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|   |   |                                                                                                                                                  |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| þ |   | ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15(d) OF      THE SECURITIES EXCHANGE ACT OF 1934                                              |
|   |   |                 For      the fiscal year ended December 31, 2008 |
| or     |
| o      |   | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF      THE SECURITIES EXCHANGE ACT OF 1934                                          |

|                                                                          |   |                                                |
|-------------------------------------------------------------------------------|--------|-----------------------------------------------------|
| Delaware                                                                      |   | 04-2793022                                          |
| (State      or other jurisdiction of incorporation      or organization) |   | (I.R.S.      Employer Identification      No.) |

|                                                                  |   |                                                  |
|-----------------------------------------------------------------------|--------|-------------------------------------------------------|
| Securities      registered pursuant to Section 12(b) of the Act: |   | None                                                  |
| Securities      registered pursuant to Section 12(g) of the Act: |   | Common      Stock, par value $0.01 per shareNone |

|                                |   |                          |   |                                                                                 |   |                                             |
|-------------------------------------|--------|-------------------------------|--------|--------------------------------------------------------------------------------------|--------|--------------------------------------------------|
| Large      accelerated filer o |   | Accelerated      filer o |   | Non-accelerated      filer o (Do      not check if a smaller reporting company) |   | Smaller      reporting company  þ |

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| PART      I        |             |                                                                                                           |
|--------------------|------------------|----------------------------------------------------------------------------------------------------------------|
|               | Item 1.          | Business                                                                                                       | 3 |
|               | Item      1A.    | Risk      Factors                                                                                         | 8 |
|               | Item      1B.    | Unresolved      Staff Comments                                                                            | 11 |
|               | Item      2.     | Properties                                                                                                | 11 |
|               | Item      3.     | Legal      Proceedings                                                                                    | 11 |
|               | Item      4.     | Submission      of Matters to a Vote of Security Holders                                                  | 11 |
| PART      II       |             | 12                                                                                                             |
|               | Item      5.     | Market      for Registrant’s Common Equity and Related Stockholder    Matters                            | 12 |
|               | Item      6.     | Selected      Financial Data                                                                              | 14 |
|               | Item      7.     | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations     | 15 |
|               | Item      7A.    | Quantitative      and Qualitative Disclosures About Market Risk                                           | 20 |
|               | Item      8.     | Financial      Statements and Supplementary Data                                                          | 20 |
|               | Item      9.     | Changes      In and Disagreements With Accountants on Accounting and Financial      Disclosure            | 36 |
|               | Item      9A(T). | Controls      and Procedures                                                                                   | 36 |
|               | Item      9B.    | Other      Information                                                                                    | 36 |
| PART      III      |             | 37                                                                                                             |
|               | Item      10.    | Directors,      Executive Officers and Corporate Governance                                               | 37 |
|               | Item      11.    | Executive      Compensation                                                                               | 37 |
|               | Item      12.    | Security      Ownership of Certain Beneficial Owners and Management and Related      Stockholder Matters  | 37 |
|               | Item      13.    | Certain      Relationships and Related Transactions, and Director      Independence                            | 37 |
|               | Item      14.    | Principal      Accountant Fees and Services                                                               | 37 |
| PART      IV  |             | 38                                                                                                             |
|               | Item      15.    | Exhibits      and Financial Statement Schedules                                                           | 39 |
| SIGNATURES.   |             | 40                                                                                                             |

----

Item 1.  Business

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----

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| University                                 |   | Field      of Research/Development             |
|--------------------------------------------|--------|------------------------------------------------|
| University      of Massachusetts, Lowell   |   | Biotechnology      and nanotechnology          |
| Massachusetts      Institute of Technology |   | Nanoemulsions      for biomedical applications |
| Marine      Biological Laboratory          |   | Cell      disruption                           |
| University      of Toronto                 |   | Genomic      research and expression           |
| University      of Karlsruhe               |   | Food      formulations and products            |
| Northeastern      University               |   | Pharmaceutical      nanotechnology particles   |
| The      Hebrew University of Jerusalem    |   | Colloid      chemistry emulsion technology     |
| University      of Vienna                  |   | Food      formulations and products            |

----

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|             |   | Fiscal      Year 2008 |   |
|------------------|--------|-----------------------|--------|
|             |   | High                  |   |   | Low |   |
| 4th      Quarter |   | $                     | 0.84   |   |   | $ | 0.35 |   |
| 3rd      Quarter |   |                  | 1.19   |   |   |   | 0.64 |   |
| 2nd      Quarter |   |                  | 1.21   |   |   |   | 1.00 |   |
| 1st      Quarter |   |                  | 1.29   |   |   |   | 1.00 |   |
|             |   |                  |   |   |   |   |   |   |
|             |   | Fiscal      Year 2007 |   |
|             |   | High                  |   |   | Low |   |
| 4th      Quarter |   | $                     | 1.39   |   |   | $ | 1.02 |   |
| 3rd      Quarter |   |                  | 1.67   |   |   |   | 1.15 |   |
| 2nd      Quarter |   |                  | 1.80   |   |   |   | 1.50 |   |
| 1st      Quarter |   |                  | 2.65   |   |   |   | 1.45 |   |

----

| Plan      Category                                                                |   | Number      of securities to be issued upon exercise of outstanding options, warrants      and rights(a) |      |   | Weighted-average      exercise price of outstanding options, warrants and rights(b) |   |   | Number      of securities remaining available for future issuance under equity      compensation plans (excluding securities reflected in column      (a))(c) |   |
|-----------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------|-----------|--------|-------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Equity      compensation plans approved   by      stockholders     |   |                                                                                                     | 1,284,682 |   |                                                                                | $      | 1.37   |                                                                                                                                                          |   |   | 836,000 |   |
| Equity      compensation plans not   approved      by stockholders |   |                                                                                                     | 213,992   |   |                                                                                | $      | 3.20   |                                                                                                                                                          |   |   | - |   |
| Total                                                                             |   |                                                                                                     | 1,498,674 |   |                                                                                | $      | 1.63   |                                                                                                                                                          |   |   | 836,000 |   |

| Cumulative      Total Return as of December 31, |   |
|-------------------------------------------------|--------|
|                                            |   |   | 12/03 |   |   |   | 12/04 |   |   |   | 12/05 |   |   |   | 12/06 |   |   |   | 12/07 |   |   |   | 12/08 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Microfluidics      International Corporation    |   |   | 100.00 |   |   |   | 173.33 |   |   |   | 60.00 |   |   |   | 68.44 |   |   |   | 51.56 |   |   |   | 16.00 |   |
| AMEX      Composite                             |   |   | 100.00 |   |   |   | 124.13 |   |   |   | 155.00 |   |   |   | 184.30 |   |   |   | 217.52 |   |   |   | 132.72 |   |
| Peer      Group                                 |   |   | 100.00 |   |   |   | 156.07 |   |   |   | 182.05 |   |   |   | 163.19 |   |   |   | 135.83 |   |   |   | 20.57 |   |

----

| · Advance      Photonic Inc.            |   | · Softbrands      Inc.              |
|--------------------------------------------------------|--------|----------------------------------------------------|
| · Elecsys      Corporation              |   | · Telkonet      Inc.                |
| · Elixir      Gaming Technologies Inc.  |   | · Tucows      Inc.                  |
| · Globalscape      Inc.                 |   | · Widepoint      Corporation        |
| · Orsus      Xelent Technologies Inc.   |   | · Wireless      Telecom Group Inc.  |
| · Relm      Wireless Corporation        |   |                                               |

|                                                                                                              |   | For      The Years Ended December 31, |                    |
|-------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|-------------------------|
| (in      thousands, except share and per share data)                                                              |   | 2008                                  |                    |   | 2007 |   |   | 2006 |   |   | 2005 |   |   | 2004 |   |
| Consolidated      Statement of Operations Data:                                                                   |   |                                  |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      revenues                                                                                               |   | $                                     | 14,871                  |   |   | $ | 12,992 |   |   | $ | 15,654 |   |   | $ | 11,645 |   |   | $ | 12,159 |   |
| Total      costs and expenses                                                                                     |   |                                  | 18,753                  |   |   |   | 14,174 |   |   |   | 14,450 |   |   |   | 12,416 |   |   |   | 11,462 |   |
| (Loss)      income  from continuing operations before income   taxes                     |   |                                  | (3,882                  | ) |   |   | (1,182 | ) |   |   | 1,204 |   |   |   | (771 | ) |   |   | 697 |   |
| Interest      expense                                                                                             |   |                                  | (154                    | ) |   |   | (20 | ) |   |   | (35 | ) |   |   | (59 | ) |   |   | (69 | ) |
| Interest      income                                                                                              |   |                                  | 25                      |   |   |   | 64 |   |   |   | 50 |   |   |   | 26 |   |   |   | 27 |   |
| Net      (loss) income  from continuing operations before   income      taxes            |   |                                  | (4,011                  | ) |   |   | (1,138 | ) |   |   | 1,219 |   |   |   | (804 | ) |   |   | 655 |   |
| Income      tax provision (benefit)                                                                               |   |                                  | -                       |   |   |   | 369 |   |   |   | (58 | ) |   |   | 185 |   |   |   | (450 | ) |
| Net      (loss) income  from continuing operations before   discontinued      operations |   |                                  | (4,011                  | ) |   |   | (1,507 | ) |   |   | 1,277 |   |   |   | (989 | ) |   |   | 1,105 |   |
| Loss      from discontinued operations                                                                            |   |                                  | -                       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (231 | ) |
| Net      (loss)  income                                                                                 |   | $                                     | (4,011                  | ) |   | $ | (1,507 | ) |   | $ | 1,277 |   |   | $ | (989 | ) |   | $ | 874 |   |
| Basic      amounts per common share:                                                                              |   |                                  |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      net (loss) income  per share from   continuing      operations                |   | $                                     | (0.39                   | ) |   | $ | (0.15 | ) |   | $ | 0.13 |   |   | $ | (0.10 | ) |   | $ | 0.11 |   |
| Basic      net (loss) income  per share from   discontinued      operations              |   |                                  | -                       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (0.02 | ) |
| Basic      net (loss) income  per share                                                                 |   | $                                     | (0.39                   | ) |   | $ | (0.15 | ) |   | $ | 0.13 |   |   | $ | (0.10 | ) |   | $ | 0.09 |   |
| Diluted      amounts per common share:                                                                            |   |                                  |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted      net (loss) income per share from   continuing      operations                         |   | $                                     | (0.39                   | ) |   | $ | (0.15 | ) |   | $ | 0.12 |   |   | $ | (0.10 | ) |   | $ | 0.10 |   |
| Diluted      net (loss) income  per share from   discontinued      operations            |   |                                  | -                       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (0.02 | ) |
| Diluted      net (loss)  income  per share                                                    |   | $                                     | (0.39                   | ) |   | $ | (0.15 | ) |   | $ | 0.12 |   |   | $ | (0.10 | ) |   | $ | 0.08 |   |
| Weighted      average shares outstanding:                                                                         |   |                                  |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares      used in computing net (loss) income per common   share,      basic                     |   |                                  | 10,296,296              |   |   |   | 10,183,376 |   |   |   | 10,012,685 |   |   |   | 9,756,221 |   |   |   | 9,345,560 |   |
| Shares      used in computing net (loss) income  per common   share,      diluted        |   |                                  | 10,296,296              |   |   |   | 10,183,376 |   |   |   | 10,611,635 |   |   |   | 9,756,221 |   |   |   | 10,329,313 |   |
|                                                                                                              |   |                                  |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                              |   |                                  | As      of December 31, |   |
| Consolidated      Balance Sheet Data:                                                                             |   | 2008                                  |                    |   | 2007 |   |   | 2006 |   |   | 2005 |   |   | 2004 |   |
| Cash      and cash equivalents                                                                                    |   | $                                     | 1,895                   |   |   | $ | 756 |   |   | $ | 1,860 |   |   | $ | 1,452 |   |   | $ | 2,028 |   |
| Current      assets                                                                                               |   |                                  | 7,119                   |   |   |   | 5,972 |   |   |   | 7,856 |   |   |   | 5,734 |   |   |   | 6,821 |   |
| Working      capital                                                                                              |   |                                  | 4,464                   |   |   |   | 4,382 |   |   |   | 5,643 |   |   |   | 4,273 |   |   |   | 5,180 |   |
| Total      assets                                                                                                 |   |                                  | 8,720                   |   |   |   | 6,357 |   |   |   | 8,225 |   |   |   | 6,212 |   |   |   | 7,292 |   |
| Long-term      debt (including current portion)                                                                   |   |                                  | 4,625                   |   |   |   | 65 |   |   |   | 312 |   |   |   | 563 |   |   |   | 813 |   |
| Total      stockholders' equity                                                                                   |   |                                  | 1,440                   |   |   |   | 4,767 |   |   |   | 5,947 |   |   |   | 4,426 |   |   |   | 5,089 |   |

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|                          |   | Total                                                                                                                                            |                                               | Payment      due by period                                                                                                                                             |
|-------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Contractual      Obligation   |   |                                                                                                                                             | Less      than     1 year |                                                                                                                                                                   | 1      - 3 years |   | 3      - 5 years |   | More      than 5 years |
| Convertible      debt (1)     |   |  $                           7,716 |                                               |  $                               450 |   |  $                              900 |   |  $                               900 |   |  $                        5,466 |
| Operating      leases         |   |  1,385                                                                                                                                      |                                               |  489                                                                                                                                                              |   |  872 |   |  24 |   |  - |
| Purchase      obligations (2) |   |  52                                                                                                                                         |                                               |  52                                                                                                                                                               |   |  - |   |  - |   |  - |
|                          |   |  $                           9,153 |                                               |  $                               991 |   |  $                           1,772 |   |  $                              924 |   |  $                        5,466 |

| (1)   | Includes      principal and interest payments, principal is due only at maturity unless      called upon an event of default under the convertible debenture      agreement. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Purchase      obligations consist of commitments for production materials and      supplies. |
|-----------------|----------------------------------------------------------------------------------------------|

| ·   | Revenue      Recognition. We recognize revenue in accordance with Staff Accounting      Bulletin (“SAB” No. 104, “Revenue Recognition in Financial Statements”).      Revenue is recognized when all of the following criteria are met: i)      persuasive evidence of an arrangement exists, ii) delivery has occurred,      iii) the price to the customer is fixed and determinable, and iv)      collectibility is reasonably assured. In revenue transactions where      support services are requested, revenue is recognized on shipment since      the support service obligation is not essential to the functionality of      the delivered products.  Revenue transactions involving      non-essential support services obligations are those which can generally      be completed in a short period of time at insignificant cost and the      skills required to complete these support services are not unique to us      and in many cases can be provided by third parties or the customers. The      customer’s purchase obligations are not contingent upon performance of      support services, if any, by us. Proceeds received in advance of product      shipment are recorded as customer advances in the consolidated balance      sheets. Returns and customer credits are infrequent and recorded as a      reduction to sales.  Rights of returns are not included in sales      arrangements. Discounts from list prices are recorded as a reduction to      sales. On occasion, we provide machines for rent by      customers.  Income for the rental of equipment is recognized on      a straight-line basis over the rental term. Rental income and product      sales are classified in revenues in the consolidated statement of      operations. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Accounts Receivable      Valuation.  We perform various analyses to evaluate      accounts receivable balances and record an allowance for bad debts based      on the estimated collectability of the accounts such that the amounts      reflect estimated net realizable value.  If actual uncollectible      amounts significantly exceed the estimated allowance, our operating      results would be significantly and adversely  affected. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Inventory      Valuation.  We value our inventory at the lower of our      actual cost or the current estimated market value.  We regularly      review inventory quantities on hand and inventory commitments with      suppliers and record a provision for excess and obsolete inventory based      primarily on our historical usage for the prior twenty-four month      period.  Although we make every effort to ensure the accuracy of      our forecasts of future product demand, any significant unanticipated      change in demand or technological developments could have a significant      impact on the value of our inventory and our reported operating      results. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Product      Warranties.  Our products are generally sold with a      twelve month warranty provision that requires us to remedy deficiencies in      quality or performance of our products at no cost to our customers only      after it has been determined that the cause of the deficiency is not due      to the actions of the machine operator or product used in the      machine.  We have established a policy for replacing parts that      wear out or break prematurely.  The policy called for replacing      the parts or repairing a machine within one year of the      sale.  Commencing in May of 2006, we amended our warranty by      limiting to a period of 90 days our warranty coverage on certain critical      wear items.  We are now selling more advanced processor      production systems than past years that may require more costly      parts.   |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| MICROFLUIDICS      INTERNATIONAL CORPORATION                                                                                                                                                                                                                |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Consolidated      Balance Sheets                                                                                                                                                                                                                            |   |
| (in      thousands, except share and per share amounts)                                                                                                                                                                                                     |   |
|                                                                                                                                                                                                                                                        |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                        |   | December      31, |   |
|                                                                                                                                                                                                                                                        |   | 2008 |   |   | 2007 |   |
| ASSETS                                                                                                                                                                                                                                                      |   |   |   |   |   |   |
| Current      assets:                                                                                                                                                                                                                                        |   |   |   |   |   |   |
| Cash      and cash equivalents                                                                                                                                                                                                                              |   | $ | 1,895 |   |   | $ | 756 |   |
| Accounts      receivable, net of allowance of $44 and $41 as of   December      31, 2008 and  2007, respectively                                                                                                                   |   |   | 2,181 |   |   |   | 2,582 |   |
| Inventories                                                                                                                                                                                                                                                 |   |   | 2,723 |   |   |   | 2,353 |   |
| Prepaid      and other current assets                                                                                                                                                                                                                       |   |   | 320 |   |   |   | 281 |   |
| Total      current assets                                                                                                                                                                                                                                   |   |   | 7,119 |   |   |   | 5,972 |   |
| Property      and equipment, net                                                                                                                                                                                                                            |   |   | 1,121 |   |   |   | 325 |   |
| Other      non-current assets                                                                                                                                                                                                                               |   |   | 480 |   |   |   | 60 |   |
| Total      assets                                                                                                                                                                                                                                           |   | $ | 8,720 |   |   | $ | 6,357 |   |
|                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |
| Current      liabilities:                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |
| Current      maturities of long-term debt                                                                                                                                                                                                                   |   |  $ | - |   |   |  $ | 327 |   |
| Accounts      payable                                                                                                                                                                                                                                       |   |   | 986 |   |   |   | 129 |   |
| Accrued      expenses                                                                                                                                                                                                                                       |   |   | 1,233 |   |   |   | 725 |   |
| Customer      advances                                                                                                                                                                                                                                      |   |   | 436 |   |   |   | 409 |   |
| Total      current liabilities                                                                                                                                                                                                                              |   |   | 2,655 |   |   |   | 1,590 |   |
| Long-term      liabilities:                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| Convertible      debt                                                                                                                                                                                                                                       |   |   | 4,625 |   |   |   | - |   |
| Total      liabilities                                                                                                                                                                                                                                      |   |   | 7,280 |   |   |   | 1,590 |   |
| Stockholders'      equity:                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |
| Common      stock; $.01 par value; 20,000,000 shares authorized;   10,592,228      and 10,517,178 shares issued; 10,356,782 and 10,256,732shares   outstanding      as of December 31, 2008 and  2007, respectively |   |   | 106 |   |   |   | 105 |   |
| Additional      paid-in capital                                                                                                                                                                                                                             |   |   | 18,042 |   |   |   | 17,378 |   |
| Accumulated      deficit                                                                                                                                                                                                                                    |   |   | (16,039 | ) |   |   | (12,028 | ) |
| Treasury      stock, 235,446 and 260,446 shares, at cost, as of December 31, 2008 and      2007, respectively.                                                                                                                                              |   |   | (669 | ) |   |   | (688 | ) |
| Total      stockholders' equity                                                                                                                                                                                                                             |   |   | 1,440 |   |   |   | 4,767 |   |
| Total      liabilities and stockholders' equity                                                                                                                                                                                                             |   | $ | 8,720 |   |   | $ | 6,357 |   |

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| MICROFLUIDICS      INTERNATIONAL CORPORATION                                                           |   |
|--------------------------------------------------------------------------------------------------------|--------|
| Consolidated      Statements of Operations                                                             |   |
| (in      thousands, except share and per share amounts)                                                |   |
|                                                                                                   |   | Years      Ended December 31, |   |
|                                                                                                   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
| Revenues                                                                                               |   | $ | 14,871 |   |   | $ | 12,992 |   |   | $ | 15,654 |   |
| Cost      of sales                                                                                     |   |   | 7,298 |   |   |   | 5,646 |   |   |   | 7,001 |   |
| Gross      profit                                                                                      |   |   | 7,573 |   |   |   | 7,346 |   |   |   | 8,653 |   |
| Operating      expenses:                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Research      and development                                                                          |   |   | 2,116 |   |   |   | 1,863 |   |   |   | 1,763 |   |
| Selling                                                                                                |   |   | 4,844 |   |   |   | 3,584 |   |   |   | 2,985 |   |
| General      and administrative                                                                        |   |   | 4,495 |   |   |   | 3,081 |   |   |   | 2,701 |   |
|        Total operating expenses                                                                   |   |   | 11,455 |   |   |   | 8,528 |   |   |   | 7,449 |   |
| (Loss)      income  from operations                                                          |   |   | (3,882 | ) |   |   | (1,182 | ) |   |   | 1,204 |   |
| Interest      expense                                                                                  |   |   | (154 | ) |   |   | (20 | ) |   |   | (35 | ) |
| Interest      income                                                                                   |   |   | 25 |   |   |   | 64 |   |   |   | 50 |   |
| (Loss)      income  before income tax provision                                              |   |   | (4,011 | ) |   |   | (1,138 | ) |   |   | 1,219 |   |
| Income      tax  provision  (benefit)                                              |   |   | - |   |   |   | 369 |   |   |   | (58 | ) |
| Net      (loss) income                                                                                 |   | $ | (4,011 | ) |   | $ | (1,507 | ) |   | $ | 1,277 |   |
| Net      (loss) income  per common share:                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
|         Basic                                                  |   | $ | (0.39 | ) |   | $ | (0.15 | ) |   | $ | 0.13 |   |
|         Diluted                                                |   | $ | (0.39 | ) |   | $ | (0.15 | ) |   | $ | 0.12 |   |
| Weighted      average number of common and common   equivalent      shares outstanding: |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                  |   |   | 10,296,296 |   |   |   | 10,183,376 |   |   |   | 10,012,685 |   |
| Diluted                                                                                                |   |   | 10,296,296 |   |   |   | 10,183,376 |   |   |   | 10,611,635 |   |

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| MICROFLUIDICS      INTERNATIONAL CORPORATION                                                           |   |
|--------------------------------------------------------------------------------------------------------|--------|
| Consolidated      Statements of Cash Flows                                                             |   |
| (in      thousands)                                                                                    |   |
|                                                                                                   |   | Years      Ended December 31, |   |
|                                                                                                   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
| Cash      flows from operating activities:                                                             |   |   |   |   |   |   |   |   |   |
| Net      (loss) income                                                                                 |   | $ | (4,011 | ) |   | $ | (1,507 | ) |   | $ | 1,277 |   |
| Adjustments      to reconcile net (loss)  income to net cash    flows:                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      tax  provision  (benefit)                                              |   |   | - |   |   |   | 369 |   |   |   | (68 | ) |
| Depreciation      and amortization                                                                     |   |   | 403 |   |   |   | 170 |   |   |   | 174 |   |
| Allowance      for doubtful accounts                                                                   |   |   | 3 |   |   |   | 3 |   |   |   | (5 | ) |
| Provision      for obsolete inventory                                                                  |   |   | (12 | ) |   |   | 8 |   |   |   | 9 |   |
| Share-based      compensation                                                                          |   |   | 252 |   |   |   | 218 |   |   |   | 141 |   |
| Changes      in assets and liabilities:                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts      receivable                                                                               |   |   | 398 |   |   |   | 668 |   |   |   | (1,383 | ) |
| Other      current assets                                                                              |   |   | - |   |   |   | - |   |   |   | (116 | ) |
| Inventories                                                                                            |   |   | (358 | ) |   |   | (335 | ) |   |   | (185 | ) |
| Prepaid      expenses                                                                                  |   |   | (626 | ) |   |   | 56 |   |   |   | 61 |   |
| Accounts      payable                                                                                  |   |   | 857 |   |   |   | (118 | ) |   |   | 131 |   |
| Accrued      expenses                                                                                  |   |   | 508 |   |   |   | (128 | ) |   |   | 376 |   |
| Customer      advances                                                                                 |   |   | 27 |   |   |   | (444 | ) |   |   | 237 |   |
| Net      cash flows  (used in ) provided by operating      activities                        |   |   | (2,559 | ) |   |   | (1,040 | ) |   |   | 649 |   |
| Cash      flows from investing activities:                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase      of property, plant and equipment                                                         |   |   | (1,030 | ) |   |   | (176 | ) |   |   | (57 | ) |
| Net      cash flows used in investing activities                                                       |   |   | (1,030 | ) |   |   | (176 | ) |   |   | (57 | ) |
| Cash      flows from financing activities:                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Borrowings      on bank loan                                                                           |   |   | 1,999 |   |   |   | 262 |   |   |   | - |   |
| Principal      repayments on long-term debt and obligations under   capital      leases |   |   | (65 | ) |   |   | (259 | ) |   |   | (288 | ) |
| Payments      on bank loan                                                                             |   |   | (2,261 | ) |   |   | - |   |   |   | - |   |
| Proceeds      from issuance of convertible debt                                                        |   |   | 5,000 |   |   |   | - |   |   |   | - |   |
| Net      proceeds from issuance of common stock                                                        |   |   | 55 |   |   |   | 109 |   |   |   | 104 |   |
| Net      cash flows provided by (used in ) financing activities                                        |   |   | 4,728 |   |   |   | 112 |   |   |   | (184 | ) |
| Net      change in cash and cash equivalents                                                           |   |   | 1,139 |   |   |   | (1,104 | ) |   |   | 408 |   |
| Cash      and cash equivalents at beginning of period                                                  |   |   | 756 |   |   |   | 1,860 |   |   |   | 1,452 |   |
| Cash      and cash equivalents at end of period                                                        |   | $ | 1,895 |   |   | $ | 756 |   |   | $ | 1,860 |   |
| Supplemental      Disclosure of Cash Flow Information:                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      received                                                                                 |   | $ | 25 |   |   | $ | 63 |   |   | $ | 50 |   |
| Interest      paid                                                                                     |   |   | 95 |   |   |   | 20 |   |   |   | 34 |   |
| Taxes      paid, net of refund                                                                         |   |   | 89 |   |   |   | - |   |   |   | 10 |   |
|  Non-cash      item                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|        Issuance      of warrants                                    |   |  $ | 382  |   |   |  $ | -  |   |   |  $ | -  |   |

----

| Microfluidics      International Corporation                                                     |   |
|--------------------------------------------------------------------------------------------------|--------|
| Consolidated      Statements of Changes in Stockholders' Equity                                  |   |
|        (in      thousands)                                                                  |   |
|                                                                                             |   |
|                                                                                             |   | Common      Stock |   |   | Additional      Paid-in Capital |   |   | Accumulated      Deficit |   |   | Treasury      Stock |   |   | Total      Stockholders' Equity |   |
| (in      thousands)                                                                              |   | Number      of Shares |   |   | Amount |   |   | Number      of Shares |   |   | Amount |   |
| Balance      at December 31, 2006                                                                |   |   | 10,166 |   |   | $ | 102 |   |   | $ | 16,809 |   |   | $ | (11,798 | ) |   |   | 260 |   |   | $ | (688 | ) |   | $ | 4,425 |   |
| Issuance      of common stock in connection   with      exercise of stock options |   |   | 144 |   |   |   | 2 |   |   |   | 69 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 71 |   |
| Issuance      of common stock under employee   stock      purchase plan           |   |   | 29 |   |   |   |   |   |   |   | 33 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 33 |   |
| Compensation      expense related to stock   options                              |   |   |   |   |   |   |   |   |   |   | 130 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 130 |   |
| Compensation      expense related to director   stock      options                |   |   | 11 |   |   |   |   |   |   |   | 5 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 5 |   |
| Compensation      expense related to employee   purchase      plan                |   |   |   |   |   |   |   |   |   |   | 6 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 6 |   |
| Net      income                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,277 |   |   |   |   |   |   |   |   |   |   |   | 1,277 |   |
| Balance      at December 31, 2006                                                                |   |   | 10,350 |   |   |   | 104 |   |   |   | 17,052 |   |   |   | (10,521 | ) |   |   | 260 |   |   |   | (688 | ) |   |   | 5,947 |   |
| Issuance      of common stock in connection   with      exercise of stock options |   |   | 103 |   |   |   | 1 |   |   |   | 74 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 75 |   |
| Issuance      of common stock under employee   stock      purchase plan           |   |   | 28 |   |   |   |   |   |   |   | 34 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 34 |   |
| Compensation      expense related to stock   options                              |   |   |   |   |   |   |   |   |   |   | 154 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 154 |   |
| Non-      cash share based compensation  expense - former      officer                 |   |   | 36 |   |   |   |   |   |   |   | 61 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 61 |   |
| Compensation      expense related to employee   purchase      plan                |   |   |   |   |   |   |   |   |   |   | 3 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 3 |   |
| Net      loss                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,507 | ) |   |   |   |   |   |   |   |   |   |   | (1,507 | ) |
| Balance      at December 31, 2007                                                                |   |   | 10,517 |   |   |   | 105 |   |   |   | 17,378 |   |   |   | (12,028 | ) |   |   | 260 |   |   |   | (688 | ) |   |   | 4,767 |   |
| Issuance      of common stock in connection   with      exercise of stock options |   |   | 55 |   |   |   | 1 |   |   |   | 27 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 28 |   |
| Issuance      of common stock under employee   stock      purchase plan           |   |   | 20 |   |   |   |   |   |   |   | 22 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 22 |   |
| Issuance      of treasury stock                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (25 | ) |   |   | 19 |   |   |   | 19 |   |
| Compensation      expense related to stock   options                              |   |   |   |   |   |   |   |   |   |   | 233 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 233 |   |
| Warrants      issued with debt                                                                   |   |   |   |   |   |   |   |   |   |   | 382 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 382 |   |
| Net      loss                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (4,011 | ) |   |   |   |   |   |   |   |   |   |   | (4,011 | ) |
| Balance      at December 31, 2008                                                                |   |   | 10,592 |   |   | $ | 106 |   |   | $ | 18,042 |   |   | $ | (16,039 | ) |   |   | 235 |   |   | $ | (669 | ) |   | $ | 1,440 |   |

----

| 1.   | Organization      and Summary of Significant AccountingPolicies |
|----------------|-----------------------------------------------------------------|

----

----

|                               |   | Years      Ended December 31, |   |
|------------------------------------|--------|-------------------------------|--------|
|                               |   | 2008                          |   |   | 2007 |   |   | 2006 |   |
| Dividend      yield                |   | None                          |   |   | None |   |   | None |   |
| Expected      volatility           |   |                          | 230    | % |   |   | 104 | % |   |   | 116 | % |
| Risk-free      interest rate       |   |                          | 1.55   | % |   |   | 3.62 | % |   |   | 4.85 | % |
| Expected      life                 |   | 5      years                  |   |   | 5      years |   |   | 5      years |   |
| Fair      value of options granted |   | $                             | 0.84   |   |   | $ | 1.16 |   |   | $ | 1.25 |   |

----

| 2.   | Industry      Segment, Geographic and Enterprise-Wide  Reporting |
|----------------|------------------------------------------------------------------|

|                |   | Years      Ended December 31, |   |
|---------------------|--------|-------------------------------|--------|
| (in      thousands) |   | 2008                          |   |   | 2007 |   |   | 2006 |   |
| North      America  |   | $                             | 7,423  |   |   | $ | 7,848 |   |   | $ | 8,636 |   |
| Asia                |   |                          | 2,478  |   |   |   | 2,800 |   |   |   | 3,525 |   |
| Europe              |   |                          | 4,970  |   |   |   | 2,344 |   |   |   | 3,493 |   |
|                |   | $                             | 14,871 |   |   | $ | 12,992 |   |   | $ | 15,654 |   |

| 3.   | Inventories |
|----------------|-------------|

|                                      |   | December      31, |   |
|-------------------------------------------|--------|-------------------|--------|
| (in      thousands)                       |   | 2008              |   |   | 2007 |   |
| Raw      materials                        |   | $                 | 2,485  |   |   | $ | 2,140 |   |
| Work-in      progress                     |   |              | 63     |   |   |   | 63 |   |
| Finished      goods                       |   |              | 371    |   |   |   | 358 |   |
|                                      |   |              | 2,919  |   |   |   | 2,561 |   |
| Less:      provision for excess inventory |   |              | (196   | ) |   |   | (208 | ) |
| Inventories,      net                     |   | $                 | 2,723  |   |   | $ | 2,353 |   |

| 4.   | Property      and Equipment |
|----------------|-----------------------------|

|                                                            |   | December      31, |   |
|-----------------------------------------------------------------|--------|-------------------|--------|
| (in      thousands)                                             |   | 2008              |   |   | 2007 |   |
| Furniture,      fixtures and office equipment                   |   | $                 | 893    |   |   | $ | 686 |   |
| Machinery,      equipment and tooling                           |   |              | 505    |   |   |   | 455 |   |
| Leasehold      improvements                                     |   |              | 869    |   |   |   | 96 |   |
|                                                            |   |              | 2,267  |   |   |   | 1,237 |   |
| Less:  accumulated      depreciation and amortization |   |              | (1,146 | ) |   |   | (912 | ) |
| Property      and equipment, net                                |   | $                 | 1,121  |   |   | $ | 325 |   |

----

| 5.   | Other      Non-Current Assets |
|----------------|-------------------------------|

| 6.   | Accrued      Expenses |
|----------------|-----------------------|

|                                |   | December      31, |   |
|-------------------------------------|--------|-------------------|--------|
| (in      thousands)                 |   | 2008              |   |   | 2007 |   |
| Accrued      expenses               |   | $                 | 549    |   |   | $ | 273 |   |
| Accrued      wages and vacation pay |   |              | 360    |   |   |   | 164 |   |
| Accrued      commissions            |   |              | 253    |   |   |   | 234 |   |
| Accrued      warranty               |   |              | 71     |   |   |   | 54 |   |
|                                |   | $                 | 1,233  |   |   | $ | 725 |   |

| 7.   | Long-term      Debt and Obligations Under CapitalLease |
|----------------|--------------------------------------------------------|

|                                                 |   | December      31, |   |
|------------------------------------------------------|--------|-------------------|--------|
| (in      thousands)                                  |   | 2008              |   |   | 2007 |   |
| Convertible      debt, (net of discount of $375,156) |   | $                 | 4,625  |   |   | $ | - |   |
| Term      loan                                       |   |              | -      |   |   |   | 62 |   |
| Obligations      under capital lease                 |   |              | -      |   |   |   | 3 |   |
|                                                 |   |              | 4,625  |   |   |   | 65 |   |
| Less:  current      portion                |   |              | -      |   |   |   | (65 | ) |
| Long-term      debt, net of current portion          |   | $                 | 4,625  |   |   | $ | - |   |

| 8.   | Employee      Benefit Plans |
|----------------|-----------------------------|

----

| 9.   |  Income      Taxes |
|----------------|-------------------------|

|                |   | Years      Ended December 31, |   |
|---------------------|--------|-------------------------------|--------|
| (in      thousands) |   | 2008                          |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Current:            |   |                          |   |   |   |   |   |   |   |   |   |   |
| Federal             |   | $                             | -      |   |   | $ | - |   |   | $ | 21 |   |   | $ | - |   |
| State               |   |                          | -      |   |   |   | - |   |   |   | 10 |   |   |   | - |   |
| Foreign             |   |                          | -      |   |   |   | - |   |   |   | 15 |   |   |   | - |   |
|                |   | $                             | -      |   |   | $ | - |   |   | $ | 46 |   |   | $ | - |   |
| Deferred:           |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal             |   | $                             | -      |   |   | $ | 312 |   |   | $ | (88 | ) |   | $ | (345 | ) |
| State               |   |                          | -      |   |   |   | 57 |   |   |   | (16 | ) |   |   | (105 | ) |
| Foreign             |   |                          | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                |   | $                             | -      |   |   | $ | 369 |   |   | $ | (104 | ) |   | $ | (450 | ) |

|                                                    |   | Years      Ended December 31, |   |
|---------------------------------------------------------|--------|-------------------------------|--------|
|                                                    |   | 2008                          |   |   | 2007 |   |   | 2006 |   |
| Federal      income tax at statutory rate               |   |                          | 34.0   | % |   |   | 34.0 | % |   |   | 34.0 | % |
| State      income taxes, net of federal benefits        |   |                          | 5.8    | % |   |   | 5.3 | % |   |   | 6.3 | % |
| Foreign                                                 |   |                          | -2.4   | % |   |   | -2.0 | % |   |   | 0.0 | % |
| Permanent      adjustments                              |   |                          | -2.4   | % |   |   | -5.4 | % |   |   | 4.2 | % |
| Net      research and development and other tax credits |   |                          | -0.4   | % |   |   | -5.0 | % |   |   | 0.0 | % |
| Valuation      allowance                                |   |                          | -34.8  | % |   |   | -58.7 | % |   |   | -50.9 | % |
| Other                                                   |   |                          | 0.2    | % |   |   | -0.6 | % |   |   | 1.6 | % |
| Effective      tax rate                                 |   |                          | 0.0    | % |   |   | -32.4 | % |   |   | -4.8 | % |

|                                                                                         |   | December      31, |   |
|----------------------------------------------------------------------------------------------|--------|-------------------|--------|
| (in      thousands)                                                                          |   | 2008              |   |   | 2007 |   |
| Deferred      tax assets:                                                                    |   |              |   |   |   |   |
| Net      operating loss carry forwards                                                       |   | $                 | 4,388  |   |   | $ | 3,384 |   |
| Research      and development and other credits                                              |   |              | 50     |   |   |   | 66 |   |
| Accruals      and allowances not currently deductible   for      tax purposes |   |              | 211    |   |   |   | 168 |   |
| Depreciation      and other                                                                  |   |              | 111    |   |   |   | 103 |   |
| Valuation      allowance                                                                     |   |              | (4,760 | ) |   |   | (3,721 | ) |
| Total      deferred tax assets                                                               |   | $                 | -      |   |   | $ | - |   |

----

| 10.   | Stockholders’      Equity |
|-----------------|---------------------------------|

| Face      amount of Notes                |   | $      | 5,000,000 |   |
|------------------------------------------|--------|--------|-----------|--------|
|                                     |   |   |      |   |
| Less      unamortized discount           |   |   | 375,156   |   |
|                      |   |   |      |   |
| Carrying      value at December 31, 2008 |   | $      | 4,624,844 |   |

----

| 11.   | Supplemental      Disclosures for Stock-BasedCompensation |
|-----------------|-----------------------------------------------------------|

|                                    |   | Years      Ended December 31, |      |
|-----------------------------------------|--------|-------------------------------|-----------|
|                                    |   | 2008                          |      |   | 2007 |   |   | 2006 |   |
|                                    |   | Number      of Options        |      |   | Weighted      Average Exercise Price |   |   | Number      of Options |   |   | Weighted      Average Exercise Price |   |   | Number      of Options |   |   | Weighted      Average Exercise Price |   |
| Outstanding      at beginning of period |   |                          | 1,585,427 |   |   | $ | 1.35 |   |   |   | 1,561,086 |   |   | $ | 1.45 |   |   |   | 1,718,925 |   |   | $ | 1.37 |   |
| Granted                                 |   |                          | 432,577   |   |   |   | 1.06 |   |   |   | 376,982 |   |   |   | 1.16 |   |   |   | 58,412 |   |   |   | 1.24 |   |
| Cancelled                               |   |                          | (678,681  | ) |   |   | 1.21 |   |   |   | (213,139 | ) |   |   | 2.18 |   |   |   | (62,052 | ) |   |   | 2.03 |   |
| Exercised                               |   |                          | (54,641   | ) |   |   | 0.42 |   |   |   | (139,502 | ) |   |   | 0.66 |   |   |   | (154,199 | ) |   |   | 0.49 |   |
| Outstanding      at end of period       |   |                          | 1,284,682 |   |   | $ | 1.37 |   |   |   | 1,585,427 |   |   | $ | 1.35 |   |   |   | 1,561,086 |   |   | $ | 1.45 |   |
| Exercisable      at end of period       |   |                          | 550,646   |   |   | $ | 1.59  |   |   |   | 1,134,678 |   |   | $ | 1.35 |   |   |   | 1,321,735 |   |   | $ | 1.32 |   |

|  Range of exercise prices |              |   |  Number of options outstanding |   |      | Weighted      average remaining contractual life (years) |   |   | Weighted      average exercise price |   |   | Exercisable      number of options |   |   |  Weighted average exercise price |   |
|--------------------------------|-------------------|--------|-------------------------------------|--------|-----------|----------------------------------------------------------|--------|--------|--------------------------------------|--------|--------|------------------------------------|--------|--------|---------------------------------------|--------|
| $                              | 0.30      - $0.95 |   |                                |   | 195,555   |                                                     |   |   | 4.1                                  |   |   | $                                  | 0.96   |   |                                  |   | 182,825 |   |   | $ | 0.46 |   |
|                           | 1.00      - $1.95 |   |                                |   | 910,865   |                                                     |   |   | 8                                    |   |   |                               | 1.74   |   |                                  |   | 192,271 |   |   |   | 1.81 |   |
|                           | 2.06      - $4.25 |   |                                |   | 178,262   |                                                     |   |   | 4.7                                  |   |   |                               | 4.63   |   |                                  |   | 175,550 |   |   |   | 2.51 |   |
|                           | 0.30      - $4.25 |   |                                |   | 1,284,682 |                                                     |   |   | 5.6                                  |   |   |                               | 1.37   |   |                                  |   | 550,646 |   |   |   | 1.59 |   |

----

| 12.   | Commitments |
|-----------------|-------------|

| Years      Ended December 31               |   | (in      thousands) |   |
|--------------------------------------------|--------|---------------------|--------|
| 2009                                       |   | $                   | 489    |   |
| 2010                                       |   |                | 473    |   |
| 2011                                  |   |                | 400    |   |
| 2012                                  |   |                | 24     |   |
| 2013                                  |   |                | -      |   |
| Thereafter                                 |   |                | -      |   |
| Total  lease  payments |   | $                   | 1,386  |   |

| 13.   | Related      Party Transactions |
|-----------------|---------------------------------|

| 14.   | Condensed      Consolidated Quarterly Financial Data  (unaudited) |
|-----------------|-------------------------------------------------------------------|

|                                                 |   | Year      Ended December 31, 2008 |   |
|------------------------------------------------------|--------|-----------------------------------|--------|
| (in      thousands, except share and per share data) |   | Qtr.      1                       |   |   | Qtr.      2 |   |   | Qtr.      3 |   |   | Qtr.      4 |   |
| Revenues                                             |   | $                                 | 3,522  |   |   | $ | 4,374 |   |   | $ | 3,511 |   |   | $ | 3,464 |   |
|                                                 |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross      profit                                    |   |                              | 1,913  |   |   |   | 2,149 |   |   |   | 1,803 |   |   |   | 1,708 |   |
|                                                 |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss      before income tax provision                |   |                              | (445   | ) |   |   | (790 | ) |   |   | (1,061 | ) |   |   | (1,715 | ) |
| Income      tax provision                            |   |                              | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net      loss                                        |   |                              | (445   | ) |   |   | (790 | ) |   |   | (1,061 | ) |   |   | (1,715 | ) |
| Net      loss per share:                             |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      loss per share                            |   | $                                 | (0.04  | ) |   | $ | (0.08 | ) |   | $ | (0.10 | ) |   | $ | (0.17 | ) |
| Diluted      loss per share                          |   | $                                 | (0.04  | ) |   | $ | (0.08 | ) |   | $ | (0.10 | ) |   | $ | (0.17 | ) |
|                                                 |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                 |   | Year      Ended December 31, 2007 |   |
|                                                 |   | Qtr.      1                       |   |   | Qtr.      2 |   |   | Qtr.      3 |   |   | Qtr.      4 |   |
| Revenues                                             |   | $                                 | 2,801  |   |   | $ | 3,557 |   |   | $ | 2,311 |   |   | $ | 4,323 |   |
| Gross      profit                                    |   |                              | 1,608  |   |   |   | 2,104 |   |   |   | 1,193 |   |   |   | 2,441 |   |
| (Loss)      income before income tax provision       |   |                              | (417   | ) |   |   | (107 | ) |   |   | (859 | ) |   |   | 245 |   |
| Income      tax provision                            |   |                              | -      |   |   |   | - |   |   |   | - |   |   |   | 369 |   |
| Net      loss                                        |   |                              | (417   | ) |   |   | (107 | ) |   |   | (859 | ) |   |   | (124 | ) |
| Net      loss per share:                             |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      loss per share                            |   | $                                 | (0.04  | ) |   | $ | (0.01 | ) |   | $ | (0.08 | ) |   | $ | (0.02 | ) |
| Diluted      loss per share                          |   | $                                 | (0.04  | ) |   | $ | (0.01 | ) |   | $ | (0.08 | ) |   | $ | (0.02 | ) |

----

| 15.   | Valuation      and Qualifying Accounts: |
|-----------------|-----------------------------------------|

| (in      thousands)                       |   | Balance      at Beginning of Period |   |   | Additions      Charged to Costs and Expenses |   |   | Deductions      and Adjustments |   |   | Balance      at End of Period |   |
|-------------------------------------------|--------|-------------------------------------|--------|--------|----------------------------------------------|--------|--------|---------------------------------|--------|--------|-------------------------------|--------|
| Allowance      for Doubtful Accounts:     |   |                                |   |   |                                         |   |   |                            |   |   |                          |   |
| For      the year ended December 31, 2008 |   | $                                   | 41     |   |                                         | $      | 3      |                            |   | $      | -                             |   |   | $ | 44 |   |
| For      the year ended December 31, 2007 |   |                                | 38     |   |                                         |   | 6      |                            |   |   | (3                            | )      |   |   | 41 |   |
| For      the year ended December 31, 2006 |   |                                | 43     |   |                                         |   | 9      |                            |   |   | (14                           | )      |   |   | 38 |   |
|                                      |   |                                |   |   |                                         |   |   |                            |   |   |                          |   |   |   |   |   |
| Inventory      Reserve:                   |   |                                |   |   |                                         |   |   |                            |   |   |                          |   |   |   |   |   |
| For      the year ended December 31, 2008 |   | $                                   | 208    |   |                                         | $      | -      |                            |   | $      | (12                           | )      |   | $ | 196 |   |
| For      the year ended December 31, 2007 |   |                                | 200    |   |                                         |   | 8      |                            |   |   | -                             |   |   |   | 208 |   |
| For      the year ended December 31, 2006 |   |                                | 185    |   |                                         |   | 15     |                            |   |   | -                             |   |   |   | 200 |   |
|                                      |   |                                |   |   |                                         |   |   |                            |   |   |                          |   |   |   |   |   |
|                                      |   |                                |   |   |                                         |   |   |                            |   |   |                          |   |   |   |   |   |
| Warranty      Reserve:                    |   |                                |   |   |                                         |   |   |                            |   |   |                          |   |   |   |   |   |
| For      the year ended December 31, 2008 |   | $                                   | 54     |   |                                         | $      | 17     |                            |   | $      | -                             |   |   | $ | 71 |   |
| For      the year ended December 31, 2007 |   |                                | 74     |   |                                         |   | 14     |                            |   |   | (34                           | )      |   |   | 54 |   |
| For      the year ended December 31, 2006 |   |                                | 58     |   |                                         |   | 16     |                            |   |   | -                             |   |   |   | 74 |   |

----

|   | None. |
|--------|-------|

----

| The      information required by this Item 11 will be incorporated by reference      from our definitive proxy statement or will be filed as an amendment to      our Form 10-K within 120 days of our fiscal year  end. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Item      13. | Certain      Relationships and Related Transactions, and Director      Independence |
|---------------|-------------------------------------------------------------------------------------|

| Item      14. | Principal      Accounting  Fees andServices |
|---------------|-------------------------------------------------------|

----

| (a)   | Financial      Statements |
|-----------------|---------------------------|

|                                                                                                                   |   | Page   |   |
|------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|                                                                                                                   |   |   |   |
| Report      of Independent Registered Public Accounting Firm                                                           |   |   | 21     |   |
|                                                                                                                   |   |   |   |   |
| Consolidated      Balance Sheets as of December 31, 2008 and 2007                                                      |   |   | 22     |   |
|                                                                                                                   |   |   |   |   |
| Consolidated      Statements of Operations for the Three Years Ended December 31,      2008                            |   |   | 23     |   |
|                                                                                                                   |   |   |   |   |
| Consolidated      Statements of Cash Flows for the Three Years Ended December 31,      2008                            |   |   | 24     |   |
|                                                                                                                   |   |   |   |   |
| Consolidated      Statements of Changes in Stockholders’ Equity for the Three Years Ended      December 31, 2008 |   |   | 25     |   |
|                                                                                                                   |   |   |   |   |
| Notes      to Consolidated Financial Statements                                                                        |   |   | 26-35  |   |

----

| (b)   | Exhibit      Index |
|-----------------|--------------------|

| Exhibit      No. |   | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3(a)             |   | Certificate      of Incorporation for the Company, as amended (filed as Exhibit 2A to      Registration Statement No. 0-11625 on Form 8-A and as Exhibit 3.1(a) to      the Company’s Report on Form 10-Q for the quarterly period ended September      30, 1999 and incorporated herein by reference).                                                                                                                                                                                                                               |
| 3(b)             |   | Amended      and Restated By-Laws for the Company (filed as Exhibit 3.3(b) to the      Company's Annual Report on Form 10-K for the fiscal year ended December      31, 1996 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                         |
| 4.1              |   | Certificate      of Incorporation for the Company, as amended (filed as Exhibit 2A to      Registration Statement No. 0-11625 on Form 8-A and as Exhibit 3.1(a)      to the Company’s Report on Form 10-Q for the quarterly period ended      September 30, 1999 and incorporated herein by  reference).                                                                                                                                                                                                                         |
| 4.2              |   | Amended      and Restated By-Laws for the Company (filed as Exhibit 3.3(b) to the      Company’s Annual Report on Form 10-K for the fiscal year ended December      31, 1996 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                   |
| 10.2             |   | 1988      Stock Plan (filed as Exhibit 10(g) to the Company’s Annual Report on Form      10-K for the fiscal year ended December 31, 1988 and incorporated herein      by reference).                                                                                                                                                                                                                                                                                                                                                 |
| 10.3             |   | 1989      Non-Employee Directors Stock Option Plan (filed as Exhibit 10.1 to the      Company’s  registration statement on Form S-8 filed October 22,      1996 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                      |
| 10.18            |   | 1988      Stock Plan as amended (filed as Exhibit 10(a) to the Company’s Form 10-Q      for the quarterly period ended March 31, 1997 and incorporated herein by      reference).                                                                                                                                                                                                                                                                                                                                                     |
| 10.19            |   | Asset      Purchase Agreement, dated as of June 19, 1998, by and among the Company,      Epworth Manufacturing Company and Morehouse-COWLES, Inc. (filed as Exhibit      2.1 to Schedule 13D of Bret A. Lewis, File No. 005-35850, and incorporated      herein by Reference).                                                                                                                                                                                                                                                              |
| 10.20            |   | Stockholders      Agreement, dated August 14, 1998, by and among the Company and J.B.      Jennings and Bret A. Lewis (filed as Exhibit 2.2 to Schedule 13D of Bret      A. Lewis, File No. 005-35850, and incorporated herein by      reference).                                                                                                                                                                                                                                                                                          |
| 10.21            |   | $500,000      Subordinated Promissory Note issued by the Company to Epworth      Manufacturing Company (filed as Exhibit 99.2 to the Company’s Form 8-K on      August 27, 1998, File No. 000-11625, and incorporated herein by      reference).                                                                                                                                                                                                                                                                                      |
| 10.22            |   | $300,000      Subordinated Promissory Note issued by the Company to Epworth      Manufacturing Company (filed as Exhibit 99.2 to the Company’s Form 8-K on      August 27, 1998, File No. 000-11625, and incorporated herein by      reference).                                                                                                                                                                                                                                                                                      |
| 10.32            |   | Subordinated      Promissory Note on the Company in favor of Lake Shore Industries, Inc. in      the amount of $300,000.00 dated February 28, 2000.  (Filed as      Exhibit 10.35 to the Company’s Annual Report on Form 10-K for the fiscal      year ended December 31, 2000, and incorporated herein by      reference.)                                                                                                                                                                                                 |
| 10.33            |   | Settlement      Agreement, dated January 17, 2000 by and among the Company, Bret A. Lewis,      J. B. Jennings, Lake Shore Industries, Inc., and JLJ Properties, Inc.,      with $300,000 Subordinated Promissory Note dated February 28, 2000, issued      by the Company to Lake Shore Industries, Inc. (FKA Epworth Manufacturing      Company, Inc).  (Filed as Exhibit 10.37 to the Company’s Annual      Report on Form 10-K for the fiscal year ended December 31, 2000, and      incorporated herein by reference.) |
| 10.42            |   | Lease      for 30 Ossipee Road, Newton, Massachusetts dated October 19, 2001, between      Microfluidics International Corporation and King Real Estate Corp.,      Trustee of 1238 Chestnut Street Trust under Declaration of Trust dated May      23, 1969, recorded with Middlesex South Registry of Deeds in Book 11682,      Page 384.  (Filed as Exhibit 10.47 to the Company’s Annual      Report on Form 10-K for the fiscal year ended December 21, 2001, and      incorporated herein by reference.)              |
| 10.45            |   | Second      Amendment to Revolving Credit and Term Loan Agreement between the Company      and PNC Bank, N.A. dated March 29, 2002.  (Filed as Exhibit      10.50 to the Company’s Annual Report on Form 10-K for the fiscal year      ended December 31, 2001, and incorporated herein by      reference.)                                                                                                                                                                                                                 |
| 10.46            |   | 1986      Employee Stock Purchase Plan as Amended (Filed as Exhibit 10.51 to the      Company’s Annual Report on Form 10-K for the fiscal year ended December      31, 2001, and incorporated herein by reference.)                                                                                                                                                                                                                                                                                                                   |
| 10.47            |   | 1988      Stock Plan as Amended.  (Filed as Exhibit 10.52 to the Company’s      Annual Report on Form 10-K for the fiscal year ended December 31, 2001,      and incorporated herein by reference.)                                                                                                                                                                                                                                                                                                                         |
| 10.49            |   | Third      Amendment to Revolving Credit and Term Loan Agreement between the Company      and PNC Bank N.A. dated February 19, 2003. (Filed as Exhibit 10.54 to the      Company’s Annual Report on Form 10-K for the fiscal year ended December      31, 2002, and incorporated herein by reference)                                                                                                                                                                                                                                 |
| 10.50            |   | Fourth      Amendment and Waiver to Revolving Credit and Term Loan Agreement between      the Company and PNC Bank, N.A. dated February 6, 2004 (filed as Exhibit      10.54 to the Company’s Annual Report on Form 10-K for the fiscal year      ended December 31, 2003, and incorporated herein by      reference).                                                                                                                                                                                                                |
| 10.51            |   | Asset      Purchase Agreement dated February 5, 2004, by and among MFIC Corporation      and Morehouse Cowles, Inc. (filed as Exhibit 2 to the Company’s Form 8K      dated February 13, 2004, and incorporated herein by      reference).                                                                                                                                                                                                                                                                                            |
| 10.52            |   | Revolving      Line of Credit Note in the amount of $1,000,000 in favor of Banknorth,      N.A. dated March 3, 2004 (Filed as Exhibit 10.56 to the Company’s Annual      Report on Form 10-K for the fiscal year ended December 31, 2003, and      incorporated herein by reference).                                                                                                                                                                                                                                                 |
| 10.54            |   | Secured      Term Note in the amount of $1,000,000 in favor of Banknorth, N.A. dated      March 3, 2004 (Filed as Exhibit 10.58 to the Company’s Annual Report on      Form 10-K  for the fiscal year ended December 31, 2003, and      incorporated herein by reference).                                                                                                                                                                                                                                                  |
| 10.55            |   | Loan      and Security Agreement between Banknorth, N.A. and the Company dated March      3, 2004 (Filed as Exhibit 10.59 to the Company’s Annual Report on Form      10-K  for the fiscal year ended December 31, 2003, and      incorporated herein by reference).                                                                                                                                                                                                                                                        |
| 10.56            |   | Trademark      Security Agreement of the Company in favor of Banknorth, N.A., dated March      3, 2004 (Filed as Exhibit 10.60 to the Company’s Annual Report on Form      10-K  for the fiscal year ended December 31, 2003, and      incorporated herein by reference).                                                                                                                                                                                                                                                   |
| 10.57            |   | Patent      Security Agreement of the Company in favor of Banknorth, N.A., dated March      3, 2004 (Filed as Exhibit 10.61 to the Company’s Annual Report on Form      10-K for the fiscal year ended  December 31, 2003, and      incorporated herein by reference).                                                                                                                                                                                                                                                      |
| 10.58            |   | Placement      Agency Agreement between the Company and Casimir Capital L.P. dated      February 13, 2004 (Filed as Exhibit 10.62 to the Company’s Annual Report      on Form 10-K  for the fiscal year ended December 31, 2003, and      incorporated herein by reference).                                                                                                                                                                                                                                                |
| 10.59            |   | First      Amendment to Placement Agency Agreement between the Company and Casimir      Capital L.P. dated March 12, 2004 (Filed as Exhibit 10.63 to the Company’s      Annual Report on Form 10-K  for the fiscal year ended December      31, 2003, and incorporated herein by reference).                                                                                                                                                                                                                                |
| 10.60            |   | Registration      Rights Agreement between the Company and Purchasers dated March 16, 2004      (Filed as Exhibit 10.64 to the Company’s Annual Report on Form      10-K  for the fiscal year ended December 31, 2003, and      incorporated herein by reference).                                                                                                                                                                                                                                                          |
| 10.61            |   | Lease      between ABB and MFIC Corporation dated April 1, 2004 for space at      Lampertheim, Germany (filed as Exhibit 10.65 to the Company’s Annual      Report on Form 10-K  for the fiscal year ended December 31, 2004      and incorporated herein by reference).                                                                                                                                                                                                                                                    |
| 10.62            |   | Letter      Agreement between Maxim Group LLC and MFIC Corporation dated November 17,      2004 to provide general financial advisory and investment banking services      to the Company (filed as Exhibit 10.66 to the Company’s Annual Report on      Form 10-K  for the fiscal year ended December 31, 2004 and      incorporated herein by reference).                                                                                                                                                                 |
| 10.63            |   | Research      Collaboration Agreement between University of Massachusetts, Lowell and      MFIC Corporation, dated September 21, 2005 (filed as Exhibit 10.63 to the      Company’s Annual Report on Form 10-K for the fiscal year ended December      31, 2005, and incorporated herein by reference).                                                                                                                                                                                                                               |
| 10.64            |   | Warrant      issued to Maxim Group LLC dated April 1, 2005 (filed as Exhibit 10.64 to      the Company’s Annual Report on Form 10-K for the fiscal year ended      December 31, 2005, and incorporated herein by  reference).                                                                                                                                                                                                                                                                                                         |
| 10.65            |   | Form      of Warrant issued to placement agent under the Placement Agency Agreement      (filed as Exhibit 4.2 to the Company’s Annual Report on Form 10-K for the      fiscal year ended December 31, 2003 and incorporated herein by      reference).                                                                                                                                                                                                                                                                               |
| 10.66            |   | Form      of Warrant issued to investors in the private placement described in the      Placement Agency Agreement (filed as Exhibit 4.3 to the Company’s Annual      Report on Form 10-K for the fiscal year ended December 31, 2003 and      incorporated herein by reference).                                                                                                                                                                                                                                                     |
| 10.67            |   | 2006      Stock Plan (filed as Exhibit 10.1 to the Company’s Form 8-K on August 11,      2006 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.68            |   | Letter Agreement      between MFIC Corporation and Maxim Group LLC dated February 24, 2006      concerning the warrant issued to Maxim Group LLC. (filed as Exhibit      10.68 to the Company’s Annual Report on Form 10-K for the fiscal year      ended December 31, 2006 and incorporated herein byreference).                                                                                                                                                                                                                |
| 10.69            |   | Lease      for 30 Ossipee Road, Newton, Massachusetts dated November 6, 2006, between      MFIC Corporation and King Real Estate Corp., Trustee of 1238 Chestnut      Street Trust under Declaration of Trust dated May 23, 1969, recorded with      Middlesex South Registry of Deeds in Book 11682, Page 384. (filed as Exhibit      10.69 to the Company’s Annual Report on Form 10-K for the fiscal year      ended December 31, 2006 and incorporated herein by      reference).                                                 |
| 10.70            |   | TD      Banknorth Loan Modification Agreement dated November 20, 2006. (filed as      Exhibit 10.70 to the Company’s Annual Report on Form 10-K for the fiscal      year ended December 31, 2006 and incorporated herein by      reference).                                                                                                                                                                                                                                                                                          |
| 10.71            |   | Letter      Agreement between MFIC Corporation and Maxim Group LLC dated March 23,      2007 concerning the warrant issued to Maxim Group LLC. (filed as Exhibit      10.71 to the Company’s Annual Report on Form 10-K for the fiscal year      ended December 31, 2006 and incorporated herein by    reference).                                                                                                                                                                                                                    |
| 10.72       |   | Executive      Employment Agreement by and between the Company and Irwin J. Gruverman      dated as of April 6, 2007 (filed as Exhibit 10.1 to the Company’s Form 8-K      on April 12, 2007 and incorporated herein byreference).                                                                                                                                                                                                                                                                                                    |
| 10.73            |   | Executive      Employment Agreement by and between the Company and Robert P. Bruno dated      as of April 26, 2007 (filed as Exhibit 10.1 to the Company’s Form 8-K on      May 2, 2007 and incorporated herein by reference                                                                                                                                                                                                                                                                                                          |
| 10.74            |   | Executive      Employment Agreement by and between the Company and Dennis Riordan dated      as of April 26, 2007 (filed as Exhibit 10.2 to the Company’s Form 8-K on      May 2, 2007 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                         |
| 10.75            |   | Executive      Employment Agreement by and between the Company and Jack M. Swig dated as      of April 26, 2007 (filed as Exhibit 10.3 to the Company’s Form 8-K on May      2, 2007 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                           |
| 10.76            |   | Resignation      letter dated September 17, 2007 from Irwin J. Gruverman to the Company      (filed as Exhibit 10.1 to the Company’s Form 8-K on September 20, 2007 and      incorporated herein by reference).                                                                                                                                                                                                                                                                                                                       |
| 10.77            |   | Resignation      Agreement dated September 17, 2007 by and between Irwin J. Gruverman and      the Company (filed as Exhibit 10.2 to the Company’s Form 8-K on September      20, 2007 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                         |
| 10.78            |   | Affirmation      and Release Agreement dated September 17, 2007 by and between Irwin J.      Gruverman and the Company (filed as Exhibit 10.3 to the Company’s Form 8-K      on September 20, 2007 and incorporated herein by    reference).                                                                                                                                                                                                                                                                                          |
| 10.79            |   | Employment      Agreement dated as of November 14, 2007 by and between Michael C. Ferrara      and the Company (filed as Exhibit 10.1 to the Company’s Form 8-K on      November 19, 2007 and incorporated herein byreference).                                                                                                                                                                                                                                                                                                       |
| 10.80            |   | Lease      for 17755 Sky Park East, Suite 100, Irvine, CA, 92614 between MFIC      Corporation and The Knoll Company dated November 28, 2007 (filed as      Exhibit 10.80 to the Company’s Form 10-K on March 21, 2008 and      incorporated herein by reference).                                                                                                                                                                                                                                                                    |
| 10.81            |   | Banknorth,      N.A. waiver letter dated March 5, 2008 (filed as exhibit 10.81 to the      Company's form 10-K on March 21, 2008 and incorporated herein by      reference)                                                                                                                                                                                                                                                                                                                                                                 |
| 10.82            |   | Letter      dated May 19, 2008 from MFIC Corporation to Brian E. LeClair (filed as      Exhibit 10.1 to the Company’s Form 8-K on June 10, 2008 and incorporated      herein by reference).                                                                                                                                                                                                                                                                                                                                           |
| 10.83            |   | Loan      and Security Agreement, dated as of June 30, 2008, between Silicon      Valley Bank, Microfluidics International Corporation and Microfluidics      Corporation (filed as Exhibit 10.1 to the Company’s Form 8-K on July 7,      2008 and incorporated herein by reference).                                                                                                                                                                                                                                      |
| 10.84            |   | Intellectual      Property Security Agreement, dated as of June 30, 2008, by and      between Microfluidics International Corporation and Silicon Valley Bank      (filed as Exhibit 10.2 to the Company’s Form 8-K on July 7, 2008 and      incorporated herein by reference).                                                                                                                                                                                                                                                  |
| 10.85            |   | Letter      from Microfluidics International Corporation and Microfluidics Corporation      to Silicon Valley Bank, dated June 30, 2008 (filed as Exhibit 10.3 to      the Company’s Form 8-K on July 7, 2008 and incorporated herein by      reference).                                                                                                                                                                                                                                                                        |
| 10.86            |   | Security      Agreement, dated June 30, 2008, executed by Microfluidics      International Corporation in favor of TD Bank, N.A. (filed as Exhibit 10.4      to the Company’s Form 8-K on July 7, 2008 and incorporated herein by      reference).                                                                                                                                                                                                                                                                               |
| 10.87            |   | Export-Import      Bank Loan and Security Agreement, dated as of July 2, 2008, among      Silicon Valley Bank, Microfluidics International Corporation and      Microfluidics Corporation (filed as Exhibit 10.5 to the Company’s Form 8-K      on July 7, 2008 and incorporated herein by reference).                                                                                                                                                                                                                           |
| 10.88            |   | Export-Import      Bank Loan and Security Agreement, dated as of July 2, 2008, among      Silicon Valley Bank, Microfluidics International Corporation and      Microfluidics Corporation (filed as Exhibit 10.6 to the Company’s Form 8-K      on July 7, 2008 and incorporated herein by reference).                                                                                                                                                                                                                           |
| 10.89            |   | Promissory      Note (Export-Import), dated July 2, 2008, by and between      Microfluidics International Corporation and Microfluidics Corporation in      favor of Silicon Valley Bank (filed as Exhibit 10.7 to the Company’s Form      8-K on July 7, 2008 and incorporated herein by  reference).                                                                                                                                                                                                                           |
| 10.90            |   | First      Loan Modification Agreement, dated as of July 2, 2008, by and between      Silicon Valley Bank, Microfluidics International Corporation and      Microfluidics Corporation (filed as Exhibit 10.8 to the Company’s Form 8-K      on July 7, 2008 and incorporated herein by reference).                                                                                                                                                                                                                               |
| 10.91            |   | Amended      and Restated Loan and Security Agreement, dated as of October 20,      2008, among Silicon Valley Bank, Microfluidics International Corporation      and Microfluidics Corporation (filed as Exhibit      10.1 to the Company’s Form 8-K on October 24, 2008 and incorporated herein      by reference).                                                                                                                                                                                                            |
| 10.92            |   | Amended      and Restated Export-Import Bank Loan and Security Agreement, dated as of      October 20, 2008, among Silicon Valley Bank, Microfluidics      International Corporation and Microfluidics Corporation (filed as Exhibit      10.2 to the Company’s Form 8-K on October 24, 2008 and incorporated herein      by reference).                                                                                                                                                                                         |
| 10.93            |   | Promissory      Note (Export-Import), dated October 20, 2008, made by Microfluidics      International Corporation in favor of Silicon Valley Bank (filed as Exhibit      10.3 to the Company’s Form 8-K on October 24, 2008 and incorporated herein      by reference).                                                                                                                                                                                                                                                         |
| 10.94            |   | Promissory      Note (Export-Import), dated October 20, 2008, made by Microfluidics      Corporation in favor of Silicon Valley Bank (filed as Exhibit      10.4 to the Company’s Form 8-K on October 24, 2008 and incorporated herein      by reference).                                                                                                                                                                                                                                                                       |
| 10.95            |   | Debenture      and Warrant Purchase Agreement between Microfluidics International      Corporation and Global Strategic Partners, LLC, dated as of November 14,      2008 (filed as Exhibit      10.1 to Amendment No. 1 to the Company’s Form S-3 on January 19, 2009 and      incorporated herein by reference).                                                                                                                                                                                                               |
| 10.96            |   | Amendment      No. 1 to Debenture and Warrant Purchase Agreement and Amendment No. 1 to      Convertible Debenture, between Microfluidics International Corporation and      Global Strategic Partners, LLC, dated as of November 17, 2008 (filed as Exhibit      10.2 to Amendment No. 1 to the Company’s Form S-3 on January 19, 2009 and      incorporated herein by reference).                                                                                                                                              |
| 10.97            |   | Registration      Rights Agreement between Microfluidics International Corporation and      Global Strategic Partners, LLC, dated as of November 14, 2008 and amended      on December 3, 2008 (filed as Exhibit      10.3 to Amendment No. 1 to the Company’s Form S-3 on January 19, 2009 and      incorporated herein by reference).                                                                                                                                                                                               |
| 10.98            |   | Security      Agreement between Microfluidics International Corporation and Global      Strategic Partners, LLC, dated as of November 14, 2008 (filed as Exhibit      10.4 to Amendment No. 1 to the Company’s Form S-3 on January 19, 2009 and      incorporated herein by reference).                                                                                                                                                                                                                                          |
| 10.99            |   | Convertible      Debenture issued by Microfluidics International Corporation to Global      Strategic Partners, LLC, dated as of November 14, 2008, as amended (filed as Exhibit      10.5 to Amendment No. 1 to the Company’s Form S-3 on January 19, 2009 and      incorporated herein by reference).                                                                                                                                                                                                                               |
| 10.100           |   | Common      Stock Purchase Warrant issued by Microfluidics International Corporation      to Global Strategic Partners, LLC, dated as of November 14,      2008 (filed as Exhibit      10.6 to Amendment No. 1 to the Company’s Form S-3 on January 19, 2009 and      incorporated herein by reference).                                                                                                                                                                                                                         |
| 14               |   | Code      of Ethics, as adopted by the Company (Filed as Exhibit 14 to the Company’s      Form 10-K dated December 31, 2006, and incorporated herein by      reference.)                                                                                                                                                                                                                                                                                                                                                              |
| 21               |   | Subsidiary      of the Company, Microfluidics Corporation, a Delaware      corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 23(a)*           |   | Consent      of UHY LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 31.1*            |   | Certification      of Principal Executive Officer pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 31.2*            |   | Certification      of Principal Financial Officer pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 32.1*            |   | Certification      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted      pursuant to Section 906 of the Sarbanes-Oxley Act of  2002.                                                                                                                                                                                                                                                                                                                                                                               |
| 32.2*            |   | Certification      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted      pursuant to Section 906 of the Sarbanes-Oxley Act of  2002.                                                                                                                                                                                                                                                                                                                                                                               |
|             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|             |   | *      Filed herewith.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

----

| Signature                              |   | Title                                                     |   | Date                |
|----------------------------------------|--------|-----------------------------------------------------------|--------|---------------------|
| /s/      Michael  C. Ferrara |   |                                                      |   |                |
| Michael      C. Ferrara                |   | President,      Chief Executive Officer & Director    |   | March      30, 2009 |
|                                   |   | (principal      executive officer)                        |   |                |
|                                   |   |                                                      |   |                |
|                                   |   |                                                      |   |                |
|                                   |   |                                                      |   |                |
| /s/      Brian E. LeClair              |   |                                                      |   |                |
| Brian      E. LeClair                  |   | Executive      Vice-President and Chief Financial Officer |   | March      30, 2009 |
|                                   |   | (principal      financial and accounting officer)         |   |                |
|                                   |   |                                                      |   |                |
|                                   |   |                                                      |   |                |
| /s/      James N. Little               |   |                                                      |   |                |
| James      N. Little                   |   | Director                                                  |   | March      30, 2009 |
|                                   |   | Chairman      of the Board of Directors                   |   |                |
|                                   |   |                                                      |   |                |
| /s/      Leo Pierre Roy                |   |                                                      |   |                |
| Leo      Pierre Roy                    |   | Director                                                  |   | March      30, 2009 |
|                                   |   |                                                      |   |                |
|                                   |   |                                                      |   |                |
| /s/      George Uveges                 |   |                                                      |   |                |
| George      Uveges                     |   | Director                                                  |   | March      30, 2009 |
|                                   |   |                                                      |   |                |
|                                   |   |                                                      |   |                |
| /s/      Eric G. Walters               |   |                                                      |   |                |
| Eric      G. Walters                   |   | Director                                                  |   | March      30, 2009 |
|                                   |   |                                                      |   |                |

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