##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-KSB
  ANNUAL
    REPORT UNDER SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
  For the fiscal year ended December 31, 2006
  Commission
    file number: 0-28288
      Cardiogenesis
    Corporation
 (Name of small business issuer
    in its charter)
  California(State or other
    jurisdiction of
    incorporation or organization)

77-0223740(I.R.S. Employer 
    Identification Number)11 Musick, Irvine, CA(Address of principal
    executive offices)

92618Zip
    Code   (949) 420-1800
 (Issuers telephone number)
      Securities registered under Section 12(g) of the
    Exchange Act:
  Common Stock, no par value
 (Title of Class)
        þ o
  Regulation S-B Form 10-KSB Form 10-KSB. þ
  Rule 12b-2
  o þ
        DOCUMENTS
    INCORPORATED BY REFERENCE:
  Form 10-KSB:
    o þ




---



##### 



INDEX TO
    FORM 10-KSB
  PagePART IItem 1.

Description of
    Business


1Item 2.

Description of
    Property


24Item 3.

Legal
    Proceedings


24PART
    IIItem 5.

Market for Common
    Equity and Related Shareholder Matters


25Item 6.

Managements
    Discussion and Analysis or Plan of Operation


26Item 7.

Financial
    Statements


33Item 8.

Changes In and
    Disagreements With Accountants on Accounting and Financial
    Disclosure


33Item 8A.

Controls and
    Procedures


33Item 8B.

Other
    Information


34PART
    IIIItem 9.

Directors,
    Executive Officers, Promoters, Control Persons and Corporate
    Governance; Compliance With Section 16(a) of the Exchange
    Act


34Item 10.

Executive
    Compensation


34Item 11.

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


34Item 12.

Certain
    Relationships and Related Transactions, and Director
    Independence


34Item 13.

Exhibits


35Item 14.

Principal
    Accountant Fees and Services


37Signatures


38EXHIBIT 10.14EXHIBIT 10.15EXHIBIT 10.16EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1




---



##### Table of Contents



PART I  Item 1.
    Description
    of Business.  This Annual Report on
    Form 10-KSB
    contains forward-looking statements that involve risks and
    uncertainties. The statements contained herein that are not
    purely historical are forward-looking statements within the
    meaning of Section 27A of the Securities Act and
    Section 21E of the Exchange Act, including without
    limitation statements regarding our expectations, beliefs,
    intentions or strategies regarding the future. All
    forward-looking statements included in this document or
    incorporated by reference herein are based on information
    available to us on the date hereof, and we assume no obligation
    to update any such forward-looking statements. Our actual
    results could differ materially from those anticipated in these
    forward-looking statements as a result of certain factors,
    including those set forth in Risk Factors below.
  Business
    Overview
         1




---



##### Table of Contents



Background
  and/or
             2




---



##### Table of Contents



The TMR
    and PMC Procedures
      Business
    Strategy
    
    Add Innovative New Technology to our Product
    Offering.  Our focus is to add innovative new
    tools to help address ischemia associated with advanced
    cardiovascular disease and related co-morbidities of patients
    being referred today to cardiovascular surgery. We are committed
    to growing the TMR business with the Advanced TMR Plus platform
    which includes two new minimally invasive handpieces for
    thoracoscopic and robotic assisted TMR. These new products were
    developed with key clinical champions to expand the TMR market.
    We are also committed to identifying potential new products in
    the cardiovascular arena. These two new products are currently
    under IDE clinical study in support of the PMA applications with
    the FDA.
    Expand Market for our Products.  We are seeking
    to expand market awareness of our products among opinion leaders
    in the cardiovascular field, the referring physician community
    and the targeted patient population. We also currently intend to
    expand our marketing efforts in Europe and to the rest of the
    world through the establishment of direct international sales
    and support and third party distributors and agents. In
    addition, we continue to advance and improve our comprehensive
    training program to assist physicians in acquiring the expertise
    necessary to utilize our products and procedures.
    Leverage Proprietary Technology.  We believe
    that our significant expertise in laser and catheter-based
    systems for the treatment of ischemia related to advanced
    cardiovascular disease and the proprietary technologies we have
    developed are important factors in our efforts to demonstrate
    the safety and effectiveness of our procedures. We are seeking
    to develop additional proprietary technologies and maintain
    multiple U.S. and foreign patents and have multiple U.S. and
    foreign patent applications pending relating to various aspects
    of cardiovascular related devices and therapies.  Products
    and Technology
  TMR
    System
   3




---



##### Table of Contents



SolarGen 2100s laser system.
  TMR 2000 laser system.
  SoloGrip III.
  PMC
    System
    PMC Laser.
  Axcis Catheter System. over-the-wire
  New
    Product Pipeline
  PEARL Robotic 5.0 and Thoracoscopic 8.0 Minimally Invasive
    Delivery Systems.
 4




---



##### Table of Contents



Phoenix Combination Delivery System.
  Regulatory
    Status
  United States.
      European Union.
  Sales and
    Marketing
   5




---



##### Table of Contents



one-day
    Research
    and Development
      Manufacturing
      Competition
   6




---



##### Table of Contents



Government
    Regulation
     7




---



##### Table of Contents



8




---



##### Table of Contents



Intellectual
    Property Matters
       9




---



##### Table of Contents



Third
    Party Reimbursement
       10




---



##### Table of Contents



Product
    Liability and Insurance
    Employees
    Executive
    Officers
    Name

Age

PositionRichard P. Lanigan


47


PresidentWilliam R. Abbott


50


Senior Vice President, Chief
    Financial Officer, Secretary and TreasurerCharles J. Scarano


45


Senior Vice President of Marketing
    and Business DevelopmentGerard A. Arthur


48


Senior Vice President of OperationsJohn P. McIntyre


41


Vice President of Scientific and
    Regulatory Affairs   Richard P. Lanigan
 11




---



##### Table of Contents



William R. Abbott Coca-Cola
  Charles J. Scarano
  Gerard A. Arthur
  John P. McIntyre
  Risk
    Factors
    Our
    ability to maintain current operations is dependent upon
    achieving profitable operations or obtaining financing in the
    future.
   12




---



##### Table of Contents




    if commercial adoption of our TMR laser systems by healthcare
    providers in the United States declines;
    if we are unable to achieve approval and commercialization of
    additional new products or therapies; and
    for an uncertain period of time after such approvals are
    obtained.  We may
    not be able to successfully market our products if third party
    reimbursement for the procedures performed with our products is
    not available for our health care provider
    customers.
           13




---



##### Table of Contents



If we
    pursue FDA approval of our PMC laser system, we may fail to
    obtain required regulatory approvals in the United States to
    market our PMC laser system.
            We may
    fail to obtain required regulatory approvals in the United
    States to market our new minimally invasive and robotically
    assisted handpieces.
   14




---



##### Table of Contents



In the
    future, the FDA could restrict the current uses of our TMR
    product and thereby restrict our ability to generate
    revenues.
    We
    must comply with FDA manufacturing standards or face fines or
    other penalties including suspension of
    production.
    
    fines, injunctions, and civil penalties;
    recalls or seizures of products;
    total or partial suspensions of production; and
    criminal prosecutions.    We may
    fail to comply with international regulatory requirements and
    could be subject to regulatory delays, fines or other
    penalties.
    
    delays in receipt of, or failure to receive, foreign regulatory
    approvals or clearances;
    the loss of previously obtained approvals or clearances; or
    the failure to comply with existing or future regulatory
    requirements.     15




---



##### Table of Contents



We may
    not be able to meet future product demand on a timely basis and
    may be subject to delays and interruptions to product shipments
    because we depend on single source third party suppliers and
    manufacturers.
      
    if materials and products obtained from outside suppliers and
    manufacturers will always be available in adequate quantities to
    meet our future needs; or
    whether replacement suppliers
    and/or
    manufacturers can be qualified on a timely basis if our current
    suppliers
    and/or
    manufacturers are unable to meet our needs for any reason.  Expansion
    of our business may put added pressure on our management and
    operational infrastructure affecting our ability to meet any
    increased demand for our products and possibly having an adverse
    effect on our operating results.
    
    the dependence on the growth of the market for our currently
    approved and reimbursed products;
    our ability to successfully expand sales to potential customers
    and increasing clinical adoption of the TMR procedure;
    domestic and international regulatory developments;
    rapid technological change;
    the highly competitive nature of the medical devices
    industry; and
    the risk of entering emerging markets in which we have limited
    or no direct experience.   16




---



##### Table of Contents



Our
    operating results are expected to fluctuate and
    quarter-to-quarter
    comparisons of our results may not indicate future
    performance.
  quarter-to-quarter quarter-to-quarter quarter-to-quarter
  Potential
    acquisitions or strategic relationships may be more costly or
    less profitable than anticipated and may adversely affect the
    price of our company stock.
    Until
    May 2006, our stock was listed on the OTC Bulletin Board
    and is currently listed on the Pink Sheets which, in either
    case, may have an unfavorable impact on our stock price and
    liquidity.
      Penny
    stock regulations may impose certain restrictions on
    marketability of our stock.
   17




---



##### Table of Contents



The
    trading prices of many high technology companies, and in
    particular medical device companies, have been volatile which
    may result in large fluctuations in the price of our common
    stock.
    The
    price of our common stock may fluctuate significantly, which may
    result in losses for investors.
  52-week
  
    actual or anticipated variations in our quarterly operating
    results;
    the timing and amount of conversions and subsequent sales of
    common stock issuable upon conversion of outstanding convertible
    promissory notes and warrants;
    announcements of technological innovations or new products or
    services by us or our competitors;
    announcements relating to strategic relationships or
    acquisitions;
    additions or terminations of coverage of our common stock by
    securities analysts;
    statements by securities analysts regarding us or our industry;
    conditions or trends in the medical device industry;
    the lack of liquidity in the market for our common
    stock; and
    changes in the economic performance
    and/or
    market valuations of other medical device companies.    We
    face competition from products of our competitors which could
    limit market acceptance of our products and render our products
    obsolete.
      
    are more effective than our products; 18




---



##### Table of Contents




    are more effectively marketed than our products; or
    may render our products or technology obsolete.    
    develop products;
    complete clinical testing and regulatory approval processes;
    obtain third party reimbursement acceptance; and
    supply adequate quantities of the product to the market.  Third
    party intellectual property rights may limit the development and
    protection of our intellectual property, which could adversely
    affect our competitive position.
    
    obtain patent protection for our products and processes;
    preserve our trade secrets and proprietary technology; and
    operate without infringing upon the patents or proprietary
    rights of third parties.      Costly
    litigation may be necessary to protect intellectual property
    rights.
      
    enforce our issued patents;
    protect our trade secrets or know-how; or
    determine the enforceability, scope and validity of the
    proprietary rights of others.    
    subject us to significant liabilities to third parties; 19




---



##### Table of Contents




    require us to seek licenses from third parties;
    prevent us from selling our products in certain markets or at
    all; or
    require us to modify our products.        We
    rely on patent and trade secret laws, which are complex and may
    be difficult to enforce.
      
    have not developed or will not develop similar products;
    will not duplicate our products; or
    will not design around any patents issued to or licensed by us.    
    others did not first file applications for inventions covered by
    our pending patent applications; or
    we will not infringe any patents that may issue to others on
    such applications.  We may
    suffer losses from product liability claims if our products
    cause harm to patients.
     20




---



##### Table of Contents



Our
    insurance may be insufficient to cover product liability claims
    against us.
        We
    depend heavily on key personnel and turnover of key employees
    and senior management could harm our business.
    We
    sell our products internationally which subjects us to specific
    risks of transacting business in foreign
    countries.
    
    foreign currency fluctuations;
    economic or political instability;
    foreign tax laws;
    shipping delays;
    various tariffs and trade regulations;
    restrictions and foreign medical regulations;
    customs duties, export quotas or other trade
    restrictions; and
    difficulty in protecting intellectual property rights.  If an
    event of default occurs under the convertible note issued to
    Laurus, it could seriously harm our operations.
   21




---



##### Table of Contents




    A failure to pay interest and principal payments when due;
    a breach by us of any material covenant or term or condition of
    the note or any agreement made in connection therewith;
    a breach by us of any material representation or warranty made
    in the note or in any agreement made in connection therewith;
    if we make an assignment for the benefit of our creditors, or a
    receiver or trustee is appointed for us;
    any form of bankruptcy or insolvency proceeding is instituted by
    or against us and is not dismissed within 60 days;
    any money judgment entered or filed against us for more than
    $50,000 and remains unresolved for 30 days;
    our failure to timely deliver shares of common stock when due
    upon conversions of the note;
    we experience an event of default under any other debt
    obligations; and
    we experience a loss, damage or encumbrance upon collateral
    securing the Laurus debt which is valued at more than $100,000
    and is not timely mitigated.    We may
    continue to incur significant non-operating, non-cash charges
    resulting from changes in the fair value of warrants and
    derivatives.
     22




---



##### Table of Contents



The
    restrictions on our activities contained in the Laurus financing
    documents could negatively impact our ability to obtain
    financing from other sources.
    Low
    market prices for our common stock would result in greater
    dilution to our shareholders, and could negatively impact our
    ability to convert the Laurus debt into equity
    Future
    sales of our common stock could lower our stock
    price.
      Provisions
    of our certificate of incorporation as well as our rights
    agreement could discourage potential acquisition proposals and
    could deter or prevent a change of control.
   23




---



##### Table of Contents



Changes
    in, or interpretations of, accounting rules and regulations
    could result in unfavorable accounting charges.
    Recent
    rulemaking by the Financial Accounting Standards Board requires
    us to expense equity compensation given to our employees and
    could significantly harm our operating results and may reduce
    our ability to effectively utilize equity compensation to
    attract and retain employees.
    While
    we believe that we currently have adequate internal controls
    over financial reporting, we are exposed to risks from recent
    legislation requiring companies to evaluate those internal
    controls.
   Item 2.  Description
    of Property    Item 3.
    Legal
    Proceedings.   24




---



##### Table of Contents



PART II  Item 5.
    Market
    for Common Equity and Related Shareholder Matters.    write-up,
  2005

High


LowFirst Quarter

$
0.79


$
0.48Second Quarter

$
0.64


$
0.38Third Quarter

$
0.68


$
0.44Fourth Quarter

$
0.51


$
0.32   2006

High


LowFirst Quarter

$
0.61


$
0.33Second Quarter

$
0.59


$
0.16Third Quarter

$
0.50


$
0.35Fourth Quarter

$
0.45


$
0.27       Equity
    Compensation Plan Information
    (a)


(b)


(c)


(d)Number of Securities





Number of Securitiesto be Issued


Weighted Average


Remaining Available forUpon Exercise of


Exercise Price of


Issuance Under Equity


Total of SecuritiesOutstanding Options,


Outstanding Options,


Compensation Plans (Excluding


Reflected in ColumnsPlan Category

Warrants and Rights


Warrants and Rights


Securities Reflected in Column (a))


(a) and (c)Stock Option Plans Approved by
    Shareholders(1)


3,491,000


$
0.89



4,822,000



8,313,000Employee Stock Purchase Plan
    Approved by Shareholders(2)



(2)



(2)


267,743



267,743Equity Compensation Plans Not
    Approved by Shareholders(3)


6,015,000


$
0.97



N/A



6,015,000Total


9,506,000


$
0.94



5,089,743



14,595,743  25




---



##### Table of Contents



(1)
    
    Consists of the Cardiogenesis Corporation Stock Option Plan and
    Director Stock Option Plan.(2)
    
    Consists of the Cardiogenesis Corporation Employee Stock
    Purchase Plan. The Employee Stock Purchase Plan enables
    employees to purchase the Companys common stock at a 15%
    discount to the lower of market value at the beginning or end of
    each six month offering period. As such, the number of shares
    that may be issued pursuant to the Employee Stock Purchase Plan
    during a given six month period and the purchase price of such
    shares cannot be determined in advance.(3)
    
    Consists of 275,000 shares of common stock subject to
    warrants having exercise prices ranging from $0.35 to
    $0.44 per share issued to a lender in connection with a
    credit facility, 3,100,000 shares of common stock subject
    to warrants having an exercise price of $1.37 issued to
    investors in connection with a private equity offering, and
    2,640,000 shares of common stock subject to warrants having
    an exercise price of $0.50 per share issued to a lender in
    connection with a secured convertible note financing transaction.  Item 6.
    Managements
    Discussion and Analysis or Plan of Operation.  Form 10-KSB.
  Overview
       26




---



##### Table of Contents



Results
    of Operations
  Year
    Ended December 31, 2006 Compared to Year Ended
    December 31, 2005
  Net
    Revenues
            Gross
    Profit
    Research
    and Development
   27




---



##### Table of Contents



Sales,
    General and Administrative/Salaries and Employee
    Benefits
          Non-Operating
    Income (Expense)
   28




---



##### Table of Contents



Years Ended December 31,2006


2005


Change($ In thousands)Interest expense 
    Secured Convertible Term Note

$
(241
)

$
(444
)

$
203



(46
)%Interest expense 
    Secured Convertible Term Note prepayment penalty


(483
)






(483
)


100
%Interest expense  other


(57
)


(125
)


68



(54
)%Interest income


132



162



(30
)


(19
)%Gain on insurance settlement


70







70



100
%Non-cash interest
    expense  Accretion of discount on Note


(667
)


(827
)


160



(19
)%Non-cash interest
    expense  Amortization of debt issuance costs relating
    to the Note


(164
)


(200
)


36



(18
)%Non-cash interest
    expense  Loss on conversion of debt






(387
)


387



(100
)%Change in fair value of derivatives


613



2,100



(1,487
)


(71
)%Other non-cash income 
    Change in fair value of warrants


407



356



51



14
%Loss on disposal of assets


(111
)






(111
)


100
%Total interest (expense) income,
    net

$
(501
)

$
635


$
(1,136
)


179
%   Liquidity
    and Capital Resources
           29




---



##### Table of Contents



Critical
    Accounting Policies and Estimates
     30




---



##### Table of Contents



Revenue
    Recognition:
        Accounting for Leases
  No. 00-21, Revenue Arrangements with Multiple
    Deliverables.
  Accounts
    Receivable:
    Inventories:
  first-in,
 31




---



##### Table of Contents



Valuation
    of Long-lived Assets:
    Income
    Taxes:
    Recently
    Issued Accounting Standards
  Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109
  Stock-Based Compensation. Accounting for Stock Based Compensation No. 96-18, Accounting for Equity Instruments that are Issued to
    Other Than Employees for Acquiring, or in Conjunction with
    Selling, Goods and Services.
  Accounting for Stock
    Issued to Employees
  Share-Based Payment
 32




---



##### Table of Contents



Item 7.
    Financial
    Statements    Item 8.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.   Item 8A.  Controls
    and Procedures.  Evaluation
    of Disclosure Controls and Procedures
  Rule 13a-15(e) 15d-15(e)
  Remediation
    of Material Weakness in Internal Control
  Form 10-KSB, Forms 10-QSB,
       33




---



##### Table of Contents



Inherent
    Limitations on Effectiveness of Controls
    Changes
    in internal control over financial reporting
   Item 8B.  Other
    Information.   PART III  Item 9.
    Directors,
    Executive Officers, Promoters, Control Persons and Corporate
    Governance; Compliance With Section 16(a) of the Exchange
    Act.    Item 10.
    Executive
    Compensation.    Item 11.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Shareholder Matters.    Equity
    Compensation Plan Information
  Form 10-KSB
  Item 12.
    Certain
    Relationships and Related Transactions, and Director
    Independence   34




---



##### Table of Contents



Item 13.
    Exhibits.  EXHIBIT INDEX
  Exhibit No.

Description3
.1.1(1)

Restated Articles of
    Incorporation, as filed with the California Secretary of State
    on May 1, 19963
.1.2(2)

Certificate of Amendment of
    Restated Articles of Incorporation, as filed with California
    Secretary of State on July 18, 20013
.1.3(3)

Certificate of Determination of
    Preferences of Series A Preferred Stock, as filed with the
    California Secretary of State on August 23, 20013
.1.4(4)

Certificate of Amendment of
    Restated Articles of Incorporation, as filed with the California
    Secretary of State on January 23, 20043
.2(5)

Amended and Restated Bylaws4
.1(6)

Third Amendment to Rights
    Agreement, dated October 26, 2004, between the Company and
    Equiserve Trust Company N.A.4
.2(7)

Second Amendment to Rights
    Agreement, dated as of January 21, 2004, between
    Cardiogenesis Corporation and EquiServe Trust Company, N.A., as
    Rights Agent4
.3(8)

First Amendment to Rights
    Agreement, dated as of January 17, 2002, between
    Cardiogenesis Corporation and EquiServe Trust Company, N.A., as
    Rights Agent4
.4(9)

Rights Agreement, dated as of
    August 17, 2001, between Cardiogenesis Corporation and
    EquiServe Trust Company, N.A., as Rights Agent4
.5(10)

Securities Purchase Agreement,
    dated as of January 21, 2004, by and among Cardiogenesis
    Corporation and each of the investors identified therein4
.6(11)

Registration Rights Agreement,
    dated as of January 21, 2004, by and among Cardiogenesis
    Corporation and the investors identified therein4
.7(12)

Form of Common Stock Purchase
    Warrant, dated January 21, 2004, having an exercise price
    of $1.37 per share4
.8(13)

Securities Purchase Agreement,
    dated October 26, 2004, between the Company and Laurus
    Master Fund, Ltd.4
.9(14)

Secured Convertible Term Note,
    dated October 26, 2004, in favor of Laurus Master Fund, Ltd.4
.10(15)

Registration Rights Agreement,
    dated October 26, 2004, between the Company and Laurus
    Master Fund, Ltd.4
.11(16)

Common Stock Purchase Warrant,
    dated October 26, 2004, in favor of Laurus Master Fund, Ltd.4
.12(17)

Security Agreement, dated
    October 26, 2004, in favor of Laurus Master Fund, Ltd.10
.1(18)*

Form of Indemnification Agreement
    by and between the Company and each of its officers and directors10
.2(19)*

Stock Option Plan, as amended and
    restated July 200510
.3(20)*

Director Stock Option Plan, as
    amended and restated July 200510
.4(21)*

Employee Stock Purchase Plan, as
    amended and restated July 200510
.5(22)

Lease for the Companys
    executive offices in Irvine, California10
.6(23)*

401(k) Plan, as restated
    January 1, 200510
.8(24)*

Description of the Stock Option
    Plan10
.9(25)*

Description of the Director Stock
    Option Plan10
.10(26)*

Form of Stock Option Agreement for
    Executive Officers under the Stock Option Plan 35




---



##### Table of Contents



Exhibit No.

Description10
.11(27)*

Form of Grant Notice under the
    Stock Option Plan10
.12(28)*

Form of Stock Option Agreement for
    Directors under the Director Stock Option Plan10
.13(29)*

Form of Grant Notice under the
    Director Stock Option Plan10
.14(30)*

Settlement Agreement and General
    Release between the Registrant and Michael J. Quinn, dated
    October 24, 200610
.15(30)*

Summary of Director Compensation10
.16(30)*

Summary of Executive Compensation21
.1(30)

List of Subsidiaries23
.1(30)

Consent of KMJ/Corbin &
    Company LLP31
.1(30)

Certification of the President
    pursuant to
    Rule 13a-14(a)
    of Securities Exchange Act of 1934, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200231
.2(30)

Certification of the Chief
    Financial Officer pursuant to
    Rule 13a-14(a)
    of Securities Exchange Act of 1934, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200232
.1(30)

Certifications of the President
    and Chief Financial Officer pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002     *
    
    Management contract, compensatory plan or arrangement(1)
    
    Incorporated by reference to Exhibit 3.1 to the
    Registrants Registration Statement on
    Form S-1/A
    (File
    No. 33-03770),
    filed May 21, 1996(2)
    
    Incorporated by reference to Exhibit 3.2 to the
    Registrants Quarterly Report on
    Form 10-Q
    filed on August 14, 2001(3)
    
    Incorporated by reference to Exhibit 4.2 to the
    Registrants Current Report on
    Form 8-K
    filed on August 20, 2001(4)
    
    Incorporated by reference to Exhibit 3.1.4 to the
    Registrants Annual Report on
    Form 10-K
    filed on March 10, 2004(5)
    
    Incorporated by reference to Exhibit 3.2 to the
    Registrants Annual Report on
    Form 10-K
    filed on March 10, 2004(6)
    
    Incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on
    Form 8-K
    filed October 28, 2004(7)
    
    Incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on
    Form 8-K
    filed January 26, 2004(8)
    
    Incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on
    Form 8-K
    filed January 18, 2002(9)
    
    Incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on
    Form 8-K
    filed August 20, 2001(10)
    
    Incorporated by reference to Exhibit 4.4 to the
    Registrants Current Report on
    Form 8-K
    filed January 22, 2004(11)
    
    Incorporated by reference to Exhibit 4.5 to the
    Registrants Current Report on
    Form 8-K
    filed January 22, 2004(12)
    
    Incorporated by reference to Exhibit 4.6 to the
    Registrants Current Report on
    Form 8-K
    filed January 22, 2004(13)
    
    Incorporated by reference to Exhibit 4.2 to the
    Registrants Current Report on
    Form 8-K
    filed October 28, 2004(14)
    
    Incorporated by reference to Exhibit 4.3 to the
    Registrants Current Report on
    Form 8-K
    filed October 28, 2004(15)
    
    Incorporated by reference to Exhibit 4.4 to the
    Registrants Current Report on
    Form 8-K
    filed October 28, 2004(16)
    
    Incorporated by reference to Exhibit 4.5 to the
    Registrants Current Report on
    Form 8-K
    filed October 28, 2004(17)
    
    Incorporated by reference to Exhibit 4.6 to the
    Registrants Current Report on
    Form 8-K
    filed October 28, 2004(18)
    
    Incorporated by reference to the Companys Registration
    Statement on Form
    S-1 (File
    No. 333-03770),
    as amended, filed April 18, 1996(19)
    
    Incorporated by reference to Exhibit 10.2 of the
    Registrants Annual Report on
    Form 10-K
    filed on August 21, 2006(20)
    
    Incorporated by reference to Exhibit 10.3 of the
    Registrants Annual Report on
    Form 10-K
    filed on August 21, 2006(21)
    
    Incorporated by reference to Exhibit 10.4 of the
    Registrants Annual Report on
    Form 10-K
    filed on August 21, 2006(22)
    
    Incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 10-K
    filed August 25, 2006 36




---



##### Table of Contents



(23)
    
    Incorporated by reference to Exhibit 10.6 to the
    Registrants Annual Report on
    Form 10-K
    filed March 31, 2005(24)
    
    Incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K
    filed on August 4, 2005(25)
    
    Incorporated by reference to Exhibit 10.2 to the
    Registrants Current Report on
    Form 8-K
    filed on August 4, 2005(26)
    
    Incorporated by reference to Exhibit 10.3 to the
    Registrants Current Report on
    Form 8-K
    filed on August 4, 2005(27)
    
    Incorporated by reference to Exhibit 10.4 to the
    Registrants Current Report on
    Form 8-K
    filed on August 4, 2005(28)
    
    Incorporated by reference to Exhibit 10.5 to the
    Registrants Current Report on
    Form 8-K
    filed on August 4, 2005(29)
    
    Incorporated by reference to Exhibit 10.6 to the
    Registrants Current Report on
    Form 8-K
    filed on August 4, 2005(30)
    
    Filed herewith  Item 14.
    Principal
    Accountant Fees and Services.   37




---



##### Table of Contents



SIGNATURES  Pursuant to the requirements of Section 13 or 15(d) of
    the Securities Exchange Act of 1934, the Registrant has duly
    caused this report to be signed on its behalf by the
    undersigned, thereunto duly authorized.
    By:
    /s/  RICHARD
    P. LANIGAN   President
    Pursuant to the requirements of the Securities Exchange Act
    of 1934, this Report has been signed below by the following
    persons on behalf of the Registrant in the capacities and on the
    date indicated.
  Signature

Title

Date/s/  RICHARD
    P. LANIGANRichard
    P. Lanigan

President
    (Principal Executive Officer)

March 29, 2007/s/  WILLIAM
    R. ABBOTTWilliam
    R. Abbott

Senior Vice President, Chief
    Financial
    Officer, Secretary and Treasurer
    (Principal Financial and Accounting Officer)

March 29, 2007/s/  GARY
    S.
    ALLEN, M.D.Gary
    S. Allen, M.D.

Director

March 29, 2007/s/  ROBERT
    L. MORTENSENRobert
    L. Mortensen

Director

March 29, 2007/s/  MARVIN
    J.
    SLEPIAN, M.D.Marvin
    J. Slepian, M.D.

Director

March 29, 2007  38




---



##### Table of Contents



INDEX TO
    FINANCIAL STATEMENTS
  PageReport of
    Independent Registered Public Accounting Firm


F-2Consolidated
    balance sheet at December 31, 2006


F-3Consolidated
    statements of operations for the years ended December 31,
    2006, and 2005


F-4Consolidated
    statements of shareholders equity for the years ended
    December 31, 2006 and 2005


F-5Consolidated
    statements of cash flows for the years ended December 31,
    2006 and 2005


F-6Notes to
    consolidated financial statements


F-7  F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           Share-Based Payment.
  
    
 F-2




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION



CONSOLIDATED
    BALANCE SHEET

December 31,
    2006  (In thousands)ASSETSCurrent assets:Cash and cash equivalents

$
2,118Accounts receivable, net of
    allowance for doubtful accounts of $98


2,327Inventories, net of inventory
    reserve of $28


2,229Prepaids and other current assets


421Total current assets


7,095Property and equipment, net


617Other assets


63Total assets

$
7,775LIABILITIES AND
    SHAREHOLDERS
    EQUITYCurrent liabilities:Accounts payable

$
326Accrued liabilities


1,606Deferred revenue


1,332Current portion of note payable


89Current portion of capital lease
    obligation


11Current portion of secured
    convertible term note and related obligations, net


955Total current liabilities


4,319Capital lease obligation, less
    current portion


31Other long-term liability


137Total liabilities


4,487Commitments and contingenciesShareholders equity:Preferred stock:no par value; 5,000 shares
    authorized; none issued and outstanding


Common stock:no par value; 75,000 shares
    authorized; 45,274 shares issued and outstanding


173,401Accumulated deficit


(170,113
)Total shareholders equity


3,288Total liabilities and
    shareholders equity

$
7,775    F-3




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION



CONSOLIDATED
    STATEMENTS OF OPERATIONS

For the
    Years Ended December 31, 2006 and 2005  2006


2005(In thousands, except per share amounts)Net revenues

$
17,117


$
16,341Cost of revenues


3,644



2,998Gross profit


13,473



13,343Operating expenses:Research and development


1,474



1,725Salaries and employee benefits


7,784



7,442Sales, general and administrative


5,693



6,668Total operating expenses


14,951



15,835Operating loss


(1,478
)


(2,492
)Other (expense) income:Interest expense


(781
)


(569
)Interest income


132



162Gain on insurance settlement


70



Loss on disposal of fixed assets


(111
)


Non-cash interest expense


(831
)


(1,414
)Change in fair value of derivatives


613



2,100Other non-cash income


407



356Total other (expense) income


(501
)


635Net loss

$
(1,979
)

$
(1,857
)Net loss per share:Basic and diluted

$
(0.04
)

$
(0.04
)Weighted average shares
    outstanding:Basic and diluted


45,248



43,414    F-4




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION



CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY

For the
    Years Ended December 31, 2006 and 2005  Common Stock


AccumulatedShares


Amount


Deficit


Total(In thousands)Balances, December 31, 2004


41,500


$
171,012


$
(166,277
)

$
4,735Issuance of common stock pursuant
    to stock purchased under the Employee Stock Purchase Plan


273



126







126Issuance of common stock for
    option exercises


146



47







47Issuance of common stock related
    to conversions


3,183



1,815







1,815Net loss










(1,857
)


(1,857
)Balances, December 31, 2005


45,102



173,000



(168,134
)


4,866Issuance of common stock pursuant
    to stock purchased under the Employee Stock Purchase Plan


56











Issuance of common stock for
    option exercises


116



37







37Vesting of share-based awards






364







364Net loss










(1,979
)


(1,979
)Balances, December 31, 2006


45,274


$
173,401


$
(170,113
)

$
3,288    F-5




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION



CONSOLIDATED
    STATEMENTS OF CASH FLOWS

For the
    Years Ended December 31, 2006 and 2005  2006


2005(In thousands)Cash flows from operating
    activities:Net loss

$
(1,979
)

$
(1,857
)Adjustments to reconcile net loss
    to net cash provided by (used in) operating activities:Derivative and warrant fair value
    adjustments


(1,020
)


(2,456
)Amortization related to discount
    on notes payable


667



827Impairment of PLC license


730



Loss on disposal of fixed assets


111



Depreciation and amortization


667



512Loss on conversion of debt






387Provision for doubtful accounts


183



213Inventory reserves


147



Interest income on restricted cash


(39
)


Stock-based compensation expense


364



Amortization of other assets


195



194Amortization of debt issuance costs


164



200Gain on insurance settlement


(70
)


Changes in operating assets and
    liabilities:Accounts receivable


557



298Inventories


348



(1,070
)Prepaids and other current assets


280



488Other assets


20



19Accounts payable


(751
)


184Accrued liabilities


681



(43
)Deferred revenue


938



(264
)Net cash provided by (used in)
    operating activities


2,193



(2,368
)Cash flows from investing
    activities:Acquisition of property and
    equipment


(460
)


(687
)Insurance proceeds received


70



Net cash used in investing
    activities


(390
)


(687
)Cash flows from financing
    activities:Decrease in restricted cash, net
    of interest income






376Net proceeds from issuance of
    common stock from exercise of options and from stock purchased
    under the Employee Stock Purchase Plan


37



173Payments on short term borrowings


(308
)


(278
)Repayments on secured convertible
    term note


(1,251
)


(107
)Repayments of capital lease
    obligations


(6
)


(6
)Net cash (used in) provided by
    financing activities


(1,528
)


158Net increase (decrease) in cash
    and cash equivalents


275



(2,897
)Cash and cash equivalents at
    beginning of year


1,843



4,740Cash and cash equivalents at end
    of year

$
2,118


$
1,843Supplemental schedule of cash flow
    information:Interest paid

$
146


$
146Taxes paid

$
30


$
30Supplemental schedule of noncash
    investing and financing activities:Financing of insurance premiums

$
381


$
295Financing of fixed assets

$
31


$
Issuance of common stock from
    conversion of debt and accrued interest

$



$
1,427Repayment of restricted cash
    portion of secured convertible term note and accrued interest

$
2,547


$
    F-6




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Nature of
    Operations:          2.
    Summary
    of Significant Accounting Policies:    Use of
    Estimates:
    Principles
    of Consolidation
  Reclassifications:
    Cash
    and Cash Equivalents:
   F-7




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Accounts
    Receivable:
    Inventories:
  first-in,
  Patent
    Expenses:
    Property
    and Equipment:
    Accounting
    for the Impairment or Disposal of Long-Lived
    Assets:
      Fair
    Value of Financial Instruments:
   F-8




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Derivative
    financial instruments:
    Revenue
    Recognition:
        No. 00-21, Revenue Arrangements with Multiple
    Deliverables.
 F-9




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Shipping
    and Handling Costs and Revenues:
    Research
    and Development:
    Warranties:
    Advertising:
    Income
    Taxes:
    Stock-Based
    Compensation:
  Share-Based Payment Accounting for Stock Issued to
    Employees
     F-10




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accounting for Stock-Based
    Compensation
      Description
    of Plans
  10-year
       F-11




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Summary
    of Assumptions and Activity
        Year Ended


Year EndedDecember 31,


December 31,2006


2005Expected term


4 years



4.43 yearsExpected volatility


106
%


88
%Risk-free interest rate


4.9
%


3.9
%Expected dividends






     Year Ended


Year EndedDecember 31,


December 31,2006


2005Expected term


0.50 years



0.50 yearsExpected volatility


106
%


88
%Risk-free interest rate


4.9
%


3.9
%Expected dividends






  F-12




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    WeightedWeighted


AverageAverage


Remaining


AggregateExercise


Contractual


IntrinsicShares


Price


Term (Years)


Value(In thousands)Options outstanding at
    January 1, 2006


4,537


$
1.10



Options granted


1,268


$
0.49



Options exercised


(116
)

$
0.32



Options forfeited/canceled


(2,198
)

$
1.13



Options outstanding at
    December 31, 2006


3,491


$
0.89



6.3


$
Vested or expected to vest


3,396


$
0.95



6.2


$
Options exercisable at
    December 31, 2006


3,013


$
0.95



5.8


$
   in-the-money
          YearEndedDecember 31,2006Stock-based compensation expense
    included in:Research and development

$
33Sales, general and administrative


331$
364  F-13




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    YearEndedDecember 31,2005Net loss  as reported

$
(1,857
)Deduct: Share-based employee
    compensation expense determined under fair value method, net of
    tax effects


(303
)Net loss  pro forma

$
(2,160
)Net loss per common
    share  as reportedBasic

$
(0.04
)Diluted

$
(0.04
)Net loss per common
    share  pro formaBasic

$
(0.05
)Diluted

$
(0.05
)   Net
    Income (Loss) Per Share:
      Recently
    Issued Accounting Standards:
  Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109
  Fair Value Measurements.
 F-14




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accounting for Derivative Instruments
    and Hedging Activities
  Considering the Effects of Prior Year Misstatements when
    Quantifying Misstatements in Current Year Financial
    Statements.
  3.
    Inventories:  (in thousands)
  December 31,2006Raw materials

$
577Work in process


295Finished goods


1,357$
2,229   4.
    Property
    and Equipment:  (in
    thousands):
  December 31,2006Computers and equipment

$
593Manufacturing and demonstration
    equipment


287Leasehold improvements


38Loaned lasers


3,3704,288Less accumulated depreciation and
    amortization


(3,671
)$
617      F-15




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   5.
    Other
    Assets:  (in thousands):
  December 31,2006Debt issuance costs, net

$
17Rental security deposit


46$
63           6.
    Accrued
    Liabilities:  (in
    thousands):
  December 31,2006Accrued accounts payable and
    related expenses

$
47Accrued vacation


155Accrued salaries and commissions


222Accrued audit and tax fees


110Legal settlement with former CEO(1)


500Accrued other


572$
1,606     (1)
    
    See Note 9. F-16




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   7.
    Secured
    Convertible Term Note and Related Obligations:          
    The Note is convertible at the holders option at any time
    at the fixed conversion price of $.50 per share. This
    conversion feature has been identified as an embedded derivative
    and has been bifurcated and recorded on the Companys
    consolidated balance sheet at its fair value;
    Beginning May 2005, the Company was required to make monthly
    principal payments of $104,000 per month. The monthly
    payment as well as related accrued interest must be converted to
    common stock at the fixed conversion price of $0.50 if the fair
    value of the Companys common stock is greater than
    $0.55 per share for the 5 days preceding the payment
    due date. This conversion feature has been identified as an
    embedded derivative and has been bifurcated and recorded on the
    Companys balance sheet at its fair value;
    Restricted cash must be converted at a fixed conversion price of
    $0.50 per share if the fair value of the Companys
    common stock is greater than 125%, 150% or 175% (each threshold
    must meet higher trading volume limits) of the initial fixed
    conversion price of $0.50 per share. This conversion
    feature has been identified as an embedded derivative and has
    been bifurcated and recorded on the Companys consolidated
    balance sheet at its fair value. As a result of the repayment of
    the restricted cash, this derivative is not applicable at
    December 31, 2006;
    Annual interest on the Note is equal to the prime
    rate published in The Wall Street Journal from time to
    time, plus two percent (2.0%), provided that such annual rate of
    interest may not be less than six and one-half percent (6.5%).
    For every 25% increase in the Companys common stock fair
    value above $0.50 per share, the interest rate will be
    reduced by 2%. The interest rate may never be reduced below 0%.
    Interest on the Note is payable monthly in arrears on the first
    day of each month during the term of the Note, beginning F-17




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  November 2004. The potential interest rate reduction due to
    future possible increases in the Companys stock price has
    been identified as an embedded derivative and has been
    bifurcated and recorded on the Companys consolidated
    balance sheet at its fair value;  
    The Note agreement includes a liquidated damages provision based
    on any failure to meet registration requirements for shares
    issuable under the conversion of the note or exercise of the
    warrants by February 2005. This liquidated damages feature
    represented an embedded derivative, however since the Company
    has met the registration requirements, this derivative is no
    longer valid.
    The Note agreement contains certain events of default including
    delinquency, bankruptcy, change in control and stop trade or
    trade suspension. In the event of default, Laurus has the right
    to call the debt at a 30% premium, increase the note rate to the
    stated rate, increase the note rate by an additional 12%,
    foreclose on the collateral,
    and/or seek
    other remedies. Laurus right to increase the interest rate
    on the debt in the event of default represents an embedded
    derivative. However, based on the de minimus value
    associated with this feature, no value has been assigned at
    issuance and at December 31, 2006. Pursuant to the terms of
    the Note, an event of default includes a suspension of trading
    of the Companys common stock on the OTC Bulletin Board
    which remains uncured within thirty (30) days of notice of
    the suspension. To the extent that the delisting is deemed a
    suspension of trading and the Company is unable to
    have its common stock listed on the OTC Bulletin Board
    within such thirty day period, the Company will be in default of
    its obligations under the Note. If an event of default occurs
    under the Note, interest on the Note will accrue at the default
    rate which is the then current prime rate plus 12% per
    annum until the default is cured. In addition, the holder of the
    Note will have the right to accelerate the Note and declare it
    immediately due and payable and exercise its rights as a secured
    creditor under applicable law and the security agreement with
    the Company, including the right to foreclose upon the assets of
    the Company securing the Note, which constitute substantially
    all of the Companys assets. In addition, to mitigate the
    financial consequences of any possible default, in
    May 2006, the Company repaid approximately $2,417,000 of
    the outstanding principal amount of the Note out of the
    restricted cash account created for the benefit of Laurus and
    the Company. In connection with the repayment, the Company was
    required to pay a prepayment penalty (equal to 20% of the amount
    to be repaid).       F-18




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Year Ending December 31,2007

$
1,041,000       December 31,2006(In thousands)Principal Note balance

$
6,000Principal conversions


(1,184
)Repayment of restricted cash
    balance


(2,417
)Cash payments


(1,358
)Total secured convertible term note


1,041Unamortized discount on Note


(72
)Derivative valuation


(376
)Warrant valuation


362Total secured convertible term
    note and related obligations

$
955     8.
    Long-term
    Liabilities:   F-19




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    9.
    Commitments
    and Contingencies:  Operating
    Lease
  (in thousands):
  Year Ending December 31,2007


1002008


1052009


1202010


1262011


120$
571     Litigation
        89,008 shares at $0.32 per share
    150,000 shares at $0.70 per share
    200,000 shares at $0.54 per share
    250,000 shares at $0.50 per share   F-20




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       10.
    Shareholders
    Equity:  Issuances
    of Common Stock:
        Warrants:
            00-19 Accounting for Derivative Financial Instruments Indexed
    to, and Potentially Settled in, a Companys Own
    Stock
 F-21




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Options
    Granted to Employees:
    Shareholder
    Rights Plan:
    Stock
    Option Plan:
    Directors
    Stock Option Plan:
   F-22




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Employee
    Stock Purchase Plan:
    (in thousands, except per
    share amounts):
 Outstanding OptionsWeightedShares





AverageAvailable


Number


Price perfor Grant


of Shares


ShareBalance, December 31, 2004


3,246



4,177


$
1.28Additional shares reserved


1,150







Options granted


(1,081
)


1,081


$
0.55Options forfeited


567



(567
)

$
1.97Options expired


10



(10
)

$
1.67Options exercised






(144
)

$
0.32Balance, December 31, 2005


3,892



4,537


$
1.10Options granted


(1,268
)


1,268


$
0.49Options forfeited


2,190



(2,190
)

$
1.10Options expired


8



(8
)

$
11.00Options exercised






(116
)

$
0.32Balance, December 31, 2006


4,822



3,491


$
0.89     Options Outstanding


Options ExercisableWeightedAverage


Weighted





WeightedRemaining


Average





AverageNumber


Contractual Life


Exercise


Number


ExerciseExercise Prices

Outstanding


(In Years)


Price


Exercisable


Price(In thousands)








(In thousands)$0.25 - $0.46


449



5.71


$
0.33



420


$
0.32$0.47 - $0.51


903



7.41


$
0.50



524


$
0.50$0.54 - $0.58


614



6.24


$
0.54



590


$
0.54$0.59 - $0.83


797



6.22


$
0.68



751


$
0.69$0.84 - $1.16


330



6.27


$
0.99



330


$
0.99$1.19 - $1.40


234



5.32


$
1.27



234


$
1.27$2.57 - $4.00


54



4.25


$
2.90



54


$
2.90$6.06 - $7.44


70



2.52


$
6.46



70


$
6.46$8.00 - $11.50


40



1.60


$
9.82



40


$
9.823,491



6.25


$
0.89



3,013


$
0.95  F-23




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  11.
    Employee
    Retirement Plan:    12.
    Segment
    Disclosures    13.
    Income
    Taxes:  (in thousands):
  December 31,2006Net operating losses

$
54,752Credits


3,490Research and development


713Reserves


245Accrued liabilities


1,008Depreciation/Amortization


10Net deferred tax asset


60,218Less valuation allowance


(60,218
)Net deferred tax assets

$
          F-24




---



##### Table of Contents



CARDIOGENESIS
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      14.  Risks
    and Concentrations:
       F-25




---



##### Table of Contents



EXHIBIT INDEX
  Exhibit No.

Description3
.1.1(1)

Restated Articles of
    Incorporation, as filed with the California Secretary of State
    on May 1, 19963
.1.2(2)

Certificate of Amendment of
    Restated Articles of Incorporation, as filed with California
    Secretary of State on July 18, 20013
.1.3(3)

Certificate of Determination of
    Preferences of Series A Preferred Stock, as filed with the
    California Secretary of State on August 23, 20013
.1.4(4)

Certificate of Amendment of
    Restated Articles of Incorporation, as filed with the California
    Secretary of State on January 23, 20043
.2(5)

Amended and Restated Bylaws4
.1(6)

Third Amendment to Rights
    Agreement, dated October 26, 2004, between the Company and
    Equiserve Trust Company N.A4
.2(7)

Second Amendment to Rights
    Agreement, dated as of January 21, 2004, between
    Cardiogenesis Corporation and EquiServe Trust Company, N.A., as
    Rights Agent4
.3(8)

First Amendment to Rights
    Agreement, dated as of January 17, 2002, between
    Cardiogenesis Corporation and EquiServe Trust Company, N.A., as
    Rights Agent4
.4(9)

Rights Agreement, dated as of
    August 17, 2001, between Cardiogenesis Corporation and
    EquiServe Trust Company, N.A., as Rights Agent4
.5(10)

Securities Purchase Agreement,
    dated as of January 21, 2004, by and among Cardiogenesis
    Corporation and each of the investors identified therein4
.6(11)

Registration Rights Agreement,
    dated as of January 21, 2004, by and among Cardiogenesis
    Corporation and the investors identified therein4
.7(12)

Form of Common Stock Purchase
    Warrant, dated January 21, 2004, having an exercise price
    of $1.37 per share4
.8(13)

Securities Purchase Agreement,
    dated October 26, 2004, between the Company and Laurus
    Master Fund, Ltd.4
.9(14)

Secured Convertible Term Note,
    dated October 26, 2004, in favor of Laurus Master Fund, Ltd.4
.10(15)

Registration Rights Agreement,
    dated October 26, 2004, between the Company and Laurus
    Master Fund, Ltd.4
.11(16)

Common Stock Purchase Warrant,
    dated October 26, 2004, in favor of Laurus Master Fund, Ltd.4
.12(17)

Security Agreement, dated
    October 26, 2004, in favor of Laurus Master Fund, Ltd.10
.1(18)*

Form of Indemnification Agreement
    by and between the Company and each of its officers and directors10
.2(19)*

Stock Option Plan, as amended and
    restated July 200510
.3(20)*

Director Stock Option Plan, as
    amended and restated July 200510
.4(21)*

Employee Stock Purchase Plan, as
    amended and restated July 200510
.5(22)

Lease for the Companys
    executive offices in Irvine, California10
.6(23)*

401(k) Plan, as restated
    January 1, 200510
.8(24)*

Description of the Stock Option
    Plan10
.9(25)*

Description of the Director Stock
    Option Plan10
.10(26)*

Form of Stock Option Agreement for
    Executive Officers under the Stock Option Plan10
.11(27)*

Form of Grant Notice under the
    Stock Option Plan10
.12(28)*

Form of Stock Option Agreement for
    Directors under the Director Stock Option Plan10
.13(29)*

Form of Grant Notice under the
    Director Stock Option Plan10
.14(30)*

Settlement Agreement and General
    Release between the Registrant and Michael J. Quinn, dated
    October 24, 200610
.15(30)*

Summary of Director Compensation10
.16(30)*

Summary of Executive Compensation21
.1(30)

List of Subsidiaries23
.1(30)

Consent of KMJ/Corbin &
    Company LLP




---



##### Table of Contents



Exhibit No.

Description31
.1(30)

Certification of the President
    pursuant to
    Rule 13a-14(a)
    of Securities Exchange Act of 1934, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200231
.2(30)

Certification of the Chief
    Financial Officer pursuant to
    Rule 13a-14(a)
    of Securities Exchange Act of 1934, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200232
.1(30)

Certifications of the President
    and Chief Financial Officer pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002     *
    
    Management contract, compensatory plan or arrangement(1)
    
    Incorporated by reference to Exhibit 3.1 to the
    Registrants Registration Statement on
    Form S-1/A
    (File
    No. 33-03770),
    filed May 21, 1996(2)
    
    Incorporated by reference to Exhibit 3.2 to the
    Registrants Quarterly Report on
    Form 10-Q
    filed on August 14, 2001(3)
    
    Incorporated by reference to Exhibit 4.2 to the
    Registrants Current Report on
    Form 8-K
    filed on August 20, 2001(4)
    
    Incorporated by reference to Exhibit 3.1.4 to the
    Registrants Annual Report on
    Form 10-K
    filed on March 10, 2004(5)
    
    Incorporated by reference to Exhibit 3.2 to the
    Registrants Annual Report on
    Form 10-K
    filed on March 10, 2004(6)
    
    Incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on
    Form 8-K
    filed October 28, 2004(7)
    
    Incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on
    Form 8-K
    filed January 26, 2004(8)
    
    Incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on
    Form 8-K
    filed January 18, 2002(9)
    
    Incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on
    Form 8-K
    filed August 20, 2001(10)
    
    Incorporated by reference to Exhibit 4.4 to the
    Registrants Current Report on
    Form 8-K
    filed January 22, 2004(11)
    
    Incorporated by reference to Exhibit 4.5 to the
    Registrants Current Report on
    Form 8-K
    filed January 22, 2004(12)
    
    Incorporated by reference to Exhibit 4.6 to the
    Registrants Current Report on
    Form 8-K
    filed January 22, 2004(13)
    
    Incorporated by reference to Exhibit 4.2 to the
    Registrants Current Report on
    Form 8-K
    filed October 28, 2004(14)
    
    Incorporated by reference to Exhibit 4.3 to the
    Registrants Current Report on
    Form 8-K
    filed October 28, 2004(15)
    
    Incorporated by reference to Exhibit 4.4 to the
    Registrants Current Report on
    Form 8-K
    filed October 28, 2004(16)
    
    Incorporated by reference to Exhibit 4.5 to the
    Registrants Current Report on
    Form 8-K
    filed October 28, 2004(17)
    
    Incorporated by reference to Exhibit 4.6 to the
    Registrants Current Report on
    Form 8-K
    filed October 28, 2004(18)
    
    Incorporated by reference to the Companys Registration
    Statement on Form
    S-1 (File
    No. 333-03770),
    as amended, filed April 18, 1996(19)
    
    Incorporated by reference to Exhibit 10.2 of the
    Registrants Annual Report on
    Form 10-K
    filed on August 21, 2006(20)
    
    Incorporated by reference to Exhibit 10.3 of the
    Registrants Annual Report on
    Form 10-K
    filed on August 21, 2006(21)
    
    Incorporated by reference to Exhibit 10.4 of the
    Registrants Annual Report on
    Form 10-K
    filed on August 21, 2006(22)
    
    Incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 10-K
    filed August 25, 2006(23)
    
    Incorporated by reference to Exhibit 10.6 to the
    Registrants Annual Report on
    Form 10-K
    filed March 31, 2005




---



##### Table of Contents



(24)
    
    Incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K
    filed on August 4, 2005(25)
    
    Incorporated by reference to Exhibit 10.2 to the
    Registrants Current Report on
    Form 8-K
    filed on August 4, 2005(26)
    
    Incorporated by reference to Exhibit 10.3 to the
    Registrants Current Report on
    Form 8-K
    filed on August 4, 2005(27)
    
    Incorporated by reference to Exhibit 10.4 to the
    Registrants Current Report on
    Form 8-K
    filed on August 4, 2005(28)
    
    Incorporated by reference to Exhibit 10.5 to the
    Registrants Current Report on
    Form 8-K
    filed on August 4, 2005(29)
    
    Incorporated by reference to Exhibit 10.6 to the
    Registrants Current Report on
    Form 8-K
    filed on August 4, 2005(30)
    
    Filed herewith