minority interest of subsidiaries
(3,487)
-
Increase in other assets
(79)
(125)
Net cash provided by (used in) investing activities
(1,836)
235
Financing activities:
Capital contribution
12,924
5,000
Distribution to Accin Corporation shareholders
(6,201)
(3,750)
Proceeds from notes payable
1,200
-
Payments of notes payable
(1,200)
-
Net cash provided by financing activities
6,723
1,250
Net increase (decrease) in cash
2,191
904
Cash, beginning of period
904
-
Cash, end of period
$
3,095
$
904
Supplemental disclosure of cash flow information:
Interest paid
$
48
$
-
Income taxes paid
$
-
$
-
Supplemental disclosure of non-cash investing and financing activities:
Capital contributions through note receivable from members
$
50
$
-
See accompanying notes, which are an integral part of these consolidated financial statements
F-6
CARDO MEDICAL, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share amounts)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
Cardo Medical, Inc. ("Cardo" or the "Company") is an early-stage orthopedic medical device company specializing in
designing, developing and marketing reconstructive joint devices and spinal surgical devices. Reconstructive joint devices are used to replace knee, hip
and other joints that have deteriorated through disease or injury. Spinal surgical devices involve products to stabilize the spine for fusion and reconstructive
procedures. Within these areas, Cardo intends to focus on the higher-growth sectors of the orthopedic industry, such as advanced minimally invasive
instrumentation and bone-conserving high-performance implants. Cardo is focused on developing surgical devices that will enable surgeons to bridge the
gap between soft tissue-driven sports medicine techniques and classical reconstructive surgical procedures.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America.
Principles of Consolidation
The consolidated financial statements include the accounts of Cardo, Accelerated Innovation, Inc.
("Accelerated"), Uni-Knee LLC ("Uni") and Cervical Xpand LLC ("Cervical"). All significant intercompany transactions
have been eliminated in consolidation.  The non-controlling and minority interests in these companies is represented by a single balance in the
consolidated balance sheets. As of December 31, 2007, the total non-controlling interest balance of $634 was comprised of $77 for minority interest in Uni,
($43) in Cervical and $600 in Accelerated.  As of December 31, 2008, the non-controlling interest balance amounted to $0, as the Company by then had
acquired the minority interests in Uni and Cervical and the non-controlling interest in Accelerated (see Note 8).
For the period from August 29, 2008 to December 31, 2008, the consolidated financial statements also include the accounts of
clickNsettle.com, Inc. ("CKST"), with whom the company completed a reverse takeover on that date (see Note 8).
Management's Plan
As reflected in the accompanying financial statements, the Company has losses from operations and negative cash flows from
operations.  These matters raise substantial doubt about the Company's ability to continue as a going
concern.  As more fully described in Note 9, the Company has been able to raise money in the form of a private placement of its securities.
Notwithstanding success in raising this type of financing, there continues to be substantial doubt about the Company's ability to continue as a going
concern.
In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown
in the accompanying balance sheet is dependent upon continued operations of the Company, which, in turn, is dependent upon the Company's ability to
continue to raise capital and ultimately generate positive cash flows from operations. The financial statements do not include any adjustments relating to
the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be
unable to continue its existence.
Management's plan regarding these matters includes raising additional funds in the form of a private placement of its
securities during the second quarter of 2009.
F-7
Use of Estimates
Financial statements prepared in accordance with accounting principles generally accepted in the United States require
management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.  Among other things, management makes estimates relating to allowances for
doubtful accounts, excess and obsolete inventory items, the estimated depreciable lives of property and equipment,
the impairment of goodwill and other intangible assets, share-based payment, deferred tax assets and the allocation of the
purchase price paid for the minority interests in Uni, Cervical and Accelerated.  Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash equivalents are comprised of certain highly liquid investments with maturities of three months or less when
purchased.  The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits.  At December 31, 2008 and
2007, the Company's deposits in excess of the federally insured limit were $2,700 and $600, respectively. The Company has not experienced any losses
related to this concentration of risk.
Accounts Receivable
The Company periodically assesses its accounts receivable for collectability on a specific identification basis.  If
collectability of an account becomes unlikely, an allowance is recorded for that doubtful account.  Once collection efforts have been exhausted, the account
receivable is written off against the allowance.  The Company does not require collateral for trade accounts receivable and has not experienced any
write-offs.  Management believes that all accounts receivable as of December 31, 2008 and 2007 are collectable.
Inventory
Inventory is stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis; and the
inventory is comprised of work in process and finished goods.  Work in process consists of fabrication costs paid relating to items currently in production.
Finished goods are completed knee, spine and hip replacement products ready for sales to customers. At each balance sheet date, the Company
evaluates its ending inventories for excess quantities and obsolescence.  This evaluation includes an analysis of sales levels by product type.  Among
other factors, the Company considers current product configurations, historical and forecasted demand, market conditions and product life cycles when
determining the net realizable value of the inventory.  Provisions are made to reduce excess or obsolete inventories to their estimated net realizable
values.  Once established, write-downs are considered permanent adjustments to the cost basis of the excess or obsolete inventory.  The Company did
not have any inventory considered by management to be excess or obsolete as of December 31, 2008 or in 2007.
Property and Equipment
Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful
lives, which range from three to five years. When items are retired or disposed of, income is charged or credited for the difference between the net book
value of the asset and the proceeds realized thereon. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and
betterments are capitalized.
Intangible and Long-Lived Assets
In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," the Company evaluates long-lived assets for impairment whenever events or changes in
circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the
projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective
carrying amount.  Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or
discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Company's management currently
believes there is no impairment of its long-lived assets. There can be no assurance, however, that market conditions will not change or demand for the
Company's products will continue. Either of these could result in future impairment of long-lived assets.
F-8
Other Assets
In September 2007, the Company entered into an agreement with a manufacturer to market
and distribute their uni-polar and mono-polar hip products.  As part of this agreement, the manufacturer granted non-exclusive licenses
to the Company to use certain information and improvements so that the Company may obtain regulatory approval for the products that
are the subject of the agreements, and in connection with the Company's commercialization of those products.  The total costs
capitalized as of December 31, 2008 and December 31, 2007 amounted to $255 and $125, respectively.  The amounts are being
amortized using the straight-line method over a period of five years, which represents the contractual life of the agreement.
Amortization of the license fees were $50 for the fiscal year ended December 31, 2008. In 2007 amortization commenced in September
2007 and amounted to $13 for the period of inception through December 31, 2007. Future amortization of the license fee will be $50 for
each of the years ended December 31, 2009 through 2011 and $42 for the year ended December 31, 2012.
Goodwill and Other Intangible Assets
In accordance with SFAS No. 142, "Goodwill and Intangible Assets," goodwill is assessed
for impairment annually at our year end or more frequently if circumstances indicate impairment. The Company recognized $1,457 of
impairment charges for the year ended December 31, 2008. There is no projected revenue for the internally-developed spine product
reporting unit. Accordingly, the Company performed a valuation of the goodwill related to that reporting unit. We used
the discounted cash flow method by which it was determined
that the goodwill no longer had any value. So at December 31, 2008 the entire goodwill related to Cervical has been written off.
Fair Value of Financial Instruments
For certain financial instruments, including accounts receivable, accounts payable and accrued expenses, the carrying
amounts approximate fair value due to their relatively short maturities. For the note payable, the carrying amount approximates its fair value due to its short
maturity and interest rate commensurate with the interest rate the Company could get in the open market.
Share-Based Payment
The fair value of each stock option is estimated on the date of grant using the Black-Scholes option pricing model.
Assumptions relative to volatility and anticipated forfeitures are determined at the time of grant with the following weighted average assumptions.
Fiscal Year
Ended
December 31,
2008
Expected life in years
7.5
Stock price volatility
46.7%
Risk free interest rate
3.5%
Expected dividends
None
Forfeiture rate
7.5%
The assumptions used in the Black-Scholes models referred to above are based upon the following data: (1) The expected
life of the option is estimated by considering the contractual term of the option, the vesting period of the option, the employees' expected exercise behavior
and the post-vesting employee turnover rate. (2) The expected stock price volatility of the underlying shares over the expected term of the option is
based upon
the Dow Jones index of small cap medical device companies as well as an index of similarly situated public companies.
(3) The risk free interest rate is based on published U.S. Treasury Department interest rates for the expected terms
of the underlying options. (4) Expected dividends are based on historical dividend data and expected future dividend activity. (5) The expected forfeiture
rate is based on historical forfeiture activity and assumptions regarding future forfeitures based on the composition of current grantees.
F-9
Revenue Recognition
The Company recognizes revenues when there is persuasive evidence of an arrangement, product delivery and
acceptance have occurred, the sales price is fixed and determinable, and collectability of the resulting receivable is reasonably assured.
The Company records revenues when title and the risk of loss pass to the customer.  Generally, these conditions occur on the date
that the surgery takes place at the hospital.
Shipping and Handling Costs
The Company delivers its products to the customers. The related costs are considered necessary to complete the revenue
cycle. Therefore, the Company records these costs as a component of the cost of goods sold.
Advertising Costs
The Company did not incur any advertising costs during the year ended December 31, 2008 or the period of April 6, 2007,
inception, through December 31, 2007.
Research and Development Costs
Research and development costs consist of expenditures for the research and development of new product lines and
technology. These costs are primarily payroll and payroll related expenses and various sample parts.  Research and development costs are expensed as
incurred.
In connection with the acquisition of the minority interest of Accelerated , the Company acquired in-process research and
development costs valued at $938, which are reflected as research and development expenses for the twelve months ended December 31, 2008.
Income Taxes
Prior to June 17, 2008, Cardo and its subsidiaries were flow-through entities from an income tax standpoint. Income
generated in these entities was not taxed at the entity level, but rather, the income passed directly through to the owners' individual income tax returns. As
a result, there is no provision for income tax for any period prior to this date.
On June 17, 2008, Cardo made an election with the Internal Revenue Service to be taxed as a corporation, meaning that any
taxable income generated by Cardo and subsidiaries will be taxed at the Cardo level.
As a result, on June 17, 2008, the Company adopted the guidelines specified in SFAS No. 109, "Accounting for Income
Taxes." In accordance with SFAS No. 109, deferred tax assets and liabilities are recognized to reflect the estimated future tax effects,
calculated at currently effective tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in
the financial statements. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred
tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates on the date of
enactment.
Also on June 17, 2008, the Company adopted Financial Accounting Standards Board ("FASB") Interpretation
No. 48, Accounting for Uncertainty in Income Taxes-An Interpretation of FASB Statement No. 109 ("FIN 48"). FIN 48
seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. FIN 48
prescribes a recognition threshold and measurement requirement for the financial statement recognition of a tax position that has been taken or is
expected to be taken on a tax return and also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods,
disclosure, and transition. Under FIN 48 the Company may only recognize or continue to recognize tax positions that meet a "more likely than
not" threshold.
On August 29, 2008, in connection with the reverse takeover of CKST, Cardo adopted CKST as the taxpaying entity.
F-10
Net Loss Per Share
The Company uses SFAS No. 128, "Earnings Per Share" for calculating the basic and diluted loss per
share. The basic loss per share is calculated by dividing the net loss attributable to common shareholders by the weighted average number of common
shares outstanding. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the potential shares had been issued and if the additional shares were dilutive. Common
equivalent shares are excluded from the computation of net loss per share if their effect is anti-dilutive.
For the year ended December 31, 2008, 2,398,400 potentially dilutive shares were excluded from the shares used to calculate
diluted earnings per share as their inclusion would reduce net loss per share. There were no potentially dilutive shares excluded for any
period in 2007.
Other Comprehensive Income
The Company has no other comprehensive income.
Concentrations and Other Risks
As of December 31, 2008, the Company had five customers that accounted for 23.1%, 16.4%, 15.4%, 12.1% and 10.5% of
its accounts receivable.  The Company had three customers that comprised 44.3%, 11.9% and 11.3% of the Company's net sales for the year ended
December 31, 2008.
As of December 31, 2007, the Company had five customers that accounted for 39.3%, 14.5%, 11.5%, 11.2% and 10.9% of its
accounts receivable.  The Company had three customers that comprised 43.3%, 26.8% and 14.3% of the Company's net sales for the period of April 6,
2007, inception, through December 31, 2007.
Recent Accounting Pronouncements
Accounting standards promulgated by the Financial Accounting Standards Board ("FASB") change periodically.
Changes in such standards may have an impact on the Company's future financial position.  The following are a summary of recent accounting
developments.
In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles.  SFAS No,
162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements for
nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. SFAS 162 will be
effective 60 days following the SEC's approval. The Company does not expect that this statement will result in a change in current practice.
In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an
amendment of FASB Statement No. 133.  SFAS No. 161 requires enhanced disclosures about a company's derivative and hedging activities. These
enhanced disclosures will discuss (a) how and why a company uses derivative instruments, (b) how derivative instruments and related hedged items are
accounted for under FASB Statement No. 133 and its related interpretations and (c) how derivative instruments and related hedged items affect a
company's financial position, results of operations and cash flows. SFAS No. 161 is effective for fiscal years beginning on or after November 15, 2008, with
earlier adoption allowed. The Company does not anticipate that the adoption of this accounting pronouncement will have a material effect on its financial
statements.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No.157 defines fair value, establishes
a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. The provisions of SFAS No. 157
are effective for the Company for fiscal years beginning January 29, 2007.   In February 2008, the FASB issued FASB Staff Position
No. 157-2, Effective Date of FASB Statement No. 157, which delays the effective date of SFAS No. 157 for nonfinancial assets and nonfinancial
liabilities to fiscal years beginning after November 15, 2008.
In December 18007, the FASB issued SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements — an
amendment of ARB No. 51. SFAS No. 160 establishes accounting and reporting standards for the non-controlling interest in a subsidiary and
for the deconsolidation of a subsidiary.  SFAS No. 160 clarifies that a non-
F-11
controlling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated financial statements and requires retroactive adoption of the presentation and
disclosure requirements for existing minority interests, of which the Company currently has none.  All other requirements of SFAS No. 160
shall be applied prospectively.  SFAS No. 160 is effective for fiscal years beginning after December 15, 2008. The Company anticipates that
SFAS No. 160 will not have any significant impact on the Company's financial statements.
In December 18007, the FASB issued SFAS No. 141(revised 2007), Business Combinations, which revises current purchase
accounting guidance in SFAS 141, Business Combinations. SFAS No. 141R requires most assets acquired and liabilities assumed in a
business combination to be measured at their fair values as of the date of acquisition. SFAS No. 141R also modifies the initial measurement and
subsequent remeasurement of contingent consideration and acquired contingencies, and requires that acquisition related costs be recognized as expense
as incurred rather than capitalized as part of the cost of the acquisition. SFAS No. 141R is effective for fiscal years beginning after
December 15, 2008 and is to be applied prospectively to business combinations occurring after adoption. The impact of SFAS No. 141R on
the Company's financial statements will depend on the nature and extent of the Company's future acquisition activities.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option of Financial Assets and Financial Liabilities.
SFAS No. 159 permits companies to choose to measure certain financial instruments and certain other items at fair value. The standard requires
that unrealized gains and losses on items for which the fair value option has been elected be reported in earnings. SFAS No. 159 is effective as of the
beginning of the entity's first fiscal year that begins after November 15, 2007.  The adoption of SFAS No. 159 did not have any significant impact on
the Company's financial statements.
In September 2006, the FASB issued SFAS No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement
Plans. FAS-158 requires employers to fully recognize the obligations associated with single-employer defined benefit pension, retiree healthcare and other
postretirement plans in their financial statements.  The adoption of SFAS No. 158 did not have any significant impact on the Company's financial
statements.
In April 2008, the Financial Accounting Standards Board, or FASB issued FASB Staff Position ("FSP") No. FAS 142-3
"Determination of the Useful Life of Intangible Assets." This FSP amends the factors that should be considered in developing renewal or
extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, "Goodwill and Other
Intangible Assets." The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under Statement 142
and the period of expected cash flows used to measure the fair value of the asset under FASB Statement No. 141 (revised 2007), "Business
Combinations" and other U.S. generally accepted accounting principles (GAAP). This FSP is effective for financial statements issued for fiscal years
beginning after December 15, 2008, and interim periods within those fiscal years.  Early adoption is prohibited. The Company will adopt this FSP beginning
January 1, 2009 and it is not believed that this will have an impact on the Company's financial statements.
In May 2008, the FASB issued FSP No. APB 14-1, "Accounting for Convertible Debt Instruments That May Be Settled in
Cash upon Conversion (Including Partial Cash Settlement)."  FSP APB 14-1 addresses instruments commonly referred to as Instrument C from
Emerging Issues Task Force No.  90-19, which requires the issuer to settle the principal amount in cash and the conversion spread in cash or net shares at
the issuer's option.  FSP APB 14-1 requires that issuers of these instruments account for their liability and equity components separately by bifurcating the
conversion option from the debt instrument, classifying the conversion option in equity, and then accreting the resulting discount on the debt as additional
interest expense over the expected life of the debt. FSP APB 14-1 is effective for fiscal years beginning after December 15, 2008 and interim periods within
those fiscal years, and requires retrospective application to all periods presented. Early application is not permitted. The Company will adopt this FSP
beginning January 1, 2009 and it is not believed that this will have an impact on the Company's financial statements.
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of
Certified Public Accountants, and the United States Securities and Exchange Commission did not or are not believed by management to have a material
impact on the Company's present or future financial statements.
F-12
2.  INVENTORY
The Company's inventory consisted of the following as of December 31, 2008 and 2007.
(In thousands)
December 31,
December 31,
2008
2007
Work in process
$
161
$
43
Finished goods
781
394
$
942
$
437
3.  PROPERTY AND EQUIPMENT
Property and equipment consisted of the following as of December 31, 2008 and 2007.
(In thousands)
December 31,
December 31,
2008
2007
Instrumentation
$
832
$
362
Computer equipment
115
71
Furniture and fixtures
2
2
Sub Total
949
435
Less: accumulated depreciation
(233)
(48)
Total
$
716
$
387
Depreciation expense for the year ended December 31, 2008 amounted to $185.  Depreciation expense for the period from April 6,
2007, inception, through December 31, 2007 amounted to $48. Depreciation expense is included in selling, general and administrative expenses in the
accompanying consolidated statements of operations.
4.  ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consisted of the following as of December 31, 2008 and 2007.
(In thousands)
December 31,
December 31,
2008
2007
Accounts payable
$
348
$
233
Accrued legal expenses
136
-
Accrued accounting fees
75
-
Accrued payroll
25
-
Accrued commissions
34
-
Accrued vacation
42
-
Other accrued expenses
117
-
$
777
$
233
F-13
5.  INTANGIBLE ASSETS
Intangible assets consisted of the following as of December 31, 2008.
(In Thousands)
Accumulated
Net Book
Cost
Amortization
Value
Royalty Agreement
$            2,034
$                     102
$            1,933
Customer Contracts
294
73
220
Complete Technology
3,000
150
2,850
Total
$            5,328
$                     325
$            5,003
They royalty agreement and complete technology are being amortized on a straight line basis over a ten year life. The customer
contracts are being amortized over a two year life. The useful lives of these assets are estimated based on their planned use and revenue forecasts for the
products related to each intangible asset.
Amortization expense related to the intangible assets was $325 in 2008. Future amortization expense for these assets is as
follows.
(In thousands)
Year Ended
December 31,
2009
$                         650
2010
576
2011
503
2012
503
2013
503
Thereafter
2,268
$                      5,003
6.  NOTES PAYABLE
On February 6, 2008, the Company borrowed $1,200 from the trustee of a member (that is a trust) to make a down payment
on the purchase price for the minority interests in Uni and Cervical.  The note accrued interest at 10% per annum and was due in full, along with any
accrued interest, on July 6, 2008.  The note was collateralized by all assets of the Company and is personally guaranteed by the majority member of the
Company.
In July 2008, the entire principal balance of $1,200 was repaid, along with all accrued interest amounting to $48.
7.  ACCIN TRANSACTION
On April 6, 2007, Cardo was organized by a group of investors who made an initial capital contribution amounting to an
aggregate of $5,000.  On May 21, 2007, (1) Cardo contributed $3,750 to Accelerated and (2) Accin, a related party company through a common owner,
contributed all of its net business assets, with a net book value of $867, to Accelerated. In exchange for this contribution, Cardo received 37.5% of the
ownership interests in Accelerated and Accin received the remaining 62.5% of the ownership interests.
Concurrent with the above transaction, on May 21, 2007, the $3,750 contributed by Cardo was distributed by Accelerated to Accin.
In this transaction, Cardo received a one-year option to purchase the remaining 62.5% of the ownership interests in Accelerated held by Accin for
$6,250,000 (see Note 8).
F-14
Upon analysis of the Accin contribution, and by applying the precepts found in Emerging Issues Task Force ("EITF")
Issue No. 98-3, "Determining Whether a Nonmonetary Transaction Involves Receipt of Productive Assets or of a Business," it was determined
that the net assets constituted a business.  This was based on the inputs, outputs, customer base and processes of the operation.
Therefore, it was determined that the transaction was a business combination subject to the guidance of SFAS No. 141,
"Business Combinations." Under that guidance, since Cardo obtained control of the operations despite not having majority ownership, Cardo
was the acquirer for accounting purposes. Accordingly, the transaction was recorded as a purchase, and the accounts of Accelerated were consolidated
with those of Cardo.
However, since the assets contributed by Accin were in exchange for ownership interests in Accelerated, in accordance with Staff
Accounting Bulletin Topic 5, the assets were recorded on the books of Accelerated at Accin's historical cost basis.
Following is an unaudited pro forma presentation of Cardo and Accin assuming they were combined at the beginning of 2007.
Cardo
April 6, 2007,
Pro Forma
Inception,
Accin
Combined
Through
Five Months
Year Ended
December 31,
Ended
December 31,
2007
May 31, 2007
2007
(In thousands)
(unaudited)
Net sales
$
643
$
157
$
800
Cost of sales
69
25
94
Gross profit
574
132
706
Research and development expenses
215
41
256
Selling, general and administrative expenses
671
250
921
Impairment expenses
-
-
-
Loss from operations
(312)
(159)
(471)
Interest income, net
33
20
53
Loss before non-controlling interest
(279)
(139)
(418)
Non-controlling interest in loss (earnings) of subsidiaries
(8)
128
120
Net loss
$
(287)
$
(11)
$
(298)
8.  ACQUISITION OF NON-CONTROLLING INTERESTS
On February 7, 2008, the Company entered into Membership Interest Purchase Agreements (the "Agreements")
pursuant to which it agreed to purchase the minority interests in Uni and Cervical subject to certain conditions prior to closing. Together with the execution
of the Agreements, Cardo made deposits to the minority interest holders of Uni and Cervical in the aggregate amount of $1,160.  On June 23, 2008, the
Company paid an additional $2,326 to the minority interest holders of Uni and Cervical to close the acquisition.  As a result, the Company became the
100% owner of all interests in Uni and Cervical.
On June 19, 2008, the Company exercised its option to acquire the non-controlling interest in Accelerated for $6,250.  Of this
amount, $6,150 was paid to Accin as of June 30, 2008, and $100 was held for payment of acquisition costs, with any amounts left over due to the minority
interest holders.
F-15
The Company's acquisition of the Uni, Cervical and Accelerated minority interest have been accounted for using the purchase
accounting method.  The financial statements reflect the allocation of the purchase price to the net assets acquired based on their estimated fair values as
of the acquisition date.  The Company's allocation of purchase price is as follows.
(In thousands)
Uni
Cervical
Accelerated
Total
Estimated fair value of tangible net assets acquired
$
15
$
(19)
$
786
$
782
In-process research and development
-
-
938
938
Other intangible assets
2,034
-
3,293
5,327
Goodwill
-
1,457
1,233
2,690
Total purchase price
$
2,049
$
1,438
$
6,250
$
9,737
The amounts allocated to in-process research and development for Accelerated have been recorded as research and development
expenses in the consolidated statement of operations during the year ended December 31, 2008.  In addition, the goodwill associated with the purchase of
Cervical was deemed to be impaired and consequently written off during the year ended December 31, 2008.
9.  SHAREHOLDER EQUITY
Our authorized capital consists of 750,000,000 shares of common stock and
50,000,000 shares of preferred stock.  Our preferred stock may be designated into series pursuant to
authority granted by our Certificate of Incorporation, and on approval from our Board of Directors.  As of
December 31, 2008 we did not have any preferred stock issued.
On June 18, 2008, Cardo entered into a Unit Purchase Agreement with certain
investors, pursuant to which the investors invested $9,500 in Cardo in exchange for units of membership
interests in Cardo.  After the execution of the Unit Purchase Agreement, Cardo completed a private
placement of units of membership interests in Cardo to certain other investors, resulting in an additional
investment of $3,475.  The total capital raised from these sources was $12,974.
10.  REVERSE MERGER
On August 29, 2008 Cardo completed a reverse takeover of CKST, a publicly traded company. Under the terms of the Merger
Agreement, at the closing of the Merger, each Cardo unit issued and outstanding was converted into and exchanged for the right to receive 667,204.70995
shares of common stock of CKST. All options to buy units of Cardo were also converted into and exchanged for options to purchase shares of CKST at the
same exchange rate as the shares.
Accordingly, all current and historic share and option quantities in the accompanying financial statements and notes thereto have
been presented at the new higher share count, after conversion.
As a result of the Merger, CKST's shareholders and option holders own approximately 5.5% of the combined company on a fully
diluted basis (or 11,298,979 shares of common stock outstanding and options); the members of Cardo, excluding the new investors who
participated in the private placement in June 2008 (see Note 9), own approximately 64.5% of the combined company on a fully diluted basis (or
133,440,942 shares of common stock), the new investors own approximately 28.5% of the combined company on a fully diluted basis (or 58,641,701
shares of common stock), and option holders of Cardo have rights to own approximately 1.2% of the combined company on a fully diluted basis (or
2,398,400 shares of common stock underlying those options).
F-16
11. INCOME TAXES
The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for
income taxes were as follows:
Year ended
December 31,
2008
Statutory federal income tax rate
34%
State taxes, net of federal benefit
6%
Other
-1%
Change in valuation allowance
-39%
0%
Significant components of deferred tax assets and (liabilities) are as follows:
Net operating loss carryforwards
$          706
State Taxes
(167)
Goodwill
624
Acquired in-process research and development
402
Depreciation and amortization
(102)
Non-qualified stock options
21
Other
24
Total, net
1,508
Valuation allowance
(1,508)
Deferred tax assets, net
$        -
The Company files income tax returns in the U.S. Federal and California and New Jersey State jurisdictions. The Company is
subject to U.S. Federal, State and local income tax examinations by tax authorities since becoming a taxpayer in 2008. To date, the Company has not filed
any tax returns as a non-flow through taxpaying entity.
At December 31, 2008, the Company has Federal and State net operating loss carryforwards available to offset future taxable
income of approximately $1,700 and $1,700 respectively.  These carryforwards will begin to expire in the years ending December 31, 2023 and
December 31, 2018, respectively.  These net operating losses may be subject to various limitations on utilization based on ownership changes in the prior
years under Internal Revenue Code Section 382.
We periodically evaluate the likelihood of the realization of deferred tax assets, and adjust the carrying amount of the deferred tax
assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. We consider many
factors when assessing the likelihood of future realization of our deferred tax assets, including our recent cumulative earnings experience by taxing
jurisdiction, expectations of future taxable income or loss, the carryforward periods available to us for tax reporting purposes, and other relevant
factors.
At December 31, 2008, based on the weight of available evidence, including cumulative losses in recent years and expectations of
future taxable income, we determined that it was not more likely than not that our deferred tax assets would be realized and have a $1,508
valuation allowance associated with our net deferred tax assets.
F-17
As a result of the implementation of FIN 48, the Company performed an analysis of its previous years' tax returns and its current
year tax provision and determined that there were no positions taken that it considered uncertain. Therefore, there were no unrecognized tax benefits as of
December 31, 2008.
Future changes in any unrecognized tax benefit are not expected to have an impact on the effective tax rate due to the existence of
the valuation allowance.  The Company estimates that the unrecognized tax benefit will not change within the next twelve months.  The Company will
continue to classify income tax penalties and interest, if any, as part of general and administrative expense in its Statements of Operations.  There is no
accrued interest or penalties as of December 31, 2008.
The following table summarizes the open tax years for each major jurisdiction:
Jurisdictions
Open Years
Federal
2006-2008
States
2006-2008
As the Company has significant net operating loss carryforwards, even if certain of the Company's tax positions were disallowed, it
is not foreseen that the Company would have to pay any taxes in the near future. Consequently, the Company does not calculate the impact of interest or
penalties on amounts that might be disallowed.
12.  SHARE BASED PAYMENT
On August 29, 2008, the Company issued options to certain employees and Board members to purchase membership units in
Cardo. On the same day, Cardo completed the reverse merger transaction described above (see Note 8), in which the options converted to shares in
clickNsettle.com, Inc.
In accordance with SFAS No. 123(R), the Company has conducted an analysis of the fair value of the options immediately prior to
the reverse merger, and immediately after the reverse merger and has concluded that there is no change in value as a result of the reverse merger.
Therefore, no additional compensation cost will be recognized related to the reverse merger.
Furthermore, as described in Note 8 above, all share quantities in these financial statements have been cast to reflect the impact of
the reverse merger. Therefore, the following disclosure uses those figures after the reverse merger.
The options granted give the grantees the right to purchase up to 2,398,400 shares of its common stock at an exercise price of
$0.23 per share.  The options vest 20% each year over a five year period and expire after ten years.  The weighted average grant date fair value of options
granted was $0.13 per option, for a total fair value of $300, which will be reflected as an operating expense over the vesting period of the options.
The total expense recognized for the year ended December 31, 2008 in the accompanying consolidated statements of operations
amounted to $43.
F-18
A summary of option activity as of December 31, 2008, and changes during the year then ended is presented below.
Weighted-
Average
Weighted-
Remaining
Average
Contractual
Aggregate
Exercise
Life
Intrinsic
Options
Price
(Years)
Value
Outstanding at December 31, 2007
-
$
-
-
$
-
Granted
2,398,400
0.23
9.67
2,926
Exercised
-
-
Forfeited
-
-
Outstanding at December 31, 2008
2,398,400
0.23
9.67
2,926
Vested and expected to vest
at December 31, 2008
2,218,520
0.23
9.67
2,707
Exercisable at December 31, 2008
-
0.23
9.67
-
The aggregate intrinsic value in the table above is before applicable income taxes and is calculated based on the difference
between the exercise price of the options and the quoted price of the common stock as of the reporting date.
A summary of the status of the Company's unvested options as of December 31, 2008 and changes during the fiscal year then
ended is presented below.
Weighted
Average
Grant Date
Shares
Fair value
Unvested at December 31, 2007
-
-
Granted
2,398,400
0.13
Vested
-
-
Forfeited
-
-
Unvested at December 31, 2008
2,398,400
0.13
As of December 31, 2008, total unrecognized stock-based compensation expense related to unvested stock options was
approximately $257, which is expected to be recognized over a weighted average period of approximately 5 years.
F-19
The following table summarizes information about stock options and warrants outstanding and exercisable at December 31,
2008:
Options Outstanding
Options Exercisable
Weighted
Weighted
Weighted
Average
Average
Average
Exercise
Number
Remaining
Exercise
Number
Exercise
Price
of Shares
Life (Years)
Price
of Shares
Price
$              0.23
2,398,400
9.67
$           0.23
-
$                     -
13.  RELATED PARTY TRANSACTIONS
For the period of April 6, 2007, inception, through December 31, 2007, the Company paid $50 to a shareholder for consulting
services provided.  The Company paid $0 to the shareholder for consulting services for the year ended December 31, 2008.
On May 21, 2007, the Company entered into a transaction in which Cardo received a 37.5% ownership interest in Accelerated and
Accin, a related party company through a common owner, received a 62.5% ownership interest in Accelerated and a $3,750 cash distribution.
14.  COMMITMENTS AND CONTINGENCIES
Employee Agreements
On February 25, 2008, the Company presented an offer letter to a key employee pursuant to which the employee was to
be granted a 1.25% share of the Company's outstanding membership interests to be issued upon a proposed private placement of securities. The
membership interest was to vest over a five year period commencing one year from the issuance date, with acceleration upon a change in control of the
Company.  The offer letter was not signed by the Company, but was returned to the Company executed by the employee.
The private placement was consummated on June 18, 2008.  As a result, the Company had a potential commitment to issue the
employee member interests with an estimated fair value of $562,500.
On September 5, 2008, the Company and the employee agreed that the February 25, 2008 offer letter was void and of no effect,
and entered into a new letter agreement with the employee granting him options to purchase membership interests in the Company.
On May 21, 2007, in connection with the contribution of all the business assets of Accin to Accelerated, the Company took
assignment of an employment agreement with a key employee, who is also a related party. The term of the agreement was from June 1, 2005 through May
30, 2008, with automatic renewal for successive one-year periods, and had a specified salary of $52,000 per year and a severance clause. On June 6,
2008, the employment agreement was amended to remove certain references to the predecessor company and its shareholder agreement. On September
8, 2008, the entire agreement was terminated, effective June 23, 2008.
Put Option Derivative
On June 18, 2008, the Company entered into a Unit Purchase Agreement and a Merger Agreement. Those agreements
specified that if Cardo did not consummate this merger prior to August 31, 2008, the investors who were party to the Unit Purchase Agreement had the
right ("Put Option") to cause Cardo to repurchase their units for the amount of their original investment, plus the amount of any liability for taxes the
investors (or their equity holders or other beneficial owners) may have incurred based upon Cardo's income.
That Put Option was initially valued at $284, and it was recorded as a liability on the books of Cardo.
F-20
On August 29, 2008, Cardo completed the merger pursuant to the terms of the Merger Agreement. As a result, the Put Option was
cancelled and the amount originally recorded as a liability was reclassified to equity.
Operating Leases
The Company leases its office facilities in Beverly Hills and Van Nuys, California (near Los Angeles) and Clifton, New
Jersey (near New York City) under month to month operating leases.  Total rent expense for the period from April 6, 2007, inception, through December
31, 2007, and the year ended December 31, 2008 amounted to $23 and $74, respectively.
15.  SEGMENT INFORMATION
Our businesses are currently organized into the following two reportable segments;
reconstructive products (the "Reconstructive Division") and spine products (the "Spine Division").  The
Reconstructive Division segment is comprised of activity relating to the Company's unicompartmental knee, patello-femoral products,
the total knee and hip products.  The Spine Division segment is comprised of the spinal lumbar fusion system and cervical plate and
screw systems.
The division into these reportable segments is based on the nature of the products offered.  Management
evaluates performance and allocates resources based on several factors, of which the primary financial measure is segment operating
results.  Due to the distinct nature of the products in the Company's Reconstructive Division, and the fact that it has a more developed
market for its products, it is considered by management as a separate segment.  The Company's Spine Division is still in the process of
developing the market and obtaining instrumentation necessary to sell the products in greater quantities.  As a result of the unique
characteristics of this product line, the Spine Division is considered by management as a separate segment.  The accounting policies of
the reportable segments are the same as those described in Note 1.
As of December 31, 2008, the Company's Reconstructive Division includes $1,233 of goodwill and $5,003 in other intangible
assets relating to the Company's unicompartmental knee product. These amounts are expected to be deductible for income tax purposes.
The following table sets forth financial information by reportable segment (in thousands).
Reconstructive
Spine
(In thousands)
Division
Division
Corporate
Total
Year Ended December 31, 2008
Net sales
$
1,188
$
80
$
-
$
1,268
Total cost of sales and operating expenses
692
26
6,330
7,048
Interest expense, net
-
-
(20)
(20)
Net income (loss)
$
496
$
54
$
(6,350)
$
(5,800)
Depreciation and amortization
$
536
$
4
$
21
$
561
Property and equipment acquisitions
$
468
$
2
$
45
$
515
Goodwill
$
1,233
$
-
$
-
$
1,233
Total assets
$
8,117
$
65
$
3,292
$
11,474
Year Ended December 31, 2007
Net sales
$
643
$
-
$
-
$
643
Total cost of sales and operating expenses
123
-
840
963
Interest income, net
-
-
33
33
Net income (loss)
$
520
$
-
$
(807)
$
(287)
Depreciation and amortization
$
54
$
-
$
7
$
61
Property and equipment acquisitions
$
168
$
11
$
72
$
251
Total assets
$
1,066
$
11
$
1,078
$
2,155
F-21
All of the Company's net sales were attributable to activity in the United States.  There were no long-lived assets held in foreign
countries.
16. SUBSEQUENT EVENTS
On March 10, 2009, Cardo Medical Inc, entered into a sublease for 2,993 square feet of office space
in Beverly Hills, CA. Monthly rent starts on April 1, 2009.
Future minimum payments for our operating lease are as follows:
(In thousands)
Year Ended
December 31,
2009
$                108
2010
84
$                192
F-22
CARDO MEDICAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
September 30,
December 31,
2009
2008
(Unaudited)
Assets
Current assets
Cash
$
1,607
$
3,095
Accounts receivable
251
186
Inventories
1,993
942
Prepaid expenses and other current assets
71
107
Total current assets
3,922
4,330
Property and equipment, net
1,226
716
Goodwill
1,233
1,233
Other intangible assets, net
4,515
5,003
Deposits and other assets, net
343
192
Total assets
$
11,239
$
11,474
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses
$
1,028
$
777
Stockholders' equity
Common stock, $0.001 par value, 750,000,000 million shares authorized,
211,121,018 and 203,360,271 issued and outstanding as of
September 30, 2009 (unaudited) and December 31, 2008, respectively
211
203
Additional paid-in capital
19,410
16,631
Common stock issuable
495
-
Note receivable from stockholder
(50)
(50)
Accumulated deficit
(9,855)
(6,087)
Total stockholders' equity
10,211
10,697
Total liabilities and stockholders' equity
$
11,239
$
11,474
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-23
CARDO MEDICAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share amounts)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2009
2008
2009
2008
(Restated)
(Restated)
Net sales
$
436
$
411
$
1,314
$
932
Cost of sales
84
66
254
139
Gross profit
352
345
1,060
793
Research and development expenses
123
142
329
1,288
Selling, general and administrative expenses
1,440
1,089
4,521
2,488
Loss from operations
(1,211)
(886)
(3,790)
(2,983)
Interest income (expense), net
6
5
22
(37)
Loss before income tax provision
(1,205)
(881)
(3,768)
(3,020)
Provision for income taxes
-
-
-
-
Net loss
(1,205)
(881)
(3,768)
(3,020)
Less: Net income attributable to non-controlling interest
-
-
-
(148)
Net loss attibutable to Cardo Medical, Inc.
$
(1,205)
$
(881)
$
(3,768)
$
(3,168)
Net loss available to common stockholders per share:
Basic and diluted
$
(0.01)
$
(0.00)
$
(0.02)
$
(0.02)
Weighted average shares outstanding:
Basic and diluted
206,157,409
196,005,332
204,302,897
157,102,579
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-24
CARDO MEDICAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
2009
2008
(Restated)
Cash flows from operating activities
Net loss
$
(3,768)
$
(3,168)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
878
334
In-process research and development expenses
-
938
Stock option compensation
89
11
Net income attributable to non-controlling interest
-
148
Changes in operating assets and liabilities:
-
Accounts receivable
(65)
(81)
Inventories
(1,051)
(419)
Prepaid expenses and other current assets
36
39
Accounts payable and accrued expenses
251
585
Net cash used in operating activities
(3,630)
(1,613)
Cash flows from investing activities
Purchases of property and equipment
(862)
(99)
Deposits for Vertebron, Inc. transaction
(130)
-
Payments made to acquire minority interest of subsidiaries
-
(3,487)
Proceeds from reverse merger transaction with Clicknsettle.com, Inc.
-
2,245
Increase in deposits and other assets
(59)
(143)
Net cash used in investing activities
(1,051)
(1,484)
Cash flows from financing activities
Capital contributions
-
12,925
Proceeds from private placements, net of issuance costs
3,193
-
Proceeds from notes payable
-
1,200
Repayment of notes payable
-
(1,200)
Distributions to Accin shareholders
-
(6,150)
Net cash provided by financing activities
3,193
6,775
Net change in cash
(1,488)
3,678
Cash, beginning of period
3,095
904
Cash, end of period
$
1,607
$
4,582
Supplemental disclosure of cash flow information:
Interest paid
$
-
$
48
Income taxes paid
$
-
$
-
Supplemental disclosure of non-cash investing and financing activities:
Capital contributions through note receivable from members
$
-
$
50
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-25
CARDO MEDICAL, INC.
Notes to Condensed Consolidated Financial Statements
September 30, 2009
(Unaudited)
NOTE 1 —
DESCRIPTION OF BUSINESS
Cardo Medical, Inc. ("Cardo" or the "Company") is an early-stage
orthopedic medical device company specializing in designing, developing and marketing reconstructive joint devices and
spinal surgical devices. Reconstructive joint devices are used to replace knee, hip and other joints that have deteriorated
through disease or injury. Spinal surgical devices involve products to stabilize the spine for fusion and reconstructive
procedures. Within these areas, Cardo intends to focus on the higher-growth sectors of the orthopedic industry, such as
advanced minimally invasive instrumentation and bone-conserving high-performance implants. Cardo is focused on
developing surgical devices that will enable surgeons to bridge the gap between soft tissue-driven sports medicine
techniques and classical reconstructive surgical procedures.
NOTE 2 —
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying condensed consolidated balance sheet as of December 31, 2008, which has
been derived from Cardo's audited financial statements as of that date, and the unaudited condensed consolidated
financial information of Cardo as of September 30, 2009 and for the three and nine months ended September 30, 2009
and 2008, has been prepared in accordance with accounting principles generally accepted in the United States of
America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article
8-03 of Regulation S-X. In the opinion of management, such financial information includes all adjustments (consisting only
of normal recurring adjustments) considered necessary for a fair presentation of the Company's financial position at
such date and the operating results and cash flows for such periods. Operating results for the interim periods ended
September 30, 2009 are not necessarily indicative of the results that may be expected for the entire year.
Certain information and footnote disclosure normally included in financial statements in
accordance with generally accepted accounting principles have been omitted pursuant to the rules of the United States
Securities and Exchange Commission ("SEC"). These unaudited financial statements should be read in
conjunction with our audited financial statements and accompanying notes included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2008 filed on March 31, 2009.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of Cardo, Accelerated
Innovation, Inc. ("Accelerated"), Uni-Knee LLC ("Uni") and Cervical Xpand LLC
("Cervical"). All significant intercompany transactions have been eliminated in consolidation.  The
non-controlling and minority interests in these companies is represented by a single balance in the condensed consolidated
balance sheets.
Liquidity and Capital Resources
At September 30, 2009, we had $1.6 million in cash; however, subsequent to the balance sheet
date, the Company used $1.17 million in order to complete the Vertebron, Inc, transaction (refer to Note 7) and raised
net proceeds of approximately $3.2 million through a private placement (refer to Note 7). With this subsequent net cash
infusion, the available funds are still not projected to meet all of the Company's working capital needs for the next twelve
months. The fact that the Company will sustain losses through the remainder of 2009 and still requires outside sources
of additional capital to supplement operations continues to create an uncertainty about the Company's ability to
continue as a going concern.
Management intends to use borrowings and securities sales to mitigate the effects of our use of
that cash.  However, Cardo cannot assure you that debt or equity financing, if and when required, will be available.
Cardo's ability to continue as a going concern is dependent upon receiving additional funds either through the issuance of debt or
F-26
through common and/or preferred stock and the success of management's plan to expand sales. Although
Cardo may obtain external financing through the sales of its own securities, there can be no assurance that such
financing will be available, or if available, that any such financing would be on terms acceptable to the Company. If
Cardo is unable to fund its cash flow needs, it may have to reduce or stop planned growth or scale back operations and
reduce staff. The condensed consolidated financial statements do not include any adjustments that may result from the
outcome of this uncertainty.
Net Loss Per Share
The basic loss per share is calculated by dividing the net loss attributable to common
shareholders by the weighted average number of common shares outstanding. Diluted loss per share is computed
similar to basic loss per share except that the denominator is increased to include the number of additional common
shares that would have been outstanding if the potential shares had been issued and if the additional shares were
dilutive. Common equivalent shares are excluded from the computation of net loss per share if their effect is
anti-dilutive.
For the three and nine months ended September 30, 2009, 2,358,400 potentially dilutive shares
were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per
share, respectively.
Concentrations
The Company had three customers that accounted for 24%, 21% and 11% of accounts
receivable as of September 30, 2009. At December 31, 2008, the Company had five customers that accounted for 23%,
16%, 15%, 12% and 11% of its accounts receivable. The Company had three customers that accounted for 29%, 25%
and 15% of sales during the nine months ended September 30, 2009. Three customers accounted for 24%, 21% and
15% of sales during the three months ended September 30, 2009. During the nine months ended September 30, 2008,
four customers accounted for 49%, 11%, 11% and 10% of sales. Four customers accounted for 40%, 19%, 12% and
11% of sales during the three months ended September 30, 2008.
Reclassifications
Certain amounts from prior periods have been reclassified to conform to the current period
presentation.
Recent Accounting Pronouncements
In July 2009, the FASB issued ASC 105-10 (Prior authoritative literature: SFAS No. 168,
The
FASB Accounting Standards Codification
TM
and the Hierarchy of Generally Accepted Accounting
Principles
), which will become the single source of authoritative GAAP recognized by the FASB.  ASC
105-10 does not change current U.S. GAAP, but on the effective date, the FASB Accounting Standards Codification
("ASC")
TM
will supersede all then existing non-SEC accounting and reporting
standards.  The ASC is effective for interim and annual reporting periods ending after September 15,
2009.  Cardo adopted ASC 105-10 during the quarter ended September 30, 2009 and revised its
referencing of GAAP accounting standards in these financial statements to reflect the new standards.
In May 2009, the FASB issued ASC 855-10 (Prior authoritative literature: SFAS No. 165,
Subsequent Events
) which provides guidance on management's assessment of subsequent
events.  It is not expected to significantly change practice because its guidance is similar to that in
American Institute of Certified Public Accountants Professional Standards U.S. Auditing Standards Section 560,
Subsequent Events
, with some modifications.  The Company adopted ASC 855-10 during the
quarter ended June 30, 2009. The adoption of ASC 855-10 did not have a material impact on the Company's results of
operations, financial position or cash flows.
In April 2009, FASB issued ASC 820-10 (Prior authoritative literature: FSP No. FAS 157-4,
Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That Are Not Orderly
). It does not change the definition of fair value as previously
detailed, but provides additional guidance for estimating fair value when the volume and level of activity for the asset or
liability have significantly decreased. Cardo adopted ASC 820-10 during the quarter ended June 30, 2009. The adoption
of ASC 820-10 did not have a material impact on the Company's results of operations, financial position or cash flows.
F-27
In April 2009, the FASB issued ASC 320-10 (Prior authoritative literature: FSP No. FAS 115-2
and FAS 124-2,
Recognition and Presentation of Other-Than-Temporary Impairments
). ASC 320-10 amends the
other-than-temporary impairment guidance in U.S. GAAP for debt securities and provides additional disclosure
requirements for other-than-temporary impairments for debt and equity securities. ASC 320-10 addresses the
determination as to when an investment is considered impaired, whether that impairment is other than temporary, and
the measurement of an impairment loss. Cardo adopted ASC 320-10 during the quarter ended June 30, 2009. The
adoption of ASC 320-10 did not have a material impact on the Company's results of operations, financial position or
cash flows.
In April 2009, the FASB issued ASC 825-10 (Prior authoritative literature: FSP No. FAS 107-1
and APB 28-1,
Interim Disclosures about Fair Value of Financial Instruments
). FASB ASC 825-10 requires that
disclosures about the fair value of a company's financial instruments be made whenever summarized financial
information for interim reporting periods is made. Cardo adopted ASC 825-10 during the quarter ended September 30,
2009. The adoption of ASC 825-10 did not have a material impact on the Company's results of operations, financial
position or cash flows.
In June 2009, the FASB issued the following new accounting standards, which remain
authoritative until such time that each is integrated into the Codification:
SFAS No. 166,
Accounting for Transfers of Financial Assets - an
amendment of FASB Statement No. 140
SFAS No. 167,
Amendments to FASB Interpretation No. 46(R).
SFAS
No. 167 amends FASB Interpretation No. ("FIN") 46,
Consolidation of Variable Interest Entities
(revised December 18003) - an interpretation of ARB No. 51
SFAS No. 166 seeks to improve the relevance and comparability of the information that a
reporting entity provides in its financial statements about transfers of financial assets; the effects of the transfer on its
financial position, financial performance, and cash flows; and a transferor's continuing involvement, if any, in transferred
financial assets. SFAS No. 166 eliminates the concept of a qualifying special-purpose entity, creates more
stringent conditions for reporting a transfer of a portion of a financial asset as a sale, clarifies other sale-accounting
criteria, and changes the initial measurement of a transferor's interest in transferred financial assets. SFAS
No. 166 is effective for interim and annual reporting periods beginning after November 15, 2009. The
Company has not completed its evaluation, but does not expect the adoption of SFAS No. 166 to have a material
impact on its consolidated financial statements.
SFAS No. 167 requires an enterprise to determine whether its variable interest or interests give it
a controlling financial interest in a variable interest entity. The primary beneficiary of a variable interest entity is the
enterprise that has both (1) the power to direct the activities of a variable interest entity that most significantly
impact the entity's economic performance, and (2) the obligation to absorb losses of the entity that could
potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially
be significant to the variable interest entity. SFAS No. 167 also amends FIN 46(R) to require ongoing
reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. SFAS No. 167 is
effective for interim and annual reporting periods beginning after November 15, 2009. The Company has not
completed its evaluation, but does not expect the adoption of SFAS No. 167 to have a material impact on its
consolidated financial statements.
NOTE 3 — INVENTORY
Inventories consisted of the following at:
(In thousands)
September 30,
December 31,
2009
2008
(Unaudited)
Work in process
$
649
$
161
Finished goods
1,344
781
$
1,993
$
942
F-28
NOTE 4 — SHARE BASED PAYMENT
On August 29, 2008, the Company issued options to certain employees and Board members to
purchase membership units in Cardo. The options give the grantees the right to purchase up to 2,398,400 shares of the
Company's common stock at an exercise price of $0.23 per share.  The options vest 20% each year over a five-year
period and expire after ten years.  The weighted average grant date fair value of options granted was $0.13 per option,
for a total fair value of $300,000, which will be reflected as an operating expense over the vesting period of the options.
Stock option compensation recognized for the three and nine months ended September 30, 2009 in the accompanying
condensed consolidated statements of operations amounted to $27,105 and $89,562, respectively. Stock option
compensation was $11,103 for the three and nine months ended September 30, 2008.
The fair value of each option award is estimated on the date of grant
using the Black-Scholes option valuation model that uses the assumptions noted in the following table. Because the
Black-Scholes option valuation model incorporate ranges of assumptions for inputs, those ranges are disclosed. To
estimate volatility of the options over their expected terms, the Company measures the historical volatility of the
components of the small cap sector of the Dow Jones medical equipment index for a period equal to the expected life of
the Cardo options. It also measures the volatility of other public companies with similar size and industry characteristics
to Cardo for the same period. These measurements are averaged and the result is used as expected volatility. As there
is no history of option lives at Cardo, the expected term of options granted is the midpoint between the vesting periods
and the contractual life of the options. The risk-free rate for periods within the contractual life of the option is based on
the U.S. Treasury yield curve in effect at the time of grant. The forfeiture rate is based on an analysis of the nature of the
recipients' jobs and relationships to the Company.
A summary of stock option activity as of September 30, 2009, and
changes during the period then ended is presented below.
Weighted-
Weighted-
Average
Average
Remaining
Aggregate
Exercise
Contractual
Intrinsic
Options
Price
Life (Years)
Value
Outstanding at December 31, 2008
2,398,400
$
0.23
Granted
-
-
Exercised
-
-
Forfeited
(40,000)
$
0.23
Outstanding at September 30, 2009 (unaudited)
2,358,400
$
0.23
8.92
$
1,721,632
Exercisable at September 30, 2009 (unaudited)
471,680
$
0.23
8.92
$
344,326
The aggregate intrinsic value represents the closing stock price as of
September 30, 2009 less the exercise price, multiplied by the number of options that have an exercise price that is less
than the closing stock price.
NOTE 5 — STOCKHOLDERS' EQUITY
On June 30, 2009, Cardo completed a private placement with investors to purchase 8,689,319
shares ("Purchaser Shares") of the Company's common stock, par value $0.001 per share at a price of $0.35
per share for aggregate total proceeds of $3,023,013 (net of legal fees of $18,247). The Purchaser Shares have a
24-month lock up provision.
As of September 30, 2009, the Company had not yet issued a portion
of the Purchaser Shares and has recorded this amount as common stock issuable. The Company subsequently issued
these shares on October 6, 2009.
During the quarter ended September 30, 2009, the Company received
$170,000 towards a private placement subject to the terms of the June 30, 2009 private placement. The private
placement closed on September 21, 2009 but the common shares were not issued until October 6, 2009. Accordingly,
the $170,000 is included in common stock issuable at the balance sheet date.
F-29
NOTE 6 — SEGMENT INFORMATION
Cardo's businesses are currently organized into the following two reportable segments;
reconstructive products (the "Reconstructive Division") and spine products (the "Spine Division").
The Reconstructive Division segment is comprised of activity relating to Cardo's unicompartmental knee, patella-femoral
products, and reconstructive knee products.  The Spine Division segment is comprised of the spinal lumbar fusion
system and cervical plate and screw systems.
These reportable segments are based on the nature of the products
offered.  Management evaluates performance and allocates resources based on several factors, of which the primary
financial measure is segment operating results.  Due to the distinct nature of the products in the Reconstructive Division,
and the fact that it has a more developed market for its products, it is considered by management as a separate
segment.  The Spine Division is still in the process of developing the market and obtaining instrumentation necessary to
sell the products in greater quantities.  As a result, the Spine Division is considered by management as a separate
segment.  The accounting policies of the reportable segments are the same as those described in Note 1.
As of September 30, 2009, the Reconstructive Division includes
$1,232,823 of goodwill and $4,515,157 in other intangible assets relating to Cardo's unicompartmental knee product.
These amounts are expected to be deductible for income tax purposes.
The following table sets forth financial information by reportable
segment as of September 30, 2009 and for the nine and three months ended September 30, 2009 and 2008:
(In thousands)
Reconstructive
Spine
Division
Division
Corporate
Total
Nine Months Ended September 30, 2009 (unaudited)
Net sales
$
1,175
$
139
$
-
$
1,314
Total cost of sales and operating expenses
226
28
3,972
4,226
Depreciation and amortization
848
4
26
878
Interest income, net
-
-
22
22
Net income (loss)
$
101
$
107
$
(3,976)
$
(3,768)
Property and equipment acquisitions
$
789
$
14
$
59
$
862
Total assets
$
9,169
$
269
$
1,801
$
11,239
Nine Months Ended September 30, 2008 (unaudited - restated)
Net sales
$
885
$
47
$
-
$
932
Total cost of sales and operating expenses
125
14
3,590
3,729
Depreciation and amortization
319
3
12
334
Interest expense, net
-
-
37
37
Net income (loss)
$
441
$
30
$
(3,639)
$
(3,168)
Three Months Ended September 30, 2009 (unaudited)
Net sales
$
351
$
85
$
-
$
436
Total cost of sales and operating expenses
76
8
1,250
1,334
Depreciation and amortization
303
2
8
313
Interest income, net
-
-
6
6
Net income (loss)
$
(28)
$
75
$
(1,252)
$
(1,205)
Three Months Ended September 30, 2008 (unaudited - restated)
Net sales
$
386
$
25
$
-
$
411
Total cost of sales and operating expenses
62
8
1,011
1,081
Depreciation and amortization
211
1
4
216
Interest expense, net
-
-
5
5
Net income (loss)
$
113
$
16
$
(1,010)
$
(881)
F-30
All of the Company's net sales were attributable to activity in the
United States. There were no long-lived assets held in foreign countries.
NOTE 7 — SUBSEQUENT EVENTS
At a hearing held on September 15, 2009, Cardo, the successful bidder at an auction sale, was
authorized to purchase substantially all of the assets of Vertebron, Inc. ("Vertebron") free and clear of all liens by the
United States Bankruptcy Court for the District of Connecticut (the "Bankruptcy Court"). On September 29, 2009, the
Bankruptcy Court issued an order memorializing the hearing held on September 15, 2009 (the "Order").
As a result of the Order, on September 30, 2009, Cardo entered into an Asset Purchase
Agreement (the "Agreement") with Vertebron, as a debtor-in-possession, to purchase substantially all of Vertebron's
assets, excluding certain assets, such as accounts receivable, cash and cash equivalents as of the closing date.
Pursuant to the Agreement, the purchase price for the assets is $1,300,000 to be paid in cash.
On October 1, 2009, the Company completed the transaction by wiring the $1.17 million balance
due under the Agreement.  Pursuant to the Agreement, Cardo did not establish control of the assets acquired in this
transaction until full consideration was received by Vertebron; therefore, the condensed consolidated financial
statements as of September 30, 2009 do not reflect this transaction. Included in deposits and other assets at September
30, 2009 are cash deposits required by the Bankruptcy Court totaling $130,000 and $29,033 of direct costs associated
with the Vertebron transaction.
On October 27, 2009, the Company sold 9,949,276 shares of its common stock, par value
$0.001 per share, at a price of $0.35 per share for aggregate gross proceeds of $3,482,250 as part of a private
placement for maximum gross proceeds of $6,500,000. The placement agent is a related party through a significant
common shareholder.
In connection with this private placement, the Company paid a finder's fee of 8% on a portion of
the gross proceeds and granted 379,398 share purchase warrants. Each share purchase warrant entitles the holder to
purchase one share of the Company's common stock at an exercise price of $0.44 per share for a period of up to five
years.
The Company evaluated subsequent events through November 12, 2009, the date this Quarterly Report on Form 10-Q was filed with the SEC.
F-31
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City of Beverly Hills, state of California, on December 18, 2009.
CARDO MEDICAL, INC.
By:
/s/ ANDREW A. BROOKS
Name:   Andrew A. Brooks
Title:     Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature
Title
Date
/s/ Andrew A. Brooks
Chief Executive Officer and
Director
December 18, 2009
Andrew A. Brooks
(Principal Executive Officer)
/s/ Derrick Romine
Chief Financial Officer
December 18, 2009
Derrick Romine
(Principal Financial and Accounting Officer)
/s/ Michael Kvitnitsky
Chief Operating Officer and Director
December 18, 2009
Michael Kvitnitsky
/s/ Joseph Loggia
Director
December 18, 2009
Joseph Loggia
/s/ Thomas H. Morgan
Director
December 18, 2009
Thomas H. Morgan
/s/ Ronald N. Richards
Director
December 18, 2009
Ronald N. Richards
/s/ Steven D. Rubin
Director
December 18, 2009
Steven D. Rubin
/s/ Subbarao Uppaluri
Director
December 18, 2009
Subbarao Uppaluri
EXHIBIT INDEX
The following exhibits have been filed as part of this Registration Statement on Form S-1.
Incorporated By Reference
Exhibit Number
Exhibit Description
Form
File Number
Exhibit
Filing Date
2.1
Merger Agreement and Plan of Reorganization, dated as of June 18, 2008, by and among clickNsettle.com, Inc.,
Cardo Medical, LLC and Cardo Acquisition, LLC.
8-K
000-21419
2.1
June 23, 2008
2.2
First Amendment to Merger Agreement and Plan of Reorganization, dated as of August 29, 2008, by and among
clickNsettle.com, Inc., Cardo Medical, LLC and Cardo Acquisition, LLC.
8-K
000-21419
2.2
September 9, 2008
2.3
Asset Purchase Agreement, dated September 30, 2009, by and among Cardo Medical, Inc. and Vertebron,
Inc.
8-K
000-21419
2.1
October 6, 2009
3.1
Amended and Restated Certificate of Incorporation
8-K
000-21419
3.1
March 18, 2008
3.2
Amended and Restated Bylaws.
8-K
000-21419
3.1
February 1, 2008
5.1#
Opinion of Akerman Senterfitt
10.1
Escrow Agreement, dated as of August 29, 2008, by and among Chicago Title Company, clickNsettle.com, Inc.
Andrew A. Brooks, M.D. and Mikhail Kvitnitsky.
8-K
000-21419
10.1
September 9, 2008
10.2
Form of Lockup Agreement.
8-K
000-21419
10.2
September 9, 2008
10.3
Lockup Agreement, dated August 29, 2008, for Derrick Romine.
8-K
000-21419
10.3
September 9, 2008
10.4
Amended and Restated 1996 Incentive and Nonqualified Stock Option Plan.
10-KSB
September 28, 1998
10.5*
Form of Cardo Medical, LLC Nonstatutory Option Agreement
8-K
000-21419
10.5
September 9, 2008
10.6
Stock Purchase Agreement, dated as of December 19, 2007, by and among clickNsettle.com, Inc., Frost Gamma
Investments Trust, Dr. Jane Hsiao, Steven D. Rubin and Subbarao Uppaluri.
8-K
000-21419
10.1
December 21, 2007
10.7
First Amendment to Stock Purchase Agreement, dated as of January 31, 2008, by and among clickNsettle.com, Inc.,
Frost Gamma Investments Trust, Dr. Jane Hsiao, Steven D. Rubin and Subbarao Uppaluri.
8-K
000-21419
10.2
February 1, 2008
10.8*
Employment Agreement, dated as of January 31, 2005, by and between Accelerated Innovation, LLC, as successor
to Accin Corporation, and Mikhail Kvitnitsky.
8-K
000-21419
10.8
September 9, 2008
10.9*
Amendment to Employment Agreement, dated as of June 6, 2008, by and between Accelerated Innovation, LLC and
Mikhail Kvitnitsky.
8-K
000-21419
10.9
September 9, 2008
10.10*
Termination Agreement, effective as of June 23, 2008, by and between Accelerated Innovation, LLC and Mikhail
Kvitnitsky.
8-K
000-21419
10.10
September 9, 2008
10.11*
Employment Offer Letter with Derrick Romine dated September 5, 2008.
8-K
000-21419
10.11
September 9, 2008
10.12
Form of Indemnification Agreement for officers and directors.
8-K
000-21419
10.12
September 9, 2008
10.13+
Agreement, dated as of August 22, 2006, by and between Accelerated Innovation, LLC, as successor to Accin
Corporation, and Infinesse Corporation.
8-K
000-21419
10.13
September 9, 2008
10.14
Supplier Agreement, dated June 16, 2006, between Stelkast Company and Accelerated Innovation, LLC, as
successor to Accin.
8-K
000-21419
10.14
September 9, 2008
10.15+
Contracted Services Agreement, dated September 1, 2007, by and between Accelerated Innovation, LLC and Summit
Corporate Services, Inc.
8-K
000-21419
10.15
September 9, 2008
10.16
Agreement dated April 30, 2008, by and among Mikhail Kvitnitsky and Accelerated Innovation, LLC, Cervical Xpand,
LLC and Uni-Knee, LLC.
8-K
000-21419
10.16
September 9, 2008
10.17
Agreement dated April 30, 2008, by and among John D. Kuczynski, Accelerated Innovation, LLC and Uni-Knee,
LLC.
8-K
000-21419
10.17
September 9, 2008
10.18
Agreement dated April 30, 2008, by and among Richard H. Rothman, M.D., Ph.D., Accelerated Innovation, LLC and
Cervical Xpand, LLC.
8-K
000-21419
10.18
September 9, 2008
10.19
Agreement dated April 30, 2008, by and among Todd J. Albert, M.D., Accelerated Innovation, LLC and Cervical
Xpand, LLC.
8-K
000-21419
10.19
September 9, 2008
10.20
Agreement dated April 28, 2008, by and among, Rafail Zubok, Accelerated Innovation, LLC and Cervical Xpand,
LLC.
8-K
000-21419
10.20
September 9, 2008
10.21*
Nonstatutory Option Agreement, dated August 27, 2008, by and between Cardo Medical, LLC and Derrick
Romine.
10-Q
000-21419
10.1
November 14, 2008
10.22
Form of Registration Rights Agreement, dated October 27, 2009, by and among Cardo Medical, Inc. and the Several
Purchasers.
8-K
000-21419
10.1
October 29, 2009
21.1
Subsidiaries of clickNsettle.com, Inc.
8-K
000-21419
21.1
September 9, 2008
23.1#
Consent of Stonefield Josephson, Inc.
23.2#
Consent of Akerman Senterfitt (included in Exhibit 5.1)
#
Filed herewith.
*
Management compensation plan or agreement.
+
Confidential Treatment has been requested as to a portion of this exhibit.  The confidential portion of this exhibit has
been omitted and filed separately with the Securities and Exchange Commission.