##### Table of Contents



UNITED STATESSECURITIES AND EXCHANGE COMMISSION
 Washington, DC. 20549
 FORM 10-Q
  þ
    
    Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
 for the Quarterly Period ended
March 31, 2010
 or
 o
    
    Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
 for the Transition Period from  to
 Commission File Number 0-19437
 SAFESTITCH MEDICAL, INC.
  Delaware
    
    11-2962080(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. employer identification no.)4400 Biscayne Blvd., Suite A-100, Miami, Florida
    
    33137(Address of principal executive offices)
    
    (Zip code)
 (305) 575-4600
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer   o
    
    Smaller reporting company
þ
 Yes o No þ




---



##### 



SAFESTITCH MEDICAL, INC.
(A Developmental Stage Company)
 TABLE OF CONTENTS FOR FORM 10-Q
 PART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS
    
    
    3Condensed Consolidated Balance Sheets as of March 31, 2010 (unaudited) and December 31, 2009
    
    
    3Unaudited Condensed Consolidated Statements of Operations for the Three Months ended March
31, 2010 and 2009, and for the period from September 15, 2005 (inception) to March 31, 2010
    
    
    4Condensed Consolidated Statements of Stockholders Equity (Deficit) for the period from
September 15, 2005 (inception) through March 31, 2010 (unaudited)
    
    
    5Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months ended March
31, 2010 and 2009, and for the period from September 15, 2005 (inception) to March 31, 2010
    
    
    6Notes to unaudited condensed consolidated financial statements
    
    
    7ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    15ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    17ITEM 4. CONTROLS AND PROCEDURES
    
    
    17PART II. OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS
    
    
    18ITEM 1A. RISK FACTORS
    
    
    18ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    18ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    18ITEM 4. (REMOVED AND RESERVED)
    
    
    18ITEM 5. OTHER INFORMATION
    
    
    18ITEM 6. EXHIBITS
    
    
    18SIGNATURES
    
    
    19Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



SAFESTITCH MEDICAL, INC.
 (A Developmental Stage Company)
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
  March 31,
    
    
    December 31,2010
    
    
    2009(Unaudited)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    2,193
    
    
    $
    871Other receivable  related-party
    
    
    39
    
    
    
    21Prepaid expenses
    
    
    153
    
    
    
    131Total Current Assets
    
    
    2,385
    
    
    
    1,023FIXED ASSETSProperty and equipment, net
    
    
    235
    
    
    
    147OTHER ASSETSSecurity deposits
    
    
    2
    
    
    
    2Deferred financing costs, net
    
    
    128
    
    
    
    255Total Other Assets
    
    
    130
    
    
    
    257TOTAL ASSETS
    
    $
    2,750
    
    
    $
    1,427LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable and accrued liabilities
    
    $
    219
    
    
    $
    93Notes payable
    
    
    28
    
    
    
    50Total Current Liabilities
    
    
    247
    
    
    
    143Stockholder loans (Note 5)
    
    
    
    
    
    
    Commitments and contingencies (Note 8)
    
    
    
    
    
    
    STOCKHOLDERS EQUITYPreferred stock, $0.01 par value per share, 25,000,000 shares authorized
10% Series A Cumulative Convertible Preferred Stock, 4,000,000
shares authorized, 4,000,000 and 2,000,000 shares issued and
outstanding, respectively; liquidation preference $4,184
    
    
    40
    
    
    
    20Common stock, $0.001 par value per share, 225,000,000 shares authorized,
17,962,718 shares issued and outstanding
    
    
    18
    
    
    
    18Additional paid-in capital
    
    
    15,078
    
    
    
    12,974Deficit accumulated during the development stage
    
    
    (12,633
    )
    
    
    (11,728
    )Total Stockholders Equity
    
    
    2,503
    
    
    
    1,284TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    2,750
    
    
    $
    1,427
   3




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##### Table of Contents



SAFESTITCH MEDICAL, INC.
 (A Developmental Stage Company)
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  September 15,2005Three Months Ended
    
    
    (Inception) toMarch 31,
    
    
    March 31,2010
    
    
    2009
    
    
    2010Revenues
    
    $
    
    
    
    $
    
    
    
    $
    Costs and expensesResearch and development
    
    
    350
    
    
    
    349
    
    
    
    7,193General and administrative
    
    
    428
    
    
    
    331
    
    
    
    4,500Total costs and expenses
    
    
    778
    
    
    
    680
    
    
    
    11,693Loss from operations
    
    
    (778
    )
    
    
    (680
    )
    
    
    (11,693
    )Other income and expenseOther income
    
    
    
    
    
    
    
    
    
    
    903Interest income
    
    
    
    
    
    
    
    
    
    
    77Amortization of debt issuance expense
    
    
    (127
    )
    
    
    (213
    )
    
    
    (1,856
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    (64
    )Total other income and expense
    
    
    (127
    )
    
    
    (213
    )
    
    
    (940
    )Loss before income tax
    
    
    (905
    )
    
    
    (893
    )
    
    
    (12,633
    )Provision for income tax
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (905
    )
    
    $
    (893
    )
    
    $
    (12,633
    )Loss attributable to common stockholders and loss per
common share:Net loss
    
    
    (905
    )
    
    
    
    
    
    
    (12,633
    )Deemed dividend  Series A Preferred Stock
    
    
    (500
    )
    
    
    
    
    
    
    (700
    )Dividends  Series A Preferred Stock
    
    
    (96
    )
    
    
    
    
    
    
    (184
    )Net loss attributable to common stockholders
    
    
    (1,501
    )
    
    
    (893
    )
    
    $
    (13,517
    )Weighted average shares outstanding, basic and diluted
    
    
    17,963
    
    
    
    17,963Net loss per basic and diluted share
    
    $
    (0.08
    )
    
    $
    (0.05
    )
   4




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##### Table of Contents



SAFESTITCH MEDICAL, INC.
 (A Developmental Stage Company)
 
 CONDENSED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)
 FOR THE PERIOD SEPTEMBER 15, 2005 (INCEPTION) THROUGH MARCH 31, 2010
  DeficitAccumulatedAdditional
    
    
    During thePreferred Stock
    
    
    Common Stock
    
    
    Paid-in
    
    
    DevelopmentShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Stage
    
    
    TotalInception  September 15, 2005
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Capital contributed
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (76
    )
    
    
    (76
    )Balance at December 31, 2005
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    1
    
    
    $
    (76
    )
    
    $
    (75
    )Capital contributed
    
    
    
    
    
    
    
    
    
    
    11,256
    
    
    
    11
    
    
    
    1,493
    
    
    
    
    
    
    
    1,504Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,060
    )
    
    
    (1,060
    )Balance at December 31, 2006
    
    
    
    
    
    $
    
    
    
    
    11,256
    
    
    $
    11
    
    
    $
    1,494
    
    
    $
    (1,136
    )
    
    $
    369Exercise of options (CTS)-September 23, 2007 at
$0.79 per share
    
    
    
    
    
    
    
    
    
    
    42
    
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    35Stock-based compensation-September 4, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    77
    
    
    
    
    
    
    
    77Issuance of shares in recapitalization  September
4, 2007 at $0.64 per share
    
    
    
    
    
    
    
    
    
    
    4,795
    
    
    
    5
    
    
    
    3,078
    
    
    
    
    
    
    
    3,083SafeStitch expenses associated with recapitalization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (156
    )
    
    
    
    
    
    
    (156
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    65
    
    
    
    
    
    
    
    65Warrants issued in connection with credit
facility-September 4, 2007 at $2.46 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,985
    
    
    
    
    
    
    
    1,985Rule 16 payment received
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,041
    )
    
    
    (3,041
    )Balance at December 31, 2007
    
    
    
    
    
    $
    
    
    
    
    16,093
    
    
    $
    16
    
    
    $
    6,582
    
    
    $
    (4,177
    )
    
    $
    2,421Issuance of common shares in private offering  May
2008 at $2.15 per share, net of offering costs
    
    
    
    
    
    
    
    
    
    
    1,862
    
    
    
    2
    
    
    
    3,986
    
    
    
    
    
    
    
    3,988Issuance of common shares as repayment of
stockholder note-December 30, 2008 at $1.22 per
share
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    10Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    239
    
    
    
    
    
    
    
    239Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,185
    )
    
    
    (5,185
    )Balance at December 31, 2008
    
    
    
    
    
    $
    
    
    
    
    17,963
    
    
    $
    18
    
    
    $
    10,817
    
    
    $
    (9,362
    )
    
    $
    1,473Issuance of Series A Preferred Stock in July 2009
at $1.00 per share
    
    
    2,000
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    1,962
    
    
    
    
    
    
    
    1,982Fair value of beneficial conversion feature of
Series A Preferred Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200
    
    
    
    
    
    
    
    200Deemed dividend to Series A Preferred Stockholders,
charged to additional paid-in capital in the
absence of retained earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (200
    )
    
    
    
    
    
    
    (200
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    195
    
    
    
    
    
    
    
    195Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,366
    )
    
    
    (2,366
    )Balance at December 31, 2009
    
    
    2,000
    
    
    $
    20
    
    
    
    17,963
    
    
    $
    18
    
    
    $
    12,974
    
    
    $
    (11,728
    )
    
    $
    1,284Issuance of Series A Preferred Stock in January
2010 at $1.00 per share
    
    
    2,000
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    1,978
    
    
    
    
    
    
    
    1,998Fair value of beneficial conversion feature of
Series A Preferred Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500
    
    
    
    
    
    
    
    500Deemed dividend to Series A Preferred Stockholders,
charged to additional paid-in capital in the
absence of retained earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (500
    )
    
    
    
    
    
    
    (500
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    126
    
    
    
    
    
    
    
    126Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (905
    )
    
    
    (905
    )Balance at March 31, 2010 (unaudited)
    
    
    4,000
    
    
    $
    40
    
    
    
    17,963
    
    
    $
    18
    
    
    $
    15,078
    
    
    $
    (12,633
    )
    
    $
    2,503
   5




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##### Table of Contents



SAFESTITCH MEDICAL, INC.
 (A Developmental Stage Company)
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  September 15,Three Months Ended
    
    
    2005 (Inception)March  31,
    
    
    to March 31,2010
    
    
    2009
    
    
    2010OPERATING ACTIVITIESNet loss
    
    $
    (905
    )
    
    $
    (893
    )
    
    $
    (12,633
    )Adjustments to reconcile net loss to net cash used in operating activities:Amortization of deferred finance costs
    
    
    127
    
    
    
    213
    
    
    
    1,856Stock-based compensation expense
    
    
    126
    
    
    
    36
    
    
    
    625Stock-based compensation expense related to Share Exchange
    
    
    
    
    
    
    
    
    
    
    77Depreciation and amortization
    
    
    11
    
    
    
    13
    
    
    
    126Gain on sale of TruePosition investment
    
    
    
    
    
    
    
    
    
    
    (903
    )Changes in operating assets and liabilitiesOther current assets
    
    
    (40
    )
    
    
    (6
    )
    
    
    (172
    )Other assets
    
    
    
    
    
    
    
    
    
    
    (2
    )Accounts payable and accrued liabilities
    
    
    126
    
    
    
    (3
    )
    
    
    (65
    )NET CASH USED IN OPERATING ACTIVITIES
    
    
    (555
    )
    
    
    (640
    )
    
    
    (11,091
    )INVESTING ACTIVITIESPurchase of equipment
    
    
    (99
    )
    
    
    (3
    )
    
    
    (361
    )Proceeds from sale of True Position investment
    
    
    
    
    
    
    
    
    
    
    903Payment received under Rule 16b
    
    
    
    
    
    
    
    
    
    
    4NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES
    
    
    (99
    )
    
    
    (3
    )
    
    
    546FINANCING ACTIVITIESNet cash provided in connection with the acquisition of SafeStitch LLC
    
    
    
    
    
    
    
    
    
    
    3,192Issuance of Common Stock, net of offering costs
    
    
    
    
    
    
    
    
    
    
    3,988Issuance of Preferred Stock, net of offering costs
    
    
    1,998
    
    
    
    
    
    
    
    3,980Capital contributions
    
    
    
    
    
    
    
    
    
    
    1,431Proceeds from notes payable
    
    
    
    
    
    
    
    
    
    
    71Repayment of notes payable
    
    
    (22
    )
    
    
    
    
    
    
    (43
    )Proceeds from stockholder loans
    
    
    
    
    
    
    300
    
    
    
    2,860Repayment of stockholder loans
    
    
    
    
    
    
    
    
    
    
    (2,776
    )Exercise of options
    
    
    
    
    
    
    
    
    
    
    35NET CASH PROVIDED BY FINANCING ACTIVITIES
    
    
    1,976
    
    
    
    300
    
    
    
    12,738NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    1,322
    
    
    
    (343
    )
    
    
    2,193CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    871
    
    
    
    561
    
    
    
    CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    2,193
    
    
    $
    218
    
    
    $
    2,193Supplemental disclosures:Cash paid for interest
    
    $
    
    
    
    $
    
    
    
    $
    64Non cash activities:Stockholder loans contributed to capital
    
    $
    
    
    
    $
    
    
    
    $
    84Warrants issued in connection with credit facility
    
    $
    
    
    
    $
    
    
    
    $
    1,985
   6




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##### Table of Contents



SAFESTITCH Medical, INC.
(A Developmental Stage Company)
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  BASIS OF PRESENTATION AND LIQUIDITY
      7




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##### Table of Contents



SAFESTITCH Medical, INC.
(A Developmental Stage Company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Consolidation.
 Use of estimates.
 Cash and cash equivalents.
 Property and equipment.
 Research and development.
 Patent costs.
 Stock-based compensation.
 Fair value of financial instruments.
 Long-lived assets.
 Income taxes.
 Comprehensive income (loss).
  8




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##### Table of Contents



SAFESTITCH Medical, INC.
(A Developmental Stage Company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 3  PROPERTY AND EQUIPMENT
  Estimated Useful Lives
    
    March  31, 2010
    
    
    December 31, 2009Machinery and equipment
    
    5 years
    
    $
    289,000
    
    
    $
    190,000Furniture and fixtures
    
    3-5 years
    
    
    35,000
    
    
    
    35,000Software
    
    3-5 years
    
    
    37,000
    
    
    
    37,000361,000
    
    
    
    262,000Accumulated depreciation and
amortization
    
    
    
    
    (126,000
    )
    
    
    (115,000
    )Property and equipment, net
    
    
    
    $
    235,000
    
    
    $
    147,000
  NOTE 4  STOCK-BASED COMPENSATION
    Three months ended
    
    Three months endedMarch 31, 2010
    
    March 31, 2009Expected volatility
    
    87.09% - 105.31%
    
    74.59% - 86.43%Expected dividend yield
    
    0.00%
    
    0.00%Risk-free interest rate
    
    1.89% - 3.11%
    
    1.39% - 1.79%Expected life
    
    4.0 - 7.0 years
    
    4.0 - 5.5 yearsForfeiture rate
    
    0% - 2.50%
    
    2.50%
  9




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##### Table of Contents



SAFESTITCH Medical, INC.
(A Developmental Stage Company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  WeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Term (Years)
    
    
    ValueOutstanding at December 31, 2009
    
    
    615,167
    
    
    $
    1.63
    
    
    
    5.98
    
    
    $
    162,540Granted
    
    
    559,000
    
    
    $
    1.20
    
    
    
    6.89Exercised
    
    
    
    
    
    
    Canceled or expired
    
    
    (17,000
    )
    
    $
    3.06Outstanding at March 31, 2010
    
    
    1,157,167
    
    
    $
    1.40
    
    
    
    6.38
    
    
    $
    89,625Exercisable at March 31, 2010
    
    
    404,500
    
    
    $
    1.73
    
    
    
    6.05
    
    
    $
    41,625Vested and expected to vest at
March 31, 2010
    
    
    1,116,402
    
    
    $
    1.41
    
    
    
    6.38
    
    
    $
    86,123
    NOTE 5  DEBT
  Credit Facility
  10




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##### Table of Contents



SAFESTITCH Medical, INC.
(A Developmental Stage Company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
   NOTE 6  CAPITAL TRANSACTIONS
 10.0% Series A Cumulative Convertible Preferred Stock. pari passu pari passu
   2009 Issuance of Series A Preferred Stock.
  11




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SAFESTITCH Medical, INC.
(A Developmental Stage Company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 2010 Issuance of Series A Preferred Stock.
    NOTE 7  BASIC AND DILUTED NET LOSS PER SHARE
   March 31, 2010
    
    
    March 31, 2009Stock options
    
    
    1,157,167
    
    
    
    615,167Stock warrants
    
    
    805,521
    
    
    
    805,521Series A Preferred Stock
    
    
    4,183,875
    
    
    
    Total
    
    
    6,146,563
    
    
    
    1,420,688
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SAFESTITCH Medical, INC.
(A Developmental Stage Company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 8  COMMITMENTS AND CONTINGENCIES
  TM
  NOTE 9  AGREEMENT WITH CREIGHTON UNIVERSITY
   NOTE 10  INCOME TAXES
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SAFESTITCH Medical, INC.
(A Developmental Stage Company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 11  CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
     NOTE 12  EMPLOYEE BENEFIT PLANS
  NOTE 13  RECENT ACCOUNTING PRONOUNCEMENTS
 Subsequent Events 
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 This Quarterly Report on Form 10-Q contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA), Section 27A of the
Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities
Exchange Act of 1934, as amended, (the Exchange Act), about our expectations, beliefs or
intentions regarding our product development and commercialization efforts, business, financial
condition, results of operations, strategies or prospects. You can identify forward-looking
statements by the fact that these statements do not relate strictly to historical or current
matters. Rather, forward-looking statements relate to anticipated or expected events, activities,
trends or results as of the date they are made. Because forward-looking statements relate to
matters that have not yet occurred, these statements are inherently subject to risks and
uncertainties that could cause our actual results to differ materially from any future results
expressed or implied by the forward-looking statements. Many factors could cause our actual
operations or results to differ materially from the operations and results anticipated in
forward-looking statements. These factors include, but are not limited to: our ability to obtain
additional funding to continue our operations; our ability to successfully commercialize our
existing products; our ability to successfully develop, clinically test and commercialize our
product candidates; the timing and outcome of the regulatory review process for our product
candidates; changes in the health care and regulatory environments of the United States and other
countries in which we intend to operate; our ability to attract and retain key management,
marketing and scientific personnel; competition; our ability to successfully prepare file,
prosecute, maintain, defend and enforce patent claims and other intellectual property rights; our
ability to successfully transition from a research and development company to a marketing, sales
and distribution concern, and our ability to identify and pursue development of additional product
candidates, as well as the factors contained in Item 1A  Risk Factors of our Annual Report on
Form 10-K. We do not undertake any obligation to update forward-looking statements, except as
required by applicable law. We intend that all forward-looking statements be subject to the safe
harbor provisions of PSLRA. These forward-looking statements are only predictions and reflect our
views as of the date they are made with respect to future events and financial performance.
 Overview
  in
vivo ex vivo ex vivo in
vivo TM TM
 Products and Product Candidates
 TM TM TM
 TM TM TM
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Critical Accounting Policies and Estimates
  Results of Operations
 TM
 Three Months ended March 31, 2010 Compared to Three Months Ended March 31, 2009
 TM
 TM TM
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Liquidity and Capital Resources
   
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  
 Item 4. Controls and Procedures.
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PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. (Removed and Reserved).
 
 Item 5. Other Information.
  
 Item 6. Exhibits.
 Exhibits:
 31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)32.1
    
    Certification of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
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SIGNATURES
  SAFESTITCH MEDICAL, INC.Date:  May 14, 2010
    By:
    /s/ Jeffrey G. SpragensJeffrey G. SpragensPresident and Chief Executive OfficerDate: May 14, 2010
    By:
    /s/ Adam S. JacksonAdam S. JacksonChief Financial Officer  19