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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  FOR ANNUAL AND TRANSITION
    REPORTS PURSUANT TO
    SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2008; oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Transition period
    from          to          .   Commission File Number
    001-15063
  Endocare, Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

33-0618093(State of
    incorporation)

(I.R.S. Employer Identification
    No.)201 Technology, Irvine, CA(Address
    of principal executive offices)

92618(Zip
    Code)
   Registrants telephone number, including area code:
    (949) 450-5400
 Securities registered pursuant to Section 12(b) of the
    Act: None
 Securities registered pursuant to Section 12(g) of the
    Act:
 Common Stock, $.001 par value
 Rights
    to Purchase Shares of Series A Junior Participating
    Preferred Stock
 (Title of Class)
  o þ
  o þ
  þ o þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company þ   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Forms 10-K, 8-K 10-Q Form 10-K.




---



##### 





Endocare,
    Inc.
  Form 10-K
  For the
    Fiscal Year Ended December 31, 2008
  TABLE OF
    CONTENTS
   
 PagePART IItem 1.


Business


1Item 1A.


Risk Factors


15Item 1B.


Unresolved Staff Comments


31Item 2.


Properties


31Item 3.


Legal Proceedings


32Item 4.


Submission of Matters to a Vote of Security
    Holders


32PART IIItem 5.


Market For Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


33Item 6.


Selected Consolidated Financial Data


33Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


33Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


50Item 8.


Financial Statements and Supplementary Data


50Item 9.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


50Item 9A.


Controls and Procedures


51Item 9B.


Other Information


53PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


53Item 11.


Executive Compensation


56Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


65Item 13.


Certain Relationships and Related Transactions
    and Director Independence


68Item 14.


Principal Accountant Fees and Services


69PART IVItem 15.


Exhibits and Financial Statement Schedules


70Signatures


71Financial Statements


F-1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   i




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PART I  Form 10-K Form 10-Q. Form 10-K, Form 10-Q.
  ® tm ® ® ®, ® ® tm ® ® tm ® ® tm tm ® ® ® tm R-Probe tm ® tm ® tm ® ® ® ®, tm ® Form 10-K Form 10-K
  Item 1.
    Business  Overview
      (949) 450-5400. page F-2.
  Recent
    Events
   1




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Form 10-K
    Form 10-K
      Form 10-K,
 2




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Form 10-K www.endocare.com
  Advent of
    Cryoablation
      tm
  Existing
    Markets for Cryoablation
       3




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Potential
    Future Markets
        tm
  Endocare
    Cryoablation Technology Development
     4




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Our
    System Solution: Cryocare CS
      Key
    Clinical Advantages of Our Cryocare CS System
    
    High quality of life following treatment.  Our
    minimally invasive procedure typically offers patients a short
    recovery period for prostate cancer therapy and may result in a
    lower incidence of certain side effects, including incontinence.
    Treatment of patients who have failed radiation
    therapy.Cryoablation is an effective option that
    can be used to treat patients who have a recurrence following
    radiation therapy with potentially fewer side effects than
    radical surgery.
    Treatment can be performed more than
    once.  Regardless of what therapy is chosen, there
    is always a chance that the cancer will recur. Unlike radiation
    therapy or surgery, cryoablation can be repeated without
    increased morbidity.
    Focal or partial gland treatment.  Focal
    cryoablation is a prostate cancer treatment in which the
    ablation is confined to the known tumor location, thereby
    sparing surrounding tissue.  Marketing
    and Strategy
  Cryoablation
    Products
       5




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
    Increasing awareness in the urological community regarding the
    clinical benefits of cryoablation through our presence at major
    technical meetings and trade shows, publication of numerous
    scientific papers and articles on cryoablation and formation of
    a scientific advisory board to provide guidance and counsel to
    us regarding clinical matters and physician education;
    Conducting post-market clinical studies to further demonstrate
    the safety and efficacy of cryoablation as a primary treatment
    of prostate cancer;
    Conducting post-market clinical studies to further demonstrate
    the safety and efficacy of cryoablation as a salvage treatment
    for prostate cancer patients who have failed radiation
    treatments;
    Conducting post-market clinical studies to further demonstrate
    the safety and efficacy of cryoablation as a treatment for renal
    tumors, which is another important component of the urology
    market for cryoablation;
    Creating a significant number of new practicing cryosurgeons
    each year through our physician education program;
    Endeavoring to ensure that reimbursement for cryoablation by
    Medicare and other payers is appropriate given the costs and
    benefits of the treatment;
    Driving patient awareness through our direct-to-consumer
    marketing programs; and
    Marketing our products to physicians and hospitals through our
    direct sales force. 6




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
    Conducting key clinical studies to demonstrate the safety and
    efficacy of cryoablation as a primary treatment for lung and
    liver tumors as well as for palliative intervention (treatment
    of pain associated with metastases); and
    Formation of a dedicated sales group focused on the
    opportunities for cryoablation treatment approaches in these new
    markets.  Products
    Prostate
    and Renal Cancer:
  
    Cryocare Surgical System  A cryoablation system with
    eight cryoprobe capability.
    Cryocare CS System  A Cryocare Surgical System with
    onboard ultrasound.
    CryoGuide  A computerized cryoprobe placement,
    simulation and guidance system for cryoablation.
    Cryoprobes  Disposable probes used with the Cryocare
    Surgical System.
    FasTrac  Percutaneous access device that allows
    one-step insertion of cryoprobes.
    Urethral Warming Catheter  Disposable catheter used
    in prostate cryoablation procedures.  Additional
    Cryoablation Markets:
  
    Cryocare Surgical System  A cryoablation system with
    eight cryoprobe capability specially configured for
    interventional radiology and oncology.  Raw
    Materials
    Patents
    and Intellectual Property
   7




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Research
    Strategy
      Sales
    2006


2007


2008Cryoablation and urological products:Cryocare Surgical Systems


*



*



*Cryoprobes, disposables and procedures


94
%


93
%


94
%Cardiac products (CryoCath)


*



*



*     *
    
    These products account for less than 15 percent of total
    revenues. 8




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2006


2007


2008(In thousands)United States

$
26,379


$
27,548


$
29,018International:Canada


796



892



903China


451



690



792Other


364



557



849Total international


1,611



2,139



2,544Total revenues

$
27,990


$
29,687


$
31,562   Reimbursement
             9




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Backlog
    Manufacturing
  and/or
    Government
    Regulation
       10




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
    quality system regulation, which requires manufacturers to
    follow design, testing, control, documentation and other quality
    assurance procedures during the manufacturing process;
    labeling regulations, which require specific information on
    product labels and in labeling, prohibit certain information,
    prohibit the promotion of products for unapproved or
    off-label uses and impose other restrictions on
    labeling; and
    medical device reporting regulations, which require that
    manufacturers report to the FDA if their device may have caused
    or contributed to a death or serious injury or malfunctioned in
    a way that would likely cause or contribute to a death or
    serious injury if it were to recur.    
    fines, injunctions, and civil penalties;
    recall or seizure of our products;
    operating restrictions, partial suspension or total shutdown of
    production;
    refusing our request for 510(k) clearance or premarket approval
    of new products;
    withdrawing 510(k) clearance or premarket approvals that are
    already granted; and
    criminal prosecution.      Health
    Care Regulatory Issues
     11




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and/or and/or
  Anti-Kickback
    Laws
         12




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Patient
    Referral Laws
           13




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HIPAA and
    Other Privacy Laws
      Other
    United States Regulatory Requirements
    Seasonality
    Competition
    Employees
   14




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Available
    Information
  Form 10-K, Form 10-Q, Form 8-K,
  Item 1A.
    Risk
    Factors  Risks
    Associated with Endocares Business
  We have a
    limited operating history with significant losses and can give
    no assurances when or whether we will ever be profitable or have
    capital sufficient to sustain our operations.
              Our
    business may be materially and adversely impacted by the loss of
    our largest customer or the reduction, delay or cancellation of
    orders from this customer; in addition, our business may be
    materially and adversely impacted if this customer delays
    payment or fails to pay for products.
   15




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We may be
    required to make tax payments that exceed our settlement
    estimates, which may result in a material adverse effect on our
    financial condition, results of operations and cash
    flows.
    Our
    facilities and systems are vulnerable to natural disasters or
    other catastrophic events, which could interrupt our operations
    for an extended period of time, and could have a material
    adverse effect on our business.
    Risks
    Associated with an Investment in Endocares Common
    Stock
  The
    market price of our common stock is highly volatile.
    
    announcements of technological innovations by us or other
    companies;
    regulatory matters;
    new or existing products or procedures;
    concerns about our financial position and operating results;
    litigation developments;
    government regulation;
    developments or disputes relating to agreements, patents or
    proprietary rights;
    differences between our actual financial and operating results
    and those expected by investors and analysts;
    fluctuations in our results of operations;
    changes in analysts recommendations or projections; 16




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
    changes in general valuations for medical device companies;
    changes in general economic or market conditions; and
    broad market fluctuations.    Historically
    our common stock has a low trading volume and any sale of a
    significant number of shares is likely to depress the trading
    price.
    Future
    sales of shares of our common stock, or the perception of
    significant future sales, may negatively affect our stock
    price.
        If
    Endocare fails to meet all applicable continued listing
    requirements of the NASDAQ Capital Market and NASDAQ determines
    to delist Endocares common stock, the market liquidity and
    market price of Endocares common stock could
    decline.
   17




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The
    anti-takeover provisions in our charter, our stockholder rights
    plan and certain provisions of Delaware law could prevent a
    third party from acquiring us or limit the price that investors
    may be willing to pay for shares of our common stock.
      The
    issuance of common stock in the Merger and the Financing will
    trigger an ownership change that will negatively impact our
    ability to utilize net operating loss and capital loss deferred
    tax assets in the future.
   18




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Risks
    Related to the Merger
  If the
    proposed Merger with Galil is consummated, Endocares
    business could suffer materially and Endocares stock price
    could decline.
    
    some of Endocares suppliers, distributors and other
    business partners may seek to adversely change or terminate
    their relationships with Endocare as a result of the
    consummation of the Merger;
    as a result of the consummation of the Merger, current and
    prospective employees could experience uncertainty about their
    future roles within the combined company, and this uncertainty
    may adversely affect Endocares ability to retain its key
    employees, who may seek other employment opportunities;
    as a result of the Merger, Endocare may assume significant known
    and unknown liabilities of Galil, including liabilities with
    respect to taxes; and
    Endocares management team may be distracted from day to
    day operations as a result of the consummation of the Merger and
    the required integration processes.      
    the combined company does not achieve the perceived benefits of
    the Merger as rapidly or to the extent anticipated, if at all,
    by the combined company or financial or industry analysts;
    the dilution of Endocares outstanding common stock as a
    result of the issuance of shares of common stock in the Merger
    and the Financing may negatively affect the trading price of
    Endocares common stock; or
    the effect of the Merger on the combined companys business
    and prospects is not consistent with the expectations of
    financial or industry analysts.  The
    Merger may be completed even though material adverse changes may
    result from the announcement of the Merger, industry-wide
    changes and other causes.
   19




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
    changes or proposed changes in law or accounting standards or
    interpretations thereof applicable to Endocare or Galil;
    provided that such changes do not have a materially
    disproportionate effect on Endocare or Galil, as the case may
    be, relative to other companies operating in their industry;
    changes in global, national or regional economic or political
    conditions (including acts of war (whether or not declared),
    armed hostilities, sabotage, military actions or the escalation
    thereof (whether underway on the date of execution of the Merger
    Agreement or thereafter commenced), and terrorism) or in general
    financial, credit, business, or securities market conditions,
    including changes in interest rates or the availability of
    credit financing; provided that such changes do not have a
    materially disproportionate effect on Endocare or Galil, as the
    case may be, relative to other companies operating in their
    industry;
    changes generally applicable in the industries in which Endocare
    and Galil operate;
    any failure of Endocare or Galil, as the case may be, to meet
    internal or analysts estimates, projections or forecasts
    of revenues, earnings or other financial or business metrics (it
    being understood that the cause of any such failure may be taken
    into consideration when determining whether a material adverse
    change has occurred or would be reasonably likely to
    occur); or
    a decline in the market price, or a change in the trading
    volume, of the capital stock of Endocare (it being understood
    that the cause of any such decline or change may be taken into
    consideration when determining whether a material adverse change
    has occurred or would be reasonably likely to occur).    Ownership
    of Endocares common stock may be highly concentrated after
    consummation of the Merger and the Financing.
    The
    required repayment of pre-merger bridge financing of Galil will
    decrease the funds available to Endocare after consummation of
    the Merger and the Financing.
   20




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Antitrust
    authorities may attempt to delay or prevent consummation of the
    Merger.
  Hart-Scott-Rodino
  Endocare
    may assume significant tax liabilities of Galil with respect to
    which it may be dependent on third parties for indemnification
    or for which it may not be entitled to indemnification at
    all.
    Endocares
    stockholders and Galils shareholders may not realize a
    benefit from the Merger commensurate with the ownership dilution
    they will experience in connection with the Merger and the
    Financing.
    During
    the pendency of the Merger, Endocare may not be able to
    implement desirable business decisions or enter into a business
    combination with another party because of restrictions in the
    Merger Agreement.
    The lack
    of a public market for Galils shares makes it difficult to
    evaluate the fairness of the Merger consideration payable to the
    Galil shareholders, and the Galil shareholders may receive
    consideration in the Merger that is greater than the fair market
    value of Galils shares.
   21




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If any of
    the events described in Risks Associated with
    Endocares Business, Risks Related to
    Galil or Risks Related to Endocare and the Combined
    Company and the Industry in Which They Will Operate occur,
    those events could cause the potential benefits of the Merger
    not to be realized.
    If the
    proposed Merger with Galil is not consummated, Endocares
    business could suffer materially and Endocares stock price
    could decline.
    
    Endocare has incurred and expects to continue to incur
    significant expenses related to the proposed Merger with Galil
    even if the Merger is not ultimately consummated;
    The Merger Agreement contains covenants relating to
    Endocares solicitation of competing acquisition proposals
    and the conduct of Endocares business between the date of
    signing the Merger Agreement and the closing of the Merger. As a
    result, significant business decisions and transactions outside
    of the ordinary course of business before the closing of the
    Merger require the consent of Galil. Accordingly, Endocare may
    be unable to pursue business opportunities that would otherwise
    be in its best interest as a standalone company;
    if the Merger Agreement is terminated after Endocare has
    invested significant time and resources in the transaction
    process, Endocare will have a limited ability to continue its
    current operations without obtaining additional financing to
    fund its operations;
    The Financing is conditioned upon the consummation of the Merger
    and, thus, if the Merger is not consummated, Endocare may be
    forced to seek financing on less favorable terms or may not be
    able to secure financing at all, which may require Endocare to
    reduce or terminate operations;
    Endocare could be obligated to pay Galil a $900,000 termination
    fee and to reimburse Galil for its expenses incurred in
    connection with the Merger and the Financing up to $850,000, as
    a result of the termination of the Merger Agreement, depending
    on the reason for the termination; and
    Endocares customers, prospective customers, employees and
    other business partners, and investors in general, may view the
    failure to consummate the Merger as a poor reflection on
    Endocares business or prospects.  Risks
    Related to Galil
  Galil is
    incorporated under the laws of, and its principal offices are
    located in, the State of Israel and therefore its business
    operations may be harmed by adverse political, economic and
    military conditions affecting Israel.
   22




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Galil has
    a limited operating history with significant losses.
        Tax
    benefits Galil receives through operating in Israel may be
    terminated or reduced in the future, which would increase
    Galils costs.
   23




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The
    Israeli government grants Galil has received for research and
    development expenditures restrict its ability to manufacture
    products and transfer technologies outside of Israel and require
    it to satisfy specified conditions.
    Galils
    operations may be disrupted by the obligation of its personnel
    to perform military service.
    Galil is
    subject to risks arising from currency exchange rates, which
    could increase its costs and may have a negative effect on its
    results of operations.
     24




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Risks
    Related to Endocare and the Combined Company and the Industry in
    Which They Will Operate
  We may
    require additional financing in the future to sustain our
    operations and without it we may not be able to continue
    operations.
          and/or
  Our
    success is reliant on the acceptance by doctors and patients of
    our cryoablation systems as a preferred treatment for tumor
    ablation.
   25




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If we are
    unable to continue to enhance our cryoablation systems, our
    business will suffer.
    Our
    intangible assets could become impaired.
      We are
    faced with intense competition and rapid technological and
    industry change, which may make it more difficult for us to
    achieve significant market penetration.
   26




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There is
    uncertainty relating to third-party reimbursement, which is
    critical to market acceptance of our products.
        If we
    fail to protect our intellectual property rights, our
    competitors may take advantage of our ideas and compete directly
    against us.
    Because
    the medical device industry is litigious, we may be sued for
    allegedly violating the intellectual property rights of
    others.
   27




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Our
    ability to conduct medical research and receive medical
    information may be hampered by the privacy regulations developed
    under the Health Insurance Portability and Accountability Act of
    1996, referred to as HIPAA.
    If we
    fail to obtain or maintain necessary regulatory clearances or
    approvals for products, or if approvals are delayed or
    withdrawn, we will be unable to commercially distribute and
    market our products or any product modifications.
   28




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We may be
    required to modify our agreements, operations, marketing and
    expansion strategies in response to changes in the statutory and
    regulatory environment.
    Our
    products may be subject to product recalls even after receiving
    FDA clearance or approval, which would harm our reputation and
    our business.
    We are
    subject to risks associated with doing business
    internationally.
    
    adverse changes in tariff and trade protection measures;
    changes in foreign regulatory requirements;
    potentially negative consequences from changes in or
    interpretations of tax laws;
    differing labor regulations;
    differing product liability regimes;
    changing economic conditions in countries where our products are
    sold or manufactured or in other countries;
    differing local product preferences and product requirements,
    including regulatory requirements;
    exchange rate risks;
    restrictions on the repatriation of funds;
    political unrest and hostilities;
    differing degrees of protection for intellectual
    property; and
    difficulties in coordinating and managing foreign operations. 29




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We could
    be negatively impacted by future interpretation or
    implementation of the federal anti-kickback and Stark Laws and
    other federal and state anti-self-referral and anti-kickback
    laws.
        If we
    become subject to product liability claims, we may be required
    to pay damages that exceed our insurance coverage.
   30




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If our
    products are not accepted by the medical community, or if our
    products are replaced by new technologies, our business may
    suffer.
    Our
    future growth is dependent upon the development of new products,
    which requires significant investment in research and
    development and clinical trials, and may not result in
    commercially viable products.
    Our
    success will depend on our ability to attract and retain key
    skilled personnel and if we are not successful, our business
    will be adversely affected.
    Endocare
    and the combined company will be subject to each of the risks
    described in the sections above entitled Risks Associated
    with Endocares Business and Risks Related to
    Galil. If any of those risks occur, it may have a negative
    effect on our results of operations and our stock price could
    decline.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties   31




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Item 3.
    Legal
    Proceedings    Governmental
    Legal Proceedings
    Item 4.
    Submission
    of Matters to a Vote of Security Holders   32




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PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Information
    High


LowYear Ended December 31, 2008First Quarter

$
7.70


$
5.03Second Quarter

$
7.00


$
3.79Third Quarter

$
4.98


$
1.16Fourth Quarter

$
1.76


$
0.38Year Ended December 31, 2007First Quarter

$
7.02


$
4.86Second Quarter

$
8.85


$
5.25Third Quarter

$
8.79


$
5.91Fourth Quarter

$
10.00


$
6.65   Holders
    Dividends
    Recent
    Sales of Unregistered Securities
  Form 10-Q Form 8-K.
  Issuer
    Purchases of Equity Securities
    Item 6.
    Selected
    Consolidated Financial Data    Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion should be read in conjunction with
    Item 1  Business,
    Item 1A  Risk Factors,  and
    Item 8  Financial Statements and
    Supplementary Data, as well as our consolidated financial
    statements and related notes contained elsewhere in this Annual
    Report on
    Form 10-K.
    This discussion contains forward-
 33




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looking statements based on our current expectations. There
    are various factors  many beyond our
    control  that could cause our actual results or the
    occurrence or timing of expected events to differ materially
    from those anticipated in these forward-looking statements. Some
    of these factors are described below and other factors are
    described elsewhere in this Annual Report on
    Form 10-K,
    including above under Risks Factors in Item 1A
    of this Annual Report on
    Form 10-K.
    In addition, there are factors not described in this Annual
    Report on
    Form 10-K
    that could cause our actual results or the occurrence or timing
    of expected events to differ materially from those anticipated
    in these forward-looking statements. All forward-looking
    statements included in this Annual Report on
    Form 10-K
    are based on information available to us as of the date hereof,
    and, except as required by law, we assume no obligation to
    update any such forward-looking statements.
  Overview
      Recent
    Events
       34




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Form 10-K, Form 10-K www.endocare.com
  Strategy
    and Key Metrics
       35




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Year Ended December 31,

Three Months Ended December 31,2006

2007

2008

2007

2008Estimated domestic cryoablation procedures


7,802



9,373



9,358



2,269



2,236Number of cryoprobes soldStraight probes


33,598



38,909



37,029



9,057



9,012Right-angle probes


4,590



6,308



8,113



1,671



2,055Total


38,188



45,217



45,142



10,728



11,067      36




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##### Table of Contents



Results
    of Operations
    Year Ended December 31,2006


2007


2008(In thousands)Revenues:Product sales:Cryoablation disposable products

$
13,948


$
21,157


$
22,864Cryocare Surgical Systems


1,096



1,573



1,51115,044



22,730



24,375Cryoablation procedure fees


12,298



6,418



6,693Cardiac royalties


604



386



511Other


44



153



(17
)$
27,990


$
29,687


$
31,562Cost of revenues:Cryoablation disposable products and procedure fees

$
11,541


$
9,006


$
9,408Cryocare Surgical Systems


802



774



527$
12,343


$
9,780


$
9,935              37




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##### Table of Contents



Share Based Payment
    Year Ended December 31,2006


2007


2008(In thousands)Cost of revenues

$
12,343


$
9,780


$
9,935Research and development


2,781



2,555



2,346Selling and marketing


15,195



14,855



14,619General and administrative


13,107



12,506



13,078Gain on recovery of note receivable










(750
)Investment impairment










918Gain on legal settlement






(677
)


Total costs and expenses

$
43,426


$
39,019


$
40,146Interest income, net

$
452


$
391


$
168Interest expense related to common stock warrants

$
3,716


$



$
   Year
    Ended December 31, 2008 Compared to Year Ended
    December 31, 2007
  Revenues
  Year EndedDecember 31,2008


2007


$ Change


% Change(Dollars in thousands)Cryoablation disposable products

$
22,864


$
21,157


$
1,707



8.1
%Cryocare Surgical Systems


1,511



1,573



(62
)


(3.9
)%24,375



22,730



1,645



7.2
%Cryoablation procedure fees


6,693



6,418



275



4.3
%Cardiac royalties


511



386



125



32.4
%Other


(17
)


153



(170
)


(111.1
)%$
31,562


$
29,687


$
1,875



6.3
%    38




---



##### Table of Contents



Cost
    of Revenues
  Year EndedDecember 31,2008

2007

$ Change(Dollars in thousands)Cost of revenues

$
9,935


$
9,780


$
155Percent of revenues


31.5
%


32.9
%     Gross
    Profit and Gross Margin
  Year EndedDecember 31,2008


2007


$ Change(Dollars in thousands)Cryoablation disposable products and procedure fees

$
20,149


$
18,569


$
1,580Cryocare surgical systems


984



799



185Cardiac royalties and other


494



539



(45
)$
21,627


$
19,907


$
1,720   Year EndedDecember 31,

Percentage Point2008

2007

Change(Percent of revenues)Cryoablation disposable products and procedure fees


63.8
%


62.6
%


1.2
%Cryocare surgical systems


3.1
%


2.7
%


0.4
%Cardiac royalties and other


1.6
%


1.8
%


(0.2
)%68.5
%


67.1
%


1.4
%     Research
    and Development Expenses
  Year EndedDecember 31,2008

2007

$ Change

% Change(Dollars in thousands)Research and development expenses

$
2,346


$
2,555


$
(209
)


(8.2
)%Percent of total revenues


7.4
%


8.6
%  39




---



##### Table of Contents



Selling
    and Marketing Expenses
  Year EndedDecember 31,2008

2007

$ Change

% Change(Dollars in thousands)Selling and marketing expenses

$
14,619


$
14,855


$
(236
)


(1.6
)%Percent of total revenues


46.3
%


50.0
%     General
    and Administrative Expenses
  Year EndedDecember 31,2008

2007

$ Change

% Change(Dollars in thousands)General and administrative expenses

$
13,078


$
12,506


$
572



4.6
%Percent of total revenues


41.4
%


42.1
%     Business Combinations.
   40




---



##### Table of Contents



Gain
    on Recovery of Note Receivable
  Year EndedDecember 31,2008

2007

$ Change

% Change(Dollars in thousands)Gain on recovery of note receivable

$
(750
)

$



$
(750
)


(100
)%Percent of total revenues


(2.4
)%


     Investment
    impairment
  Year EndedDecember 31,2008

2007

$ Change

% Change(Dollars in thousands)Investment impairment

$
918


$



$
918



100
%Percent of total revenues


2.9
%


   Collaborative and Other Agreements
  Litigation
    Settlement, Net of Related Legal Expenses
  Year EndedDecember 31,2008

2007

$ Change

% Change(Dollars in thousands)Litigation settlement, net of related legal expenses

$



$
(677
)

$
677



100
%Percent of total revenues



%


(2.2
)%     Interest
    Income (Expense), Net
  Year EndedDecember 31,2008

2007

$ Change

% Change(Dollars in thousands)Interest income, net

$
168


$
391


$
(223
)


(57.0
)%Percent of total revenues


0.5
%


1.3
%    41




---



##### Table of Contents



Net
    Loss
  Year EndedDecember 31,2008

2007

$ Change

% Change(Dollars in thousands)Net loss

$
(8,416
)

$
(8,941
)

$
525



5.9
%Percent of total revenues


(26.7
)%


(30.1
)%     Year
    Ended December 31, 2007 Compared to Year Ended
    December 31, 2006
  Revenues
  Year EndedDecember 31,2007


2006


$ Change


% Change(Dollars in thousands)Cryoablation disposable products

$
21,157


$
13,948


$
7,209



51.7
%Cryocare surgical systems


1,573



1,096



477



43.5
%22,730



15,044



7,686



51.1
%Cryoablation procedure fees


6,418



12,298



(5,880
)


(47.8
)%Cardiac royalties


386



604



(218
)


(36.1
)%Other


153



44



109



247.7
%$
29,687


$
27,990


$
1,697



6.1
%          42




---



##### Table of Contents



Cost
    of Revenues
  Year EndedDecember 31,2007

2006

$ Change(Dollars in thousands)Cost of revenues

$
9,780


$
12,343


$
(2,563
)Percent of revenues


32.9
%


44.1
%     Gross
    Profit and Gross Margin
  Year EndedDecember 31,2007


2006


$ Change(Dollars in thousands)Cryoablation disposable products and procedure fees

$
18,569


$
14,705


$
3,864Cryocare surgical systems


799



294



505Cardiac royalties and other


539



648



(109
)$
19,907


$
15,647


$
4,260   Year Ended

PercentageDecember 31,

Point2007

2006

Change(Percent of revenues)Cryoablation disposable products and procedure fees


62.6
%


52.5
%


10.1
%Cryocare surgical systems


2.7
%


1.1
%


1.6
%Cardiac royalties and other


1.8
%


2.3
%


(0.5
)%67.1
%


55.9
%


11.2
%     Research
    and Development Expenses
  Year EndedDecember 31,2007

2006

$ Change

% Change(Dollars in thousands)Research and development expenses

$
2,555


$
2,781


$
(226
)


(8.1
)%Percent of total revenues


8.6
%


9.9
%    43




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##### Table of Contents



Selling
    and Marketing Expenses
  Year EndedDecember 31,2007

2006

$ Change

% Change(Dollars in thousands)Selling and marketing expenses

$
14,855


$
15,195


$
(340
)


(2.2
)%Percent of total revenues


50.0
%


54.3
%     General
    and Administrative Expenses
  Year EndedDecember 31,2007

2006

$ Change

% Change(Dollars in thousands)General and administrative expenses

$
12,506


$
13,107


$
(601
)


(4.6
)%Percent of total revenues


42.1
%


46.8
%       Litigation
    Settlement, Net of Related Legal Expenses
  Year EndedDecember 31,2007

2006

$ Change

% Change(Dollars in thousands)Litigation settlement, net of related legal expenses

$
(677
)

$



$
(677
)


100.0
%Percent of total revenues


(2.2
)%


0.0
%    44




---



##### Table of Contents



Interest
    Income, Net
  Year EndedDecember 31,2007

2006

$ Change

% Change(Dollars in thousands)Interest income, net

$
391


$
452


$
(61
)


(13.5
)%Percent of total revenues


1.3
%


1.6
%     Interest
    Expense Related to Common Stock Warrants
  Year EndedDecember 31,2007

2006

$ Change

% Change(Dollars in thousands)Interest expense related to common stock warrants

$



$
(3,716
)

$
3,716



(100
)%Percent of total revenues






(13.3
)%   No. 00-19-02, Accounting for Registration Payment Arrangements Private Placement of Common
    Stock and Warrants
  Loss
    from Continuing Operations
  Year EndedDecember 31,2007

2006

$ Change

% Change(Dollars in thousands)Loss from continuing operations

$
(8,941
)

$
(11,076
)

$
(2,135
)


(19.3
)%Percent of total revenues


(30.1
)%


(39.6
)%    45




---



##### Table of Contents



Income
    from Discontinued Operations
  Year EndedDecember 31,2007

2006

$ Change

% Change(Dollars in thousands)Income from discontinued operations

$



$
311


$
(311
)


(100.0
)%Percent of total revenues






1.1
%     Net
    Loss
  Year EndedDecember 31,2007

2006

$ Change

% Change(Dollars in thousands)Net loss

$
(8,941
)

$
(10,765
)

$
(1,824
)


(16.9
)%Percent of total revenues


(30.1
)%


(38.5
)%     Off
    Balance Sheet Financing
  Regulation S-K.
  Liquidity
    and Capital Resources
      Business
    Combinations.
 46




---



##### Table of Contents



Form S-4
 47




---



##### Table of Contents



Critical
    Accounting Policies
  Form S-4.
  Revenue Recognition. Revenue
    Recognition in Financial Statements No. 00-21 ,
    Revenue Arrangements with Multiple Deliverables
           48




---



##### Table of Contents



Impairment of Long-Lived Assets. Accounting for the
    Impairment or Disposal of Long Lived Assets,
  Legal and Other Loss Contingencies. Accounting for Contingencies,
  Other Investments. Fair Value
    Measurements FAS 115-1 FAS 124-1, The Meaning of Other-Than-Temporary Impairment and Its
    Application to Certain Investments, Consolidation of Variable Interest Entities, an
    interpretation of ARB No. 51.
  Income Taxes. , Accounting for Uncertainty
    in Income Taxes, an interpretation of SFAS No. 109
  Stock based Compensation. Share-Based Payments.
 49




---



##### Table of Contents



Share-Based Payment.
  Inflation
    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk        Item 8.
    Financial
    Statements and Supplementary Data  Form 10-K page F-1.
  Item 9.
    Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosure   50




---



##### Table of Contents



Item 9A.
    Controls
    and Procedures  Evaluation of Disclosure Controls and
    Procedures.
  Rule 13a-15(b)
  Managements Annual Report on Internal Control
    Over Financial Reporting. Rules 13a-15(f) 15d-15(f)
                Changes in Internal Controls.
 51




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     Managements Annual Report on Internal
    Control Over Financial Reporting
            Ernst &
    Young llp
    52




---



##### Table of Contents



Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Directors
    Name

Age(1)

Position with EndocareJohn R. Daniels, M.D.


70


DirectorDavid L. Goldsmith


60


Director and Interim Chairman of the BoardEric S. Kentor


49


DirectorTerrence A. Noonan(2)


71


DirectorThomas R. Testman(3)


72


Director     (1)
    
    All ages are as of December 31, 2008.(2)
    
    Mr. Noonan took a leave of absence from our board of directors
    for health reasons beginning on March 19, 2009.(3)
    
    Our board of directors has determined that Mr. Testman is
    an audit committee financial expert, as defined in
    SEC
    Regulation S-K
    Item 407.  John R. Daniels, M.D. start-up
  David L. Goldsmith
  Eric S. Kentor
 53




---



##### Table of Contents



Terrence A. Noonan
  Thomas R. Testman
  Executive
    Officers
    Name

Age(1)

Position with EndocareMichael R. Rodriguez(2)


41


Senior Vice President, Finance and Chief Financial OfficerClint B. Davis(2)


36


Senior Vice President, Legal Affairs, General Counsel and
    Secretary     (1)
    
    All ages are as of December 31, 2008.(2)
    
    Messrs. Rodriguez and Davis were designated by our board of
    directors as co-principal executive officers on March 19,
    2009, following the resignation for health reasons of Mr. Noonan
    from the positions of Interim Chief Executive Officer and
    President.  Michael R. Rodriguez
 54




---



##### Table of Contents



Clint B. Davis
  Section 16(a)
    Beneficial Ownership Reporting Compliance
    Financial
    Code of Ethics
  Regulation S-K www.endocare.com www.endocare.com Form 8-K
  Audit
    Committee
  Regulation S-K
 55




---



##### Table of Contents



Item 11.
    Executive
    Compensation  2008
    SUMMARY COMPENSATION TABLE
  Non-EquityStock


Option


Incentive Plan


All OtherSalary


Bonus


Awards


Awards


Compensation


Compensation


TotalName and Principal Position

Year


($)


($)(1)


($)


($)


($)


($)


($)(a)

(b)


(c)


(d)


(e)


(f)


(g)


(h)


(i)Terrence A. Noonan,


2008


$
61,538



None



None


$
25,233
(3)


None


$
100
(4)

$
86,871Former Interim CEO & President(2)


2007



None



None



None



None



None



None



NoneMichael R. Rodriguez,


2008


$
230,196



None


$
12,500
(5)

$
92,193
(6)

$
40,514
(11)

$
13,494
(12)

$
388,897SVP, Finance & CFO


2007


$
223,445



None


$
90,875
(8)

$
121,450
(9)

$
110,830
(13)

$
11,535
(12)

$
558,135Clint B. Davis,


2008


$
244,843



None


$
12,500
(5)

$
151,194
(6)

$
43,092
(14)

$
10,798
(15)

$
462,427SVP, Legal Affairs & General Counsel


2007


$
238,000



None


$
88,160
(8)

$
117,733
(9)

$
118,048
(16)

$
9,071
(15)

$
571,012Craig T. Davenport,


2008


$
358,744



None



None


$
95,851
(6)


None


$
8,729
(7)

$
463,324Former CEO & President(2)


2007


$
390,000



None


$
476,923
(8)

$
1,204,707
(9)

$
411,060
(10)

$
11,979
(7)

$
2,494,669     (1)
    
    Amounts earned under our 2008 Management Incentive Compensation
    Program (MICP) and our 2007 MICP are reported under column (g),
    Non-Equity Incentive Plan Compensation.(2)
    
    Mr. Noonan was appointed as our Interim Chief Executive
    Officer and Interim President on October 2, 2008, following
    Mr. Davenports resignation as our Chief Executive
    Officer, President and Chairman on September 30, 2008. On
    March 19, 2009 Mr. Noonan resigned from the positions of
    Interim Chief Executive Officer and Interim President for health
    reasons. The information in this table for Mr. Noonan
    relates to compensation he received in his capacity as Interim
    Chief Executive Officer and Interim President. For information
    regarding Mr. Noonans compensation as a non-employee
    director prior to his appointment as Interim Chief Executive
    Officer and Interim President see the 2008 Director
    Compensation table below.(3)
    
    Represents the aggregate expense under SFAS No. 123R
    recognized by Endocare for 2008 with respect to the stock
    options granted to Mr. Noonan on October 2, 2008. For
    a description of the assumptions made in the
    SFAS No. 123R valuation, see Notes 3 and 8 to the
    financial statements for the year ended December 31, 2008.(4)
    
    Represents the value of our contributions on behalf of
    Mr. Noonan under our accidental death and disability,
    long-term disability and group term life insurance plans.(5)
    
    Represents the aggregate expense under SFAS No. 123R
    recognized by Endocare for 2008 with respect to the RSUs held by
    the respective executive officer. For a description of the
    assumptions made in the SFAS No. 123R valuation, see
    Notes 3 and 8 to the financial statements for the year
    ended December 31, 2008.(6)
    
    Represents the aggregate expense under SFAS No. 123R
    recognized by Endocare for 2008 as a result of option awards
    held by the applicable executive officer, disregarding estimated
    forfeitures. For a description of the assumptions made in the
    SFAS No. 123R valuation, see Notes 3 and 8 to the
    financial statements for the year ended December 31, 2008.(7)
    
    Represents the value of our contributions on behalf of
    Mr. Davenport under our medical, dental, accidental death
    and disability, long-term disability and group term life
    insurance plans.(8)
    
    Represents the aggregate expense under SFAS No. 123R
    recognized by Endocare for 2007 with respect to (i) the
    RSUs granted to the respective executive officer on
    February 23, 2007 ($443,773 for Mr. Davenport, $86,400
    for Mr. Rodriguez and $69,120 for Mr. Davis) and
    (ii) the 20% premium percentage applicable to
    the DSU awards made to the applicable executive officer under
    the Employee DSU Program as a result of the executive
    officers election to receive all or a portion of his
    target incentive payment under the 2007 MICP in the form of DSUs
    instead of cash ($33,150 for Mr. Davenport, $4,475 for
    Mr. Rodriguez and $19,040 for Mr. Davis). For a
    description of the assumptions made in the
    SFAS No. 123R valuation, see Notes 3 and 8 to the
    financial statements for the year ended December 31, 2008.(9)
    
    Represents the aggregate expense under SFAS No. 123R
    recognized by Endocare in 2007 as a result of option awards held
    by the applicable executive officer, disregarding estimated
    forfeitures. For a description of the 56




---



##### Table of Contents



assumptions made in the SFAS No. 123R valuation, see
    Notes 3 and 8 to the financial statements for the year
    ended December 31, 2008.(10)
    
    Includes $245,310 in cash incentive compensation earned during
    2007 under our 2007 MICP. Also includes $165,750 representing
    the aggregate expense under SFAS No. 123R recognized
    by Endocare for 2007 as a result of Mr. Davenports
    election to receive 50% of his target incentive payment under
    our 2007 MICP in the form of DSUs under our Employee DSU
    Program. The 20% premium percentage applicable to
    the DSUs is included in this table under column (e), Stock
    Awards. For a description of the assumptions made in the
    SFAS No. 123R valuation, see Notes 3 and 8 to the
    financial statements for the year ended December 31, 2008.(11)
    
    Consists of cash incentive compensation earned during 2008 under
    our 2008 MICP, based on the aggregate achievement percentage of
    44%.(12)
    
    Represents the value of our contributions on behalf of
    Mr. Rodriguez under our medical, dental, accidental death
    and disability, long-term disability and group term life
    insurance plans.(13)
    
    Includes $88,453 in cash incentive compensation earned during
    2007 under our 2007 MICP. Also includes $22,377 representing the
    aggregate expense under SFAS No. 123R recognized by
    Endocare for 2007 as a result of Mr. Rodriguezs
    election to receive 25% of his target incentive payment under
    our 2007 MICP in the form of DSUs under our Employee DSU
    Program. The 20% premium percentage applicable to
    the DSUs is included in this table under column (e), Stock
    Awards. For a description of the assumptions made in the
    SFAS No. 123R valuation, see Notes 3 and 8 to the
    financial statements for the year ended December 31, 2008.(14)
    
    Represents the aggregate expense under SFAS No. 123R
    recognized by Endocare for 2008 as a result of
    Mr. Davis election to receive 100% of his target
    incentive payment under our 2008 MICP in the form of DSUs under
    our Employee DSU Program. For a description of the assumptions
    made in the SFAS No. 123R valuation, see Notes 3
    and 8 to the financial statements for the year ended
    December 31, 2008.(15)
    
    Amount consists of (i) $10,798 for 2008 and $6,210 for
    2007, representing the value of our contributions on behalf of
    Mr. Davis under our medical, dental, accidental death and
    disability, long-term disability and group term life insurance
    plans, and (ii) $2,861 for 2007 in accrued paid time off
    that we permitted Mr. Davis to cash out and donate to the
    families of current or former employees in need, consistent with
    our policy of permitting employees to cash out and donate
    accrued paid time off in certain circumstances.(16)
    
    Includes $22,848 in cash incentive compensation earned during
    2007 under our 2007 MICP. Also includes $95,200 representing the
    aggregate expense under SFAS No. 123R recognized by
    Endocare for 2007 as a result of Mr. Davis election
    to receive 100% of his target incentive payment under our 2007
    MICP in the form of DSUs under our Employee DSU Program. The 20%
    premium percentage applicable to the DSUs is
    included in this table under column (e), Stock Awards. For a
    description of the assumptions made in the
    SFAS No. 123R valuation, see Notes 3 and 8 to the
    financial statements for the year ended December 31, 2008.  Explanatory
    Information Relating to 2008 Summary Compensation
    Table
    
    All stock options held by Mr. Davenport on
    September 30, 2008, when he resigned from his positions
    with Endocare, expired three months after his resignation
    without being exercised. All restricted stock units (RSUs) held
    by Mr. Davenport on September 30, 2008 were forfeited
    as a result of his resignation.
    As compensation for Mr. Noonans service as Interim
    Chief Executive Officer and Interim President, Endocare agreed
    to pay Mr. Noonan a retainer of $25,000 per month. In
    addition, Mr. Noonan was granted 50,000 stock options on
    October 2, 2008, with an exercise price equal to the
    closing price of our common stock on that date. These options
    vested in equal monthly installments over the first five months
    of Mr. Noonans service.
    Endocare entered into employment agreements with
    Messrs. Rodriguez and Davis in connection with the
    commencement of their employment in August 2004 and January
    2006, respectively. Pursuant to these agreements, each of
    Messrs. Rodriguez and Davis is entitled to a certain amount
    of base salary. This amount was determined based on our
    assessment of the executive officers skill set and
    experience and the market 57




---



##### Table of Contents



value of that skill set and experience, based on competitive
    market data, at the time that Endocare entered into the
    respective employment agreement. Each year, Endocare considers
    whether to adjust the base salaries of senior management,
    including the executive officers, in order to reward individual
    performance, keep pace with cost of living increases and respond
    to competitive considerations.  
    The employment agreements between Messrs. Rodriguez and
    Davis also provide for certain compensation in the case of
    termination or a change in control of Endocare, as described
    below under Potential Payments Upon Termination or Change
    in Control. For these purposes the Merger and the
    Financing do not result in a change in control of Endocare.
    On October 8, 2008, our Compensation Committee approved the
    following compensation items relative to Messrs. Rodriguez
    and Davis: each of Messrs. Rodriguez and Davis was granted
    $25,000 worth of RSUs, based on the October 8, 2008 closing
    price of our common stock. These RSUs vest on April 1, 2009
    if the recipient continues to be employed on that date; and each
    of Messrs. Rodriguez and Davis was granted a cash retention
    amount equal to four months of his base salary, based on his
    base salary in effect on October 8, 2008. This cash
    retention amount will be paid on the first pay date after
    April 1, 2009 if and only if the recipient continues to be
    employed on April 1, 2009.  Outstanding
    Equity Awards at 2008 Fiscal Year-End
  Option Awards


Stock AwardsEquityIncentivePlanEquity


Awards:Incentive


Market orEquity














Plan


PayoutIncentive














Awards:


Value ofPlan Awards:











Market


Number of


UnearnedNumber of


Number of


Number of








Number of


Value of


Unearned


Shares,Securities


Securities


Securities








Shares or


Shares or


Shares, Units


Units orUnderlying


Underlying


Underlying








Units of


Units of


or Other


OtherUnexercised


Unexercised


Unexercised


Option





Stock That


Stock That


Rights That


Rights ThatOptions


Options


Unearned


Exercise


Option


Have Not


Have Not


Have Not


Have Not(#)


(#)


Options


Price


Expiration


Vested


Vested


Vested


VestedName

Exercisable


Unexercisable


(#)


($)


Date


(#)


($)


(#)


($)(a)

(b)


(c)


(d)


(e)


(f)


(g)


(h)


(i)


(j)Terrence A. Noonan(1)


6,667










$
12.45



9/30/2013















Terrence A. Noonan(2)


6,667










$
7.08



1/10/2015















Terrence A. Noonan(3)


6,667










$
9.12



1/10/2016















Terrence A. Noonan(4)


6,667










$
4.95



1/10/2017















Terrence A. Noonan(5)






















2,060


$
824







Terrence A. Noonan(6)






















7,142


$
2,857







Terrence A. Noonan(7)


20,000



30,000






$
1.33



10/2/2018















Michael R. Rodriguez(8)


91,667










$
6.45



8/18/2014















Michael R. Rodriguez(9)


11,805



4,862






$
9.93



2/23/2016















Michael R. Rodriguez(10)






























50,000


$
20,000Michael R. Rodriguez(11)






















18,248


$
7,299







Clint B. Davis(12)


60,763



22,570






$
9.90



1/17/2016















Clint B. Davis(13)






























40,000


$
16,000Clint B. Davis(14)






























13,991


$
5,596Clint B. Davis (11)






















18,248


$
7,299







     Note:
    All market values in the table above are based on the closing
    price of our common stock on December 31, 2008, which was
    $0.40.  (1)
    
    These stock options vested as to 50% of the shares on
    September 30, 2004 and as to the remaining shares on
    September 30, 2005. These stock options were granted to
    Mr. Noonan in connection with his original appointment as a
    non-employee director. 58




---



##### Table of Contents



(2)
    
    These stock options vested as to 100% of the shares on
    January 10, 2006. These stock options were granted to
    Mr. Noonan while he was serving as a non-employee director.(3)
    
    These stock options vested as to 100% of the shares on
    January 10, 2007. These stock options were granted to
    Mr. Noonan while he was serving as a non-employee director.(4)
    
    These stock options vested as to 100% of the shares on
    January 10, 2008. These stock options were granted to
    Mr. Noonan while he was serving as a non-employee director.(5)
    
    These stock awards consist of RSUs that vested on
    January 10, 2009. These RSUs were granted to
    Mr. Noonan while he was serving as a non-employee director.(6)
    
    These stock awards consist of RSUs that will vest on
    May 15, 2009. These RSUs were granted to Mr. Noonan
    while he was serving as a non-employee director.(7)
    
    These stock options vest in five equal monthly installments on
    November 2, 2008, December 2, 2008, January 2,
    2009, February 2, 2009 and March 2, 2009, with vesting
    accelerated if Endocare appoints a new Chief Executive Officer
    before March 2, 2009 and Mr. Noonan remains employed
    by Endocare until such appointment. These RSU were granted to
    Mr. Noonan in connection with his appointment as Interim
    Chief Executive Officer and Interim President on October 2,
    2008.(8)
    
    These stock options vested as to 25% of the shares on
    August 18, 2005 and vested ratably on a monthly basis
    thereafter based on continued employment through August 18,
    2008.(9)
    
    These stock options vested as to 25% of the shares on
    February 23, 2007 and vest ratably on a monthly basis
    thereafter based on continued employment through
    February 23, 2010.(10)
    
    These stock awards consist of RSUs that vest only if Endocare
    achieves specific profitability goals over the
    2007-2009
    period.(11)
    
    These stock awards consist of RSUs that vest on April 1,
    2009 subject to continued employment through that date.(12)
    
    These stock options vested as to 25% of the shares on
    January 17, 2007 and vest ratably on a monthly basis
    thereafter based on continued employment through
    January 17, 2010.(13)
    
    These stock awards consist of RSUs that vest only if Endocare
    achieves specific profitability goals over the
    2007-2009
    period.(14)
    
    These stock awards consist of DSUs elected in lieu of cash under
    the Employee DSU Program and 2008 MICP. 44% of these DSUs became
    vested in the first quarter of 2009 based on performance under
    the 2008 MICP.  Potential
    Payments Upon Termination or Change in Control
       59




---



##### Table of Contents



Termination
    and
    Change-in-Control
    Provisions Applicable to Mr. Rodriguez
  12-month
    
    Mr. Rodriguez is required to perform any and all acts
    requested by Endocare to ensure the orderly and efficient
    transition of his duties;
    for a period of two years after the date of the termination of
    his employment, Mr. Rodriguez is prohibited (for himself or
    for any third party) from diverting or attempting to divert from
    Endocare any business, employee, consultant, customer, vendor or
    service provider, through solicitation or otherwise, or
    otherwise interfering with Endocares business or
    Endocares relationships with its employees, consultants,
    customers, vendors and service providers; and
    Mr. Rodriguez is required to comply with his obligations
    under any other agreements with Endocare, including his
    agreement relating to protection of Endocares confidential
    information.         60




---



##### Table of Contents



Payments andBenefits UponTermination byEndocare WithoutCause or by the





Payments and BenefitsEmployee with Good


Change in Control


for Change in ControlReason (Other than


Payments and


Followed byin Connection with


Benefits


TerminationChange in Control)


(Single-Trigger)(1)


(Double-Trigger)(1)Severance

$
230,476
(2)


None


$
230,476
(2)Bonus


None



None



NoneEarly vesting of stock options


None



None
(3)


None
(3)Early vesting of RSUs


None



None


$
27,299
(4)Benefits

$
13,000
(5)


None


$
13,000
(5)Totals

$
243,476



None


$
270,775     (1)
    
    See above for a description of the single-trigger
    and double-trigger provisions to which
    Mr. Rodriguez is subject.(2)
    
    The severance is paid in the form of salary continuation during
    the 12 months following termination.(3)
    
    On December 31, 2008, the closing price of Endocares
    common stock ($0.40) was lower than the exercise price of any of
    Mr. Rodriguezs stock options.(4)
    
    Amount reflects the 68,248 RSUs held by Mr. Rodriguez,
    multiplied by $0.40, which was the closing price of
    Endocares common stock on December 31, 2007.(5)
    
    Estimated costs of continuing to provide Mr. Rodriguez with
    the benefits generally made available to our employees for one
    year.  Termination
    and
    Change-in-Control
    Provisions Applicable to Mr. Davis
      
    Mr. Davis is required to perform any and all acts requested
    by Endocare to ensure the orderly and efficient transition of
    his duties;
    for a period of two years after the date of the termination of
    his employment, Mr. Davis is prohibited (for himself or for
    any third party) from diverting or attempting to divert from
    Endocare any business, employee, consultant, customer, vendor or
    service provider, through solicitation or otherwise, or
    otherwise interfering with Endocares business or
    Endocares relationships with its employees, consultants,
    customers, vendors and service providers; and
    Mr. Davis is required to comply with his obligations under
    any other agreements with Endocare, including his agreement
    relating to protection of Endocares confidential
    information.   61




---



##### Table of Contents



Payments andBenefits UponTermination byEndocare withoutCause or by the





Payments and BenefitsEmployee with Good


Change in Control


for Change in ControlReason (Other than


Payments and


Followed byin Connection with


Benefits


TerminationChange in Control)


(Single-Trigger)(1)


(Double-Trigger)(1)Severance

$
245,140
(2)


None


$
245,140
(2)Bonus


None



None



NoneEarly vesting of stock options


None



None
(3)


None
(3)Early vesting of RSUs


None



None


$
23,299
(4)Benefits

$
11,000
(5)


None


$
11,000
(5)Totals

$
256,140



None


$
279,439     (1)
    
    See above for a description of the single-trigger
    and double-trigger provisions to which
    Mr. Davis is subject.(2)
    
    The severance is paid in the form of salary continuation during
    the 12 months following termination.(3)
    
    On December 31, 2008, the closing price of Endocares
    common stock ($0.40) was lower than the exercise price of any of
    Mr. Davis stock options.(4)
    
    Amount reflects the 58,248 RSUs held by Mr. Davis,
    multiplied by $0.40, which was the closing price per share of
    Endocares common stock on December 31, 2008.(5)
    
    Estimated costs of continuing to provide Mr. Davis with the
    benefits generally made available to our employees for one year.  2008 Director
    Compensation
  Fees Earnedor Paid in


Stock


OptionCash


Awards


Awards


TotalName

($)


($)


($)


($)(a)

(b)


(c)


(d)


(e)John R. Daniels, M.D.

$
51,500
(2)

$
37,958
(3)


None


$
89,458David L. Goldsmith

$
91,500
(2)

$
37,958
(3)


None


$
129,458Eric S. Kentor

$
67,500
(2)

$
37,958
(3)


None


$
105,458Terrence A. Noonan(1)

$
59,500
(2)

$
37,958
(3)


None


$
97,458Thomas R. Testman

$
62,500
(2)

$
37,958
(3)


None


$
100,458     (1)
    
    This table reflects compensation paid to Mr. Noonan in his
    capacity as director during 2008, prior to his appointment as
    Interim Chief Executive Officer and Interim President on
    October 2, 2008. 62




---



##### Table of Contents



(2)
    
    All of our non-employee directors elected to receive 100% of
    their retainers and meeting fees earned in 2008 in the form of
    DSUs rather than cash, pursuant to our Non-Employee Director DSU
    Program described below. The ultimate value of the DSUs depends
    on the market price of Endocares common stock on the
    payout date selected by each director, in accordance with the
    terms of the Non-Employee Director DSU Program.(3)
    
    Represents the aggregate expense under SFAS No. 123R
    recognized by Endocare for 2008 with respect to RSUs held by the
    applicable director, disregarding estimated forfeitures. For a
    description of the assumptions made in the
    SFAS No. 123R valuation, see Notes 3 and 8 to the
    financial statements included for the year ended
    December 31, 2007. The RSU grants were made on
    January 10, 2008 and May 15, 2008 pursuant to our
    Non-Employee Director RSU Program under our 2004 Stock Incentive
    Plan.    Retainers
      Meeting
    Fees
    Non-Employee
    Director DSU Program
   63




---



##### Table of Contents



Form 8-K
  10-year
  Expense
    Reimbursement
    2004
    Non-Employee Director Option Program
   64




---



##### Table of Contents



Form 10-K
  Non-Employee
    Director RSU Program
  Form 10-K
  Equity
    Compensation Plans Not Approved by Security Holders
  2002
    Supplemental Stock Plan
    Deferred
    Stock Unit Programs
    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Beneficial
    Ownership of Endocare Stock
    
    each stockholder known to Endocare to own beneficially more than
    5% of Endocares common stock;
    each of Endocares directors;
    each of Endocares executive officers, including each of
    the Named Executive Officers listed in the 2008 Summary
    Compensation Table included in this proxy
    statement; and
    all of Endocares current directors and executive officers
    as a group. 65




---



##### Table of Contents



c/o Endocare,
  Amount and Natureof Beneficial


Percentage ofName and Address

Ownership(1)


TotalDIRECTORS AND EXECUTIVE OFFICERSJohn R. Daniels, M.D.(2)


103,563



*David L. Goldsmith(3)


24,334



*Eric S. Kentor(4)


28,000



*Terrence A. Noonan(5)


66,668



*Thomas R. Testman(6)


33,335



*Michael R. Rodriguez(7)


128,439



*Clint B. Davis(8)


110,513



*All current directors and executive officers as a group
    (7 persons)(9)


494,852



4.2
%FORMER EXECUTIVE OFFICERSCraig T. Davenport(10)


83,526



3.7
%STOCKHOLDERS OWNING MORE THAN 5% OF ENDOCARES STOCKFrazier Healthcare V, L.P.(11)
    Two Union Square, 601 Union Street, Suite 3200
    Seattle, Washington 98101


1,721,915



14.6
%State of Wisconsin Investment Board(12)
    P.O. Box 7842
    Madison, Wisconsin 53707


1,101,832



9.3
%Black River Asset Management LLC and affiliates(13)
    12700 Whitewater Drive
    Minnetonka, Minnesota 55343


983,937



8.3
%Goldman Capital Management Inc.(14)
    320 Park Avenue
    New York, New York 10022


773,920



6.6
%     *
    
    Represents beneficial ownership of less than 1% of the class of
    securities.(1)
    
    As of March 11, 2009, there were 11,811,451 shares of
    Endocares common stock outstanding.(2)
    
    Consists of 41,101 outstanding shares, 26,668 shares
    subject to options that are exercisable within 60 days
    after March 11, 2009 and 26,592 shares underlying
    currently exercisable warrants. 36,101 of the outstanding shares
    and all of the warrants are held by Dr. Daniels and his
    wife AnnaMarie Daniels, as trustees of the Daniels Family
    Trust UTA 1993. 5,000 of the outstanding shares are held by
    Dr. Daniels and Dorothy A. Trulsen, as trustees of the
    Dorothy A. Trulsen Trust U/A 9/4/94.(3)
    
    Includes 500 shares held by Mr. Goldsmith, as trustee
    of the Leah Goldsmith Trust dated January 24, 1998,
    250 shares held by Mr. Goldsmith, as trustee of the
    Aaron Goldsmith Trust, dated January 24, 1998, and 66




---



##### Table of Contents



250 shares held by Aaron Goldsmith,
    Mr. Goldsmiths son. Also includes 23,334 shares
    subject to options that are exercisable within 60 days
    after March 11, 2009.(4)
    
    Consists of 4,666 outstanding shares and 23,334 shares
    subject to options that are exercisable within 60 days
    after March 11, 2009. 666 of the outstanding shares are
    held by Mr. Kentor and his wife Adrienne T. Kentor, as
    trustees of the Kentor Trust, dated September 18, 2002.(5)
    
    Consists of 66,668 shares subject to options that are
    exercisable within 60 days after March 11, 2009.(6)
    
    Consists of (i) 5,000 outstanding shares held by
    Mr. Testman and his wife Jacqueline F. Testman, as trustees
    of the Testman Trust and (ii) 28,335 shares subject to
    options that are exercisable within 60 days after
    March 11, 2009.(7)
    
    Consists of (i) 694 outstanding shares held by The Michael
    R. and Helen L. Rodriguez Family Trust dated November 10,
    1999 and (ii) 104,167 shares subject to options that
    are exercisable within 60 days after March 11, 2009.(8)
    
    Consists of (i) 4,728 outstanding shares and
    (ii) 64,236 shares subject to options that are
    exercisable within 60 days after March 11, 2009.(9)
    
    Consists of (i) 57,189 outstanding shares,
    (ii) 336,742 shares subject to options exercisable
    within 60 days after March 11, 2009 and
    (iii) 26,592 shares underlying currently exercisable
    warrants.(10)
    
    Includes 67,131 outstanding shares and 16,395 shares
    underlying currently exercisable warrants.(11)
    
    The information is based on a Schedule 13D amendment filed
    with the SEC on November 14, 2008. The voting and
    disposition of the shares held by Frazier Healthcare V,
    L.P. is determined by FHM V, LLC, which is the general
    partner of FHM V, L.P., which is the general partner of
    Frazier Healthcare V, L.P. Alan Frazier, Nader Naini,
    Trevor Moody, Nathan Every, Patrick Heron, James Topper and
    Thomas Hodge are the members of FHM V, LLC and, therefore,
    share dispositive and voting power over the shares held by
    Frazier Healthcare V, L.P.(12)
    
    The information is based on a Schedule 13G filed with the
    SEC on January 30, 2009. The Schedule 13G indicates
    that the State of Wisconsin Investment Board has sole
    dispositive and voting power over all 1,101,832 shares.(13)
    
    The information is based on a Schedule 13G/A filed with the
    SEC on February 22, 2008. The Schedule 13G/A indicates
    that (i) Black River Asset Management LLC has dispositive
    and voting power over all 983,937 shares, and (ii) of
    these shares, 819,105 shares are owned by Black River
    Long/Short Fund Ltd. and the balance are owned by Black
    River Long/Short Opportunity Fund LLC.(14)
    
    The information is as of January 6, 2009 and is based on a
    Schedule 13G filed with the SEC on January 7, 2009.
    The Schedule 13G indicates that Goldman Capital Management
    Inc. has sole voting power over all 773,920 shares.  Equity
    Compensation Plan Information
    A


B


CRemaining AvailableNumber of





for Future IssuanceSecurities to be





Under EquityIssued Upon


Weighted Average


Compensation PlansExercise of


Exercise Price of


(ExcludingOutstanding


Outstanding


SecuritiesOptions, Warrants


Options, Warrants


Reflected in ColumnPlan Category

and Rights


and Rights


A)Equity Compensation Plans Approved by Security Holders


1,693,959
(1)

$
11.56
(3)


702,548
(5)Equity Compensation Plans not Approved by Security Holders


291,010
(2)

$
34.50
(4)


840,311
(6)Total


1,984,969


$
12.35
(3)(4)


1,542,859  67




---



##### Table of Contents



(1)
    
    Consists of 425,583 shares to be issued upon the exercise
    of options outstanding under the 1995 Stock Plan,
    21,668 shares to be issued upon the exercise of options
    outstanding under the 1995 Director Option Plan,
    859,945 shares to be issued upon the exercise of options
    outstanding under the 2004 Stock Incentive Plan and
    386,763 shares to be issued upon the vesting of RSUs
    outstanding under the 2004 Stock Incentive Plan.(2)
    
    Consists of 46,666 shares to be issued upon the exercise of
    options outstanding under the 2002 Supplemental Stock Plan, an
    aggregate of 78,363 DSUs held by employees under our Employee
    DSU Program and an aggregate of 165,981 DSUs held by
    non-employee directors under our Non-Employee Director DSU
    Program.(3)
    
    The RSUs referred to above in footnote (1) are disregarded
    for purposes of calculating the weighted average exercise price
    because the RSUs do not have any exercise price.(4)
    
    The DSUs referred to above in footnote (2) are disregarded
    for purposes of calculating the weighted average exercise price
    because the DSUs do not have any exercise price.(5)
    
    Consists of shares available for future issuance under the 2004
    Stock Incentive Plan. The number of shares of common stock
    available for issuance under the 2004 Stock Incentive Plan
    automatically increases on the first trading day of each
    calendar year by an amount equal to 3% of the total number of
    shares of common stock outstanding on the last trading day of
    the immediately preceding calendar year, but in no event will
    any such annual increase exceed 333,333 shares of common
    stock.(6)
    
    Consists of 606,292 shares available for future issuance
    under the Employee DSU Program and 234,019 shares available
    for future issuance under the Non-Employee Director DSU Program.    Changes
    in Control
    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence        
    the aggregate amount involved will or may be expected to exceed
    $100,000 in any calendar year;
    Endocare is a participant; and
    any related party (including an executive officer, director or
    nominee for election as a director of Endocare, a greater than
    five percent beneficial owner of Endocare or an immediate family
    member of any of the foregoing) has or will have a direct or
    indirect interest, other than solely as a result of being a
    director or less than 10 percent beneficial owner of
    another entity.   68




---



##### Table of Contents



Regulation S-K
    Item 14.
    Principal
    Accountant Fees and Services    2008


2007Audit Fees, including our annual audits, review of our quarterly
    reports on
    Form 10-Q,
    audit of internal controls over financial reporting and filings
    with the SEC

$
763,942


$
651,300Audit-Related Fees

$
110,000
(1)


Tax Fees






All Other Fees

$

(2)

$
1,500
(2)Totals

$
873,942


$
652,800     (1)
    
    Consists of tax and financial due diligence related to the Galil
    Merger.(2)
    
    Consists of subscription fee for use of EY Online, an online
    accounting reference service provided by Ernst & Young
    LLP.   69




---



##### 



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules (a)(1) Financial Statements:  Form 10-K
   
 PageConsolidated Financial Statements of the Company:Report of Independent Registered Public
    Accounting Firm


F-1Consolidated Statements of Operations for the
    Years Ended December 31, 2006, 2007 and 2008


F-2Consolidated Balance Sheets as of
    December 31, 2007 and 2008


F-3Consolidated Statements of Stockholders
    Equity for the Years Ended December 31, 2006, 2007 and
    2008


F-4Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2006, 2007 and 2008


F-5Notes to the Consolidated Financial Statements


F-6 to F-37    (2)
    Financial
    Statement Schedules:  page F-38.
  (3)
    Exhibits:  Form 10-K Form 10-K,
  Supplemental
    Information
  Form 10-K. Form 10-K,
 70




---



##### Table of Contents



SIGNATURES    Endocare, Inc.Date: March 30, 2009

By: /s/  Michael
    R. RodriguezMichael
    R. RodriguezSenior Vice President, Finance
    and Chief Financial Officer   POWER OF
    ATTORNEY
  Form 10-K,
    Signature

Title

Date/s/  Michael
    R. RodriguezMichael
    R. Rodriguez

Senior Vice President, Finance and Chief Financial Officer
    (co-principal executive officer and principal financial and
    accounting officer)

March 30, 2009/s/  Clint
    B. DavisClint
    B. Davis

Senior Vice President, Legal Affairs, General Counsel and
    Secretary (co-principal executive officer)

March 30, 2009/s/  John
    R. Daniels, M.D.John
    R. Daniels, M.D.

Director

March 30, 2009/s/  David
    L. GoldsmithDavid
    L. Goldsmith

Director and Interim Chairman of the Board

March 30, 2009/s/  Eric
    S. KentorEric
    S. Kentor

Director

March 30, 2009/s/  Terrence
    A. NoonanTerrence
    A. Noonan

Director

March 30, 2009/s/  Thomas
    R. TestmanThomas
    R. Testman

Director

March 30, 2009  71




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM             No. 00-19-02, Accounting for Registration Payment Arrangements,
    
    F-1




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Years Ended December 312006


2007


2008(In thousands, except per share data)Product sales

$
15,044


$
22,730


$
24,375Service revenues


12,298



6,418



6,693Other


648



539



49427,990



29,687



31,562Costs and expenses:Cost of revenues


12,343



9,780



9,935Research and development


2,781



2,555



2,346Selling and marketing


15,195



14,855



14,619General and administrative


13,107



12,506



13,078Gain on recovery of note receivable










(750
)Investment impairment










918Litigation settlement, net of related legal expenses






(677
)


Total costs and expenses


43,426



39,019



40,146Loss from operations


(15,436
)


(9,332
)


(8,584
)Interest income, net


452



391



168Interest expense related to common stock warrants


3,716







Loss from continuing operations before taxes


(11,268
)


(8,941
)


(8,416
)Tax benefit on continuing operations


192







Loss from continuing operations


(11,076
)


(8,941
)


(8,416
)Income from discontinued operations, net of taxes


311







Net loss

$
(10,765
)

$
(8,941
)

$
(8,416
)Net (loss) income per share of common stock  basic
    and dilutedContinuing operations

$
(1.10
)

$
(0.80
)

$
(0.71
)Discontinued operations

$
0.03


$



$
Weighted-average shares of common stock outstanding


10,084



11,122



11,902    F-2




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  CONSOLIDATED
    BALANCE SHEETS
  December 312007


2008(In thousands, except share and per share data)ASSETSCurrent assets:Cash and cash equivalents

$
7,712


$
2,685Accounts receivable less allowances for doubtful accounts and
    sales returns of $90 and $146 at December 31, 2007 and
    2008, respectively


3,530



5,076Inventories, net


3,022



2,559Prepaid expenses and other current assets


2,081



518Total current assets


16,345



10,838Property and equipment, net


850



628Intangibles, net


3,077



2,576Investments and other assets


989



75Total assets

$
21,261


$
14,117LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
2,194


$
3,638Accrued compensation


3,895



1,955Other accrued liabilities


3,034



3,007Loan payable


880



1,880Obligations under capital lease, current portion


28



26Total current liabilities


10,031



10,506Deferred compensation


227



77Obligations under capital lease  less current portion


84



62Stockholders equity:Preferred stock, $0.001 par value; 1,000,000 shares
    authorized; none issued and outstanding






Common stock, $0.001 par value; 50,000,000 shares
    authorized; 11,761,562 and 11,811,451 issued and outstanding at
    December 31, 2007 and 2008, respectively


12



12Additional paid-in capital


200,663



201,632Accumulated deficit


(189,756
)


(198,172
)Total stockholders equity


10,919



3,472Total liabilities and stockholders equity

$
21,261


$
14,117    F-3




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
  TotalCommon Stock


Additional


Accumulated


StockholdersShares


Amount


Paid-In Capital


Deficit


Equity(In thousands)Balance as of December 31, 2005


10,029


$
10


$
178,497


$
(165,677
)

$
12,830Net loss and comprehensive loss














(10,765
)


(10,765
)Stock options exercised


29







108







108Stock-based compensation expense










2,797







2,797Sale of common stock


168







(92
)






(92
)Balance as of December 31, 2006


10,226


$
10


$
181,310


$
(176,442
)

$
4,878Net loss and comprehensive loss














(8,941
)


(8,941
)Stock options exercised


167







1,125







1,125Stock-based compensation expense










3,950







3,950Sale of common stock


1,369



2



8,598







8,600Reclassification of common stock warrants to equity










5,680



(4,373
)


1,307Balance as of December 31, 2007


11,762


$
12


$
200,663


$
(189,756
)

$
10,919Net loss and comprehensive loss














(8,416
)


(8,416
)Stock-based compensation expense










1,185







1,185Issuance of shares, net of shares withheld for payroll tax on
    stock issuance


51







(202
)






(202
)Shares cancelled


(2
)






(14
)






(14
)Balance as of December 31, 2008


11,811


$
12


$
201,632


$
(198,172
)

$
3,472    F-4




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  For the Years Ended December 31,2006


2007


2008(In thousands)Cash flows from operating activities:Net loss

$
(10,765
)

$
(8,941
)

$
(8,416
)Adjustments to reconcile net loss to net cash used in operating
    activities:Gain on recovery of note receivable










(750
)Inventory reserve


197



(8
)


330Investment impairment










918Depreciation and amortization


1,576



1,126



995Reserve for uncollectible notes


695







Gain on divestitures, net


(524
)






Stock-based compensation


2,845



3,901



1,185Loss on sale of placement units and other fixed assets


47



52



54Extinguishment of payroll tax liabilities


(891
)


(121
)


Interest expense on common stock warrants


(3,716
)






Changes in operating assets and liabilities, net of effects from
    divestitures:Accounts receivable


(407
)


632



(1,546
)Inventories


(85
)


(985
)


(100
)Prepaid expenses and other current assets


(83
)


291



(42
)Accounts payable


(1,409
)


(1,199
)


1,444Accrued compensation


281



1,217



(2,090
)Other accrued liabilities


(1,364
)


(560
)


(41
)Net cash used in operating activities


(13,603
)


(4,595
)


(8,059
)Cash flows from investing activities:Collection of notes receivable










2,351Purchases of property and equipment


(158
)


(109
)


(93
)Proceeds from divestitures


7,480







Net cash provided by (used in) investing activities


7,322



(109
)


2,258Cash flows from financing activities:Payments under capital lease obligation










(24
)Stock options and warrants exercised


108



1,125



Borrowings on line of credit


250



13,450



1,000Payments on line of credit


(250
)


(12,570
)


Payroll tax on issuance of restricted stock










(202
)Proceeds from sale of stock and warrants, net


(92
)


8,600



Net cash provided by financing activities


16



10,605



774Net increase (decrease) in cash and cash equivalents


(6,265
)


5,901



(5,027
)Cash and cash equivalents, beginning of year


8,108



1,811



7,712Less: Cash of discontinued operations


(32
)






Cash and cash equivalents, end of year

$
1,811


$
7,712


$
2,685Non cash activities:Transfer of inventory to property and equipment for placement at
    customer sites

$
587


$
334


$
350Transfer of Cryocare Surgical Systems from property and
    equipment to inventory for sale


470



103



117Capital lease obligation






112



Adoption of FSP EITF No 00-19-2Increase in additional paid-in capital






5,680



Reduction of retained earnings






(4,373
)


Reduction of common stock warrant liability






(1,307
)


Other supplemental information:Interest paid

$
19


$
151


$
79Income taxes paid

$
55


$
69


$
    F-5




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Organization
    and Operations of the Company    Dispositions
    and Discontinued Operations
    Proposed
    Merger and Financing
       F-6




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Business Combination
    2.
    Recent
    Operating Results and Liquidity   F-7




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Commitments
    and Contingencies,
    Business
    Combinations
     F-8




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          3.
    Summary
    of Significant Accounting Policies  Principles
    of Consolidation
    Comprehensive
    Income
  Reporting Comprehensive Income
  Use of
    Estimates
   F-9




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Revenue
    Recognition
  set-up,
      Year Ended December 31,2006


2007


2008(In thousands)Revenues:Product sales:Cryoablation disposable products

$
13,948


$
21,157


$
22,864Cryocare Surgical Systems


1,096



1,573



1,511$
15,044


$
22,730


$
24,375Cryoablation procedure fees

$
12,298


$
6,418


$
6,693Cardiac royalties


604



386



511Other


44



153



(17
)$
27,990


$
29,687


$
31,562Cost of revenues:Cryoablation disposable products and procedure fees

$
11,541


$
9,006


$
9,408Cryocare Surgical Systems


802



774



527$
12,343


$
9,780


$
9,935    F-10




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. 00-21, Revenue Arrangements with Multiple Deliverables,
      Inventories
  work-in-process first-in,
    December 31,2007


2008(In thousands)Raw materials

$
2,331


$
1,831Work in process


227



119Finished goods


958



1,096Total inventories


3,516



3,046Less inventory reserve


(494
)


(487
)Inventories, net

$
3,022


$
2,559  F-11




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Property
    and Equipment
      December 31,2007


2008(In thousands)Equipment and computers

$
1,899


$
1,818Cryoablation systems placed at customer sites


5,169



5,203Furniture and fixtures


1,040



1,059Leasehold improvements


321



321Total property and equipment, at cost


8,429



8,401Accumulated depreciation and amortization


(7,579
)


(7,773
)Property and equipment, net

$
850


$
628     Long-Lived
    Assets, Goodwill and Intangible Assets Subject to
    Amortization
  Goodwill and other Intangible Assets Impairment of Goodwill and
    Other Intangible Assets.
    Trade names (discontinued operations)

15 yearsDomain names

5 yearsCovenants not to compete

3 to 5 yearsDeveloped technology (discontinued operations)

15 yearsPatents

3 to 15 years    F-12




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounting for the
    Impairment or Disposal of Long-Lived Assets,
    2009


5012010


5012011


5012012


5012013


302Thereafter


270$
2,576       December 31,2007


2008(In thousands)Domain name

$
435


$
435Covenant not to compete


352



352Patents


6,205



6,205Total intangibles


6,992



6,992Accumulated amortization


(3,915
)


(4,416
)Intangibles, net

$
3,077


$
2,576   Investments
   F-13




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Collaborative
    and Other Agreements,
  Product
    Warranties
    Research
    and Development
    Advertising
    Shipping
    and Handling Costs
    Cash and
    Cash Equivalents
    Concentrations
    of Credit Risk
   F-14




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Dispositions and Discontinued
    Operations, Related Party Transactions
  Fair
    Value of Financial Instruments
  Collaborative and
    Other Agreements. Fair Value
    Measurements
  Risks and
    Uncertainties
   F-15




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Off-Balance
    Sheet Financings and Liabilities
    Other
    Accrued Liabilities
    Capital
    Stock and Earnings Per Share
    Taxes
    Accounting for
    Uncertainty in Income Taxes, an interpretation of
    SFAS No. 109, Accounting for Income Taxes Income Taxes Accounting for Contingencies.
    Stock-Based
    Compensation
   F-16




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Share-Based Payment Equity
    Incentive Plans, catch-up
  Share-Based Payment.
    Form 10-Q,
   F-17




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Year Ended December 31,2006


2007


2008(In thousands)Cost of revenues

$
56


$
86


$
48Research and development


107



94



25Selling and marketing


630



702



506General and administrative


2,052



3,019



606Total

$
2,845


$
3,901


$
1,185         4.
    Recent
    Accounting Pronouncements  No. 07-1, Accounting for Collaborative Arrangements. No. 07-1
 F-18




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  No. 07-1 No. 07-1
  Business Combinations Accounting and Reporting of Noncontrolling Interests in
    Consolidated Financial Statements  an amendment of
    ARB No. 51.
  FAS No. 142-3, Goodwill and Other
    Intangible Assets Business
    Combinations FAS No. 142-3
    5.
    Impairment
    of Goodwill and Other Intangible Assets  Goodwill and Other Intangible
    Assets,
 F-19




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      6.
    Private
    Placement of Common Stock and Warrants  May 2007
    Private Placement
    lock-up lock-up
  lock-up
  Fusion
    Capital Equity Purchase Agreement
      March
    2005 Private Placement
   F-20




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      30-day
  Form S-2 Form S-2 Form S-3, Form S-1, Form S-3,
  S-2
    No. 00-19, Accounting for Derivative Financial Instruments Indexed to,
    and Potentially Settled in, a Companys Own Stock
 F-21




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. 00-19-2, Accounting for Registration Payment Arrangements No. 00-19-2 Accounting for
    Contingencies. No. 00-19-2
  7.
    Dispositions
    and Discontinued Operations  Sale of
    Timm Medical  2006
  Accounting for the Impairment or Disposal of Long-Lived
    Assets,
     F-22




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Assets:Cash, inventories and other current assets

$
1,041Property and equipment, net


71Goodwill, net


4,552Intangibles, net


3,680Other assets


65Total assets

$
9,409Liabilities:Accounts payable and other current liabilities

$
502Other accrued liabilities


486Total liabilities


988Net assets

$
8,421     Cryoablation
    Products for Cardiac Applications  2003
  tm 12-year tm
    Urinary
    Incontinence and Urodynamics  2003
   F-23




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      8.
    Stock-Based
    Compensation      Year Ended December 31, 2008Weighted-AverageNumber of


Exercise PriceOptions


Per OptionOutstanding, beginning of year


1,757,962


$
12.75Granted


78,407



3.22Cancelled/forfeited


(480,886
)


12.29Exercised






Outstanding, end of year


1,355,483



12.36Exercisable, end of year


1,148,015



13.38       2006


2007


2008Stock volatility


0.70



0.67



0.70Risk-free interest rate


4.6
%


4.7
%


2.80
%Expected life in years


6.25 years



6.25 years



6.25 yearsStock dividend yield










  F-24




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock
    Units
        9.
    Equity
    Incentive Plans  Share-based
    payments
    2004 Stock Incentive Plan.
  1995 Stock Plan.
 F-25




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    1995 Director Option Plan. 10-year
  2002 Supplemental Stock Plan.
  Employee Deferred Stock Unit Program. paid-in-capital. 10-year
  Non-employee Directors Deferred Stock Unit
    Program.
 F-26




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  10-year
    Option Arrangements Outside of Plans.
      Stockholder
    Rights Plan
   F-27




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    10.
    Income
    Taxes  Accounting for
    Uncertainty in Income Taxes, an interpretation of
    SFAS No. 109, Accounting for Income Taxes
    Years Ended December 31,2006


2007


2008(In thousands)Federal

$
(163
)

$



$
State


(29
)






Total

$
(192
)

$



$
       2007


2008(In thousands)Deferred tax assets (liabilities):Depreciation and amortization

$
454


$
500Nondeductible reserves and accruals


3,077



2,015Stock-based compensation


1,999



2,065Other


91



925,621



4,672Valuation allowance


(5,621
)


(4,672
)Net deferred tax assets

$



$
  F-28




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ended December 31,2006


2007


2008(In thousands)Computed expected tax benefit

$
(3,831
)

$
(3,042
)

$
(2,861
)Increase in valuation allowance


4,296



2,678



1,602State taxes


(19
)


1



0Warrants


(1,264
)






Merger expenses










833Stock-based compensation


284



292



348Other nondeductible expenses


342



71



78Actual tax expense (benefit)

$
(192
)

$



$
         11.
    Collaborative
    and Other Agreements  Minority
    Investment in Sanarus Medical, Inc.
   F-29




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    start-up Disclosures About Fair Value of Financial Instruments
  CryoDynamics,
    LLC  Research & Development
    Agreement
          Patent,
    Licensing, Royalty and Distribution Agreements
   F-30




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    12.
    Commitments
    and Contingencies  Leases
    Capital


OperatingLease


LeasesYear ending December 31, 2009

$
34


$
6122010


34



1682011


34



62012






2Thereafter






Total minimum lease payments

$
102


$
788Amount representing interest


14Present value of minimum lease payments

$
88     Employment
    Agreements
      Indemnification
    Agreements
   F-31




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Employee
    Benefit Plans
    Legal
    Matters
    Governmental
    Legal Proceedings
  Form 8-K
       F-32




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Shareholder
    Class Action and Derivative Lawsuits
  class-action
    Lawsuit
    with KPMG LLP
      Other
    Litigation
     F-33




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  13.
    Fair
    Value Measurements  Fair
    Value Measurements No. 157-2, Effective Date of FASB Statement No. 157,
    Collaborative and
    Other Agreements,
    The Fair Value Option for Financial
    Assets and Financial Liabilities
  14.
    Bank Line
    of Credit  Recent
    Operating Results and Liquidity,
 F-34




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
             F-35




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      15.
    Related
    Party Transactions      16.
    Quarterly
    Results of Operations (Unaudited)    Quarter Ended


Quarter Ended


Quarter Ended


Quarter EndedMarch 31,


June 30,


September 30,


December 31,2008


2008


2008


2008Revenues

$
8,143


$
7,930



7,599


$
7,890Cost of revenues

$
2,505


$
2,347


$
2,275


$
2,808Net loss(a)

$
(1,690
)

$
(2,032
)

$
(921
)

$
(3,773
)Net loss per share of common stock  basic and diluted

$
(0.14
)

$
(0.17
)

$
(0.08
)

$
(0.31
)Weighted average shares of common stock outstanding
     basic and diluted


11,785



11,802



11,972



12,044   F-36




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Quarter Ended


Quarter Ended


Quarter Ended


Quarter EndedMarch 31,


June 30,


September 30,


December 31,2007


2007


2007


2007Revenues

$
7,546


$
7,901


$
7,326


$
6,914Cost of revenues

$
2,622


$
2,713


$
2,171


$
2,274Net loss(a)

$
(3,259
)

$
(2,264
)

$
(984
)

$
(2,435
)Net loss per share of common stock  basic and diluted

$
(0.32
)

$
(0.21
)

$
(0.08
)

$
(0.21
)Weighted average shares of common stock outstanding 
    basic and diluted


10,313



10,916



11,595



11,640     (a)
    
    Net loss in the fourth quarter of 2008 includes a
    $0.9 million impairment charge in the fourth quarter to
    fully reserve for our investment in a privately held medical
    device company. See Note 11 
    Collaborative and Other Agreementsfor
    further discussion.     F-37




---



##### Table of Contents



ENDOCARE,
    INC. AND SUBSIDIARY
  SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS
  Balance at the


Additions





Balance atBeginning of


Charges to








the End ofthe Period


Operations


Other


Deductions


the Period(In thousands)2006Allowance for Doubtful Accounts and Sales Returns

$
70


$
36


$



$
(22
)

$
842007Allowance for Doubtful Accounts and Sales Returns

$
84


$
8


$



$
(2
)

$
902008Allowance for Doubtful Accounts and Sales Returns

$
90


$
76


$



$
(20
)

$
146      F-38




---



##### Table of Contents



EXHIBIT INDEX
  Form 10-K, Form 10-K www.endocare.com
  2
.1(1)

Stock Purchase Agreement, dated as of January 13, 2006, by and
    among Plethora Solutions Holdings plc, Endocare and Timm Medical
    Technologies, Inc. The schedules and other attachments to this
    exhibit were omitted. Endocare agrees to furnish a copy of any
    omitted schedules or attachments to the Securities and Exchange
    Commission upon request.2
.2(2)

$1,425,000 Secured Convertible Promissory Note, dated as of
    February 10, 2006, from Plethora Solutions Holdings plc to
    Endocare.2
.3(3)

Agreement and Plan of Merger, dated as of November 10, 2008, by
    and among Endocare, Orange Acquisitions Ltd. and Galil Medical
    Ltd.3
.1(4)

Restated Certificate of Incorporation.3
.2(4)

Certificate of Amendment of Restated Certificate of
    Incorporation of Endocare.3
.3(5)

Amended and Restated Bylaws of Endocare.3
.4(6)

Amendment No. 1 to Amended and Restated Bylaws of Endocare.3
.2(4)

Certificate of Designation of Series A Junior Participating
    Preferred Stock of Endocare.4
.1(7)

Form of Stock Certificate.4
.2(8)

Form of Series A Warrant.4
.3(8)

Form of Series B Warrant.4
.4(9)

Rights Agreement, dated as of March 31, 1999, between Endocare
    and U.S. Stock Transfer Corporation, which includes the form of
    Certificate of Designation for the Series A Junior Participating
    Preferred Stock as Exhibit A, the form of Rights Certificate as
    Exhibit B and the Summary of Rights to Purchase Series A
    Preferred Shares as Exhibit C.4
.5(10)

Amendment No. 1 to Rights Agreement, dated as of September 24,
    2005, between Endocare and U.S. Stock Transfer Corporation.10
.1(11)

Lease Agreement, dated as of November 26, 2001, by and between
    Endocare and The Irvine Company.10
.2(11)

Form of Indemnification Agreement by and between Endocare and
    its directors.10
.3(11)

Form of Indemnification Agreement by and between Endocare and
    its executive officers.10
.4(12)

1995 Director Option Plan (as amended and restated through
    March 2, 1999).10
.5(13)

1995 Stock Plan (as amended and restated through December 30,
    2003).




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##### Table of Contents



10
.6(14)

Employment Agreement, dated as of December 15, 2003, by and
    between Endocare and Craig T. Davenport.10
.7(15)

Employment Agreement, dated as of August 11, 2004, by and
    between Endocare and Michael R. Rodriguez.10
.8(16)

2004 Stock Incentive Plan.10
.9(17)

2004 Non-Employee Director Option Program under 2004 Stock
    Incentive Plan.10
.10(17)

Form of Award Agreement Under 2004 Stock Incentive Plan.10
.11(18)

Confidential Settlement Agreement and Release, dated as of
    February 18, 2005, by and between Endocare and Great American
    E&S Insurance Company.10
.12(8)

Purchase Agreement, dated as of March 10, 2005, by and between
    Endocare and the Investors (as defined therein).10
.13(8)

Registration Rights Agreement, dated as of March 10, 2005, by
    and between Endocare and the Investors (as defined therein).10
.14(19)

First Amendment to Employment Agreement with Craig T. Davenport,
    dated as of April 28, 2005.10
.15(2)

Loan and Security Agreement, dated as of October 26, 2005, by
    and among Endocare, Timm Medical Technologies, Inc. and
    Silicon Valley Bank.10
.16(2)

Commercialization Agreement, dated as of November 8, 2005, by
    and between Endocare and CryoDynamics, LLC.10
.17(20)

Employment Agreement, dated as of January 17, 2006, by and
    between Endocare and Clint B. Davis.10
.18(21)

Amendment to Loan Documents, dated as of April 24, 2006, by and
    between Endocare and Silicon Valley Bank.10
.19(22)

Amendment to Loan Documents, dated as of February 10, 2006,
    between Endocare, Timm Medical Technologies, Inc. and Silicon
    Valley Bank.10
.20(23)

Employee Deferred Stock Unit Program, effective as of May 18,
    2006.10
.21(23)

Non-Employee Director Deferred Stock Unit Program, effective as
    of May 18, 2006.10
.22(24)

First Amendment to Lease, dated as of May 19, 2006, between
    Endocare and The Irvine Company.10
.23(24)*

Customer Quote, dated as of January 9, 2006, to Advanced Medical
    Partners, Inc.10
.24(24)*

Amended and Restated Endocare Service Agreement, dated as of
    January 9, 2006, between Endocare and Advanced Medical Partners,
    Inc.10
.25(25)

Common Stock Purchase Agreement, dated as of October 25, 2006,
    by and between Endocare and Fusion Capital Fund II, LLC.10
.26(25)

Registration Rights Agreement, dated as of October 25, 2006, by
    and between Endocare and Fusion Capital Fund II, LLC.10
.27(26)

Non-Prosecution Agreement, dated as of July 18, 2006, by and
    between Endocare and the Department of Justice.10
.28(26)

Consent to Entry of Judgment, dated as of July 14, 2006, in
    favor of the Securities and Exchange Commission.10
.29(27)

Form of Retention Agreement.10
.30(28)

Amendment to Loan Documents, dated as of December 22, 2006, by
    and between Endocare, Inc. and Silicon Valley Bank.10
.31(29)

Standard Form of RSU Agreement under 2004 Stock Incentive Plan.10
.32(29)

Form of RSU Agreement used for Mr. Davenport under 2004 Stock
    Incentive Plan.10
.33(29)

Summary Description of 2007 MICP.




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##### Table of Contents



10
.34(30)

Amendment to Loan Documents, dated as of February 23, 2007, by
    and between Endocare and Silicon Valley Bank.10
.35(31)

Common Stock Subscription Agreement, dated as of May 24, 2007,
    by and between Endocare and Frazier Healthcare V, L.P.10
.36(31)

Registration Rights Agreement, dated as of May 25, 2007, by and
    between Endocare and Frazier Healthcare V, L.P.10
.37(32)

First Amendment to Employee Deferred Stock Unit Program, dated
    August 6, 2007.10
.38(32)

First Amendment to Non-Employee Director Deferred Stock Unit
    Program, dated August 6, 2007.10
.39(33)

Memorandum of Understanding, dated September 11, 2007, between
    Endocare and KPMG LLP.10
.40(34)

Description of Non-Employee Director Compensation, as amended on
    December 20, 2007.10
.41(34)

Non-Employee Director RSU Program.10
.42(34)

Form of RSU Agreement under Non-Employee Director RSU Program.10
.43(35)

Amendment to Loan Documents, dated as of February 8, 2008, by
    and between Endocare and Silicon Valley Bank.10
.44(36)

Third Amendment to Employment Agreement, dated February 28,
    2008, between Craig T. Davenport and Endocare.10
.45(36)

Summary Description of 2008 MICP.10
.46(3)

Stock Purchase Agreement, dated as of November 10, 2008, by and
    among Endocare, Inc. and the Purchasers set forth on the
    Signature Pages thereto.10
.47(3)

Form of Voting Agreement between Endocare and certain
    shareholders of Galil Medical Ltd.21
.1(37)

Subsidiaries of Endocare.23
.1

Consent of Ernst & Young LLP, Independent Registered Public
    Accounting Firm to Endocare.24
.1

Power of Attorney (included on the signature page to this Form
    10-K).31
.1

Certification under Section 302 of the
    Sarbanes-Oxley
    Act of 2002 for Clint B. Davis.31
.2

Certification under Section 302 of the
    Sarbanes-Oxley
    Act of 2002 for Michael R. Rodriguez.32
.1

Certification under Section 906 of the
    Sarbanes-Oxley
    Act of 2002 for Clint B. Davis.32
.2

Certification under Section 906 of the
    Sarbanes-Oxley
    Act of 2002 for Michael R. Rodriguez.     
    
    Management contract or compensatory plan or arrangement.*
    
    Certain confidential portions of this exhibit were omitted and
    provided separately to the SEC pursuant to a request for
    confidential treatment.(1)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on January 18, 2006.(2)
    
    Previously filed as an exhibit to Endocares Form 10-K
    filed on March 16, 2006.(3)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on November 12, 2008.(4)
    
    Previously filed as an exhibit to Endocares Registration
    Statement on Form S-3 filed on September 20, 2001.(5)
    
    Previously filed as an exhibit to Endocares Form 10-K
    filed on March 16, 2004.(6)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on March 5, 2008.(7)
    
    Previously filed as an exhibit to Endocares Form 10-K for
    the year ended December 31, 1995.(8)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on March 16, 2005.(9)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on June 3, 1999.(10)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on June 28, 2005.(11)
    
    Previously filed as an exhibit to Endocares Form 10-K
    filed on March 29, 2002.




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##### Table of Contents



(12)
    
    Previously filed as an exhibit to Endocares Registration
    Statement on Form S-8 filed on June 2, 1999.(13)
    
    Previously filed as an appendix to Endocares Definitive
    Proxy Statement filed on December 3, 2003.(14)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on December 16, 2003.(15)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on August 12, 2004.(16)
    
    Previously filed as an appendix to Endocares Definitive
    Proxy Statement filed on August 6, 2004.(17)
    
    Previously filed as an exhibit to Endocares Form 10-K
    filed on March 16, 2005.(18)
    
    Previously filed as an exhibit to Endocares Form 10-Q
    filed on May 10, 2005.(19)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on May 3, 2005.(20)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on January 12, 2006.(21)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on April 25, 2006.(22)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on May 10, 2006.(23)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on May 22, 2006.(24)
    
    Previously filed as an exhibit to Endocares Form 10-Q
    filed on August 8, 2006.(25)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on October 30, 2006.(26)
    
    Previously filed as an exhibit to Endocares Form 10-Q
    filed on November 9, 2006.(27)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on December 13, 2006.(28)
    
    Previously filed as an exhibit to Endocares Form 10-Q
    filed on December 22, 2006.(29)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on February 27, 2007.(30)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on February 28, 2007.(31)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on May 29, 2007.(32)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on August 8, 2007.(33)
    
    Previously filed as an exhibit to Endocares Form 10-Q
    filed on November 6, 2007.(34)
    
    Previously filed as an exhibit to Endocares Form 10-K
    filed on March 17, 2008.(35)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on February 11, 2008.(36)
    
    Previously filed as an exhibit to Endocares Form 8-K filed
    on March 5, 2008.(37)
    
    Not applicable because Endocare does not have any subsidiaries
    that constitute significant subsidiaries under Rule
    1-02(w) of Regulation S-X.