**SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

**Form10-KSB**
| **x**                                        | ** ** | **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE ACT OF 1934** |
|----------------------------------------------|------------|-------------------------------------------------------------------------------------------|
| ** **                                   | ** ** | ** **                                                                                |
| **For the  fiscal year ended June 30, 2007** |
| ** **                                   |
| **o**                                        | ** ** | **TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE ACT OF 1934**   |

 

**For thetransition period from                      to**

**CommissionFile Number 000-24541**

**CORGENIX MEDICAL CORPORATION**

(Name of smallbusiness issuer as specified in its charter)

| **Nevada**                       |   | **93-1223466**                        |
|----------------------------------|--------|---------------------------------------|
| (State or other  jurisdiction of |   | (I.R.S. Employer  Identification No.) |
| incorporation or  organization)  |   |                                  |

 

**11575 Main Street, Broomfield,Colorado 80020**

(Address ofprincipal executive offices)

**(303) 457-4345**

(Issuer’stelephone number)

Securitiesregistered pursuant to Section 12(b) of the Act: **None**

Securities registeredpursuant to Section 12(g) of the Act: **Common Stock, $.001 ParValue**

Check whether theissuer:  (1) filed all reportsrequired to be filed by Section 13 or 15(d) of the Exchange Act during the past12 months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days.      Yes x No o

Check if nodisclosure of delinquent filers in response to Item 405 of Regulation S-Bis contained in this form, and no disclosure will be contained, to the best ofthe issuer’s knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-KSB or any amendment tothis Form 10-KSB.  x

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of theAct) Yes o  No x

The issuer’srevenues for its most recent fiscal year were: $7,367,933

The aggregatemarket value of the voting stock and non-voting common equity held by non-affiliatesof the issuer was $3,807,593 as of June 30, 2007, based on the closing price of$0.25 as reported on the OTCBB on June 30, 2007.

The number ofshares of Common Stock outstanding was 21,887,056 as of September 12,2007.

Transitional SmallBusiness Disclosure Format.      Yes o      No x

 

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**PART I**

**Item 1.  Descriptionof Business.**

*Certain terms used in this annual report aredefined in the Glossary that follows at the end of Part I.*

##### ***Company Overview***

CorgenixMedical Corporation, which we refer to as Corgenix or the Company, is engagedin the research, development, manufacture, and marketing of in vitro (outsidethe body) diagnostic products for use in disease detection and prevention.  We currently sell 52 diagnostic products on aworldwide basis to hospitals, clinical testing laboratories, universities,biotechnology and pharmaceutical companies and research institutions.  In the U.S. and the United Kingdom, we selldirectly to these customers.  Elsewherein the world, we primarily sell to independent distributors that in turn sellto the laboratories.

Our corporateheadquarters is located in Broomfield, Colorado.  We have two wholly owned operatingsubsidiaries:

·                 Corgenix,Inc. (formerly REAADS Medical Products, Inc.), established in 1990 and locatedin Broomfield, Colorado.  Corgenix, Inc.is responsible for sales and marketing activities for North America, and alsoexecutes product development, product support, clinical and regulatory affairs,and product manufacturing.

·                 Corgenix(UK) Ltd, incorporated in the United Kingdom in 1996 (formerly REAADSBio-Medical Products (UK) Limited) and located in Peterborough, England.  Corgenix UK manages our international salesand marketing activities except for distribution in North America, which is theresponsibility of Corgenix, Inc.

We continue to use theREAADS trademark and trade name in the sale of products that we manufacture.

***Recent Developments***

On July 25, 2007, we entered into subscription andother agreements to complete a private placement with certain institutional andother accredited investors.

Our offering consisted of common stock in theCompany (the “Shares”) at the price of $0.25 per share.  For each Share purchased, every investorreceived an equal number of common stock purchase warrants (the “Warrants”).  One-third of the Warrants issued to eachinvestor are exercisable at $0.34 per share with a one-year term, one-third areexercisable at $0.375 per share with a two-year term, and the remaining thirdare exercisable at $0.40 per share with a five-year term.

The Shares and Warrants were offered and sold inreliance on exemptions from registration pursuant to Section 4(2) of theSecurities Act of 1933, and Rule 506 of Regulation D thereunder.  Each investor is an “accredited investor” asdefined in Rule 501 of the same.

The sale of the Shares and Warrants also included aRegistration Rights Agreement whereby we provided the purchasers with “piggyback” registration rights if we propose to register securities under the 1933Act.

Asof August 27, 2007, we had sold $725,000 in Shares and Warrants.  The maximum offering size is $860,000 with anoverallotment, at our discretion, of $129,000.

TerraNova Financial, LLC, an Illinois limited liability company (“Terra Nova”),acted as a placement agent for the Company. Iliad Advisors, LLC, an Illinoislimited liability company (“Iliad Advisors”), provided advisory services toTerra Nova on the transaction.  Ascompensation for Terra Nova’s services, we pay Terra Nova a fee equal to 7% ofthe aggregate offering price, due to Terra Nova at each close of each stage ofthe transaction.  To date, we have paidTerra Nova $50,750.

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Terra Nova’s feealso includes warrants, due to Terra Nova at the close of the transaction, topurchase shares of our common stock at the exercise price of $0.25 pershare.  If Terra Nova succeeds in sellingthe maximum offering plus the over-allotment, totaling an aggregate of$989,000, it will receive $69,230 in cash, and warrants to purchase 276,920shares of common stock at the exercise price of $0.25 per share.

OnJanuary 4, 2007, we filed a complaint in the U.S. District Court for theDistrict of Colorado against Biosafe Laboratories, Inc., a corporationorganized and existing under the laws of the State of Illinois.  The complaint stated, among other things,that Corgenix and Biosafe were parties to a non-binding Letter of Intent datedSeptember 12, 2006 (the “LOI”), under which the companies explored thepossibility of a licensing arrangement between them for the sale of some ofBiosafe’s products.  Upon execution ofthis non-binding LOI, we paid to Biosafe a deposit of $250,000 (the “RefundableDeposit”).  The LOI specifically requiredBiosafe to refund $225,000 of that deposit to us in the event that a bindingagreement was not reached between the parties. A binding agreement was neverreached between the two companies and even though Biosafe was obligated torefund the Refundable Deposit to us and demand was made by us for saidRefundable Deposit, Biosafe refused to return the Refundable Deposit.  We brought suit against Biosafe, and soughtrelief in the form of, but not limited to, the refund of the RefundableDeposit, in addition to all damages sustained.

OnFebruary 20, 2007, Biosafe disputed the above claims and filed a counterclaimagainst us, which stated, among other things, that we failed to go forward withthe execution of the binding agreement after the tems of said agreement werefully negotiated and drafted and that the required funding had beensecured.  It also claimed that we failedto disclose, in a timely fashion, that we needed Board of Director approvalprior to execution of the binding agreement, and overall did not deal withBiosafe in good faith and with fair dealing. Biosafe’s counterclaim claimeddamages of $1,000,000.

On March 12, 2007,we filed our reply to the above counterclaims denying the validity of all ofthe counterclaims by Biosafe and again requesting that judgment be entered inour favor and that we be awarded our $225,000 deposit and any other costs.

OnJune 22, 2007, Corgenix  and Biosafe  executed a Settlement Agreement (the “Agreement”).The Agreement brought to an end litigation between the Company and Biosaferelating to the Refundable Deposit. The Agreement required that Biosafe pay usthe sum of $125,000.00 no later than July 2, 2007. This amount was in fact paidto us on July 2, 2007. The Agreement also required both the Company and Biosafeto dismiss, with prejudice, all claims related to the Letter of Intent. TheAgreement provided that each party bear its own costs and attorneys fees.

OnMarch 1, 2007, we executed an exclusive license agreement (the “LicenseAgreement”) with Creative Clinical Concepts, Inc. (“CCC”).  The License Agreement provides that CCClicense to us certain products and assets related to determining the effectivenessof aspirin and / or anti-platelet therapy (collectively, “Aspirin EffectivenessTechnology,” or the “Licensed Products”). The Aspirin Effectiveness Technology includes US trademark registrationnumber 2,688,842, which includes the term “AspirinWorks”® and related designs.

Webelieve that there is a present and growing need for non-invasive, simple andaccurate confirmation of aspirin effectiveness and aspirin therapy, and thatthe License Agreement will position us to provide products to meet this need.  Since 2005, Corgenix and CCC have beenengaged in a collaborative partnership to develop, manufacture and marketproducts for aspirin monitoring, including the AspirinWorks® Test Kit, a simpleurine test that measures a person’s response to aspirin and allows physiciansto determine the effect of aspirin therapy on an individual basis.  Under terms of the original agreement, CCCand Corgenix had agreed to equally share expenses and revenues that resultedfrom the business.  Under the LicenseAgreement, Corgenix will acquire the remaining 50 percent of the license to CCC’sAspirin Effectiveness Technology, thereby owning 100 percent of the rights to CCC’s Aspirin EffectivenessTechnology.

TheLicense Agreement requires CCC to provide us with a worldwide, perpetuallicense for the use of CCC’s Aspirin Effectiveness Technology.  Additionally, CCC will provide us with thenames of contacts, customer lists, market information, competitive informationand technology related to CCC’s already-developed market in AspirinEffectiveness

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Technology.  The License Agreement requires CCC to assistwith the manufacture of products derived from the Aspirin EffectivenessTechnology, and also provide us with a right of first refusal with regard toany new products developed by CCC for the purpose of measuring aspirineffectiveness and the use of thromboxane and prostacyclin metabolites todetermine the effect of aspirin on platelets or endothelial cells.

Wemay use the Licensed Products in connection with any other asset ortrademark.  We may also enter intosublicense agreements with any other entity for the rights, privileges andlicenses granted to us under the License Agreement.  We must seek CCC’s consent before enteringany sublicense agreement, but CCC may not unreasonably withhold its consent solong as the sublicensee will use its commercially reasonable best efforts tomarket and sell the Licensed Products. We must use our commercially reasonable best efforts to market and sellthe Licensed Products.  To this end,within ninety days of the date the FDA grants clearance for the LicensedProducts, and for five years thereafter, we must develop and maintain aninteractive website dedicated to the Licensed Products.  CCC may not use or license or in any waytransfer rights to any of the Licensed Products to any third party.

TheLicense Agreement provides that responsibility for manufacture, distribution,and administration of the sale of the Licensed Products is with us.  However, the Agreement requires CCC to assistand cooperate with us in this regard.

Ourfirst payment to CCC became due at the execution of the Agreement.  We have provided a combination of cash,shares of the Company’s common stock, and warrants to purchase the Company’scommon stock.  Following FDA clearance ofthe first Licensed Product, we are required to make additional payments toCCC.  On the first, second and thirdanniversary of that clearance, we will be obligated to make payments consistingof cash, shares of common stock, and warrants to purchase shares of commonstock.  The amount of cash and number ofshares and warrants due in these anniversary payments will be determined byapplication of a formula including a certain dollar value, the total cumulativerevenue received by us from sales of the Licensed Products during that year,and our common stock share price on the relevant anniversary.  The dollar value applicable to that ratioincreases with each anniversary.

TheLicense Agreement imposes caps on the total amount of cash, common stock, andwarrant payments from us to CCC from the date of execution through to andincluding the third anniversary payment. Under that cap limitation, the total anniversary payments will notexceed $200,000 in cash, $300,000 in value of shares of common stock (as valuedon the date of issue), and 300,000 warrants to purchase shares of common stockat an exercise price of $0.35 per share.

TheLicense Agreement also requires that, for all sales of the Licensed Productssubsequent to the execution of the agreement, we pay CCC a quarterly royaltyfee equal to seven percent of net sales of the Licensed Products during theimmediately preceding quarter.  TheLicense Agreement’s caps on payments from us to CCC do not apply to royaltypayments.

TheCompany and CCC anticipate that the License Agreement will remain in effect inperpetuity; however, the License Agreement provides for termination in theevent of material breach, or if we become insolvent or file for protectionunder the U.S. Bankruptcy Code. Termination would cause all of our rights under the License Agreement torevert to CCC, although any rights sublicensed to a third party would not berevoked or infringed by any such termination.

TheLicense Agreement required that we forgive all unpaid fees, costs and expensesdue to us under that certain Product Developing, Manufacturing, andDistribution Agreement between us and CCC dated May 13, 2005.  The License Agreement also requires that weforgive all unpaid fees, costs, expenses and charges due to us under thatcertain license agreement between the parties and McMaster University, datedOctober 19, 2005.  The total value ofsuch forgiven fees, costs, expenses and charges is approximately $230,000.

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***Our Business***

**Introduction**

Ourbusiness includes the research, development, manufacture, and marketing of invitro diagnostic products for use in disease detection and prevention.  We currently sell 52 diagnostic products on aworldwide basis to hospitals, clinical testing laboratories, universities,biotechnology and pharmaceutical companies and research institutions.  We have developed and we manufacture most ofour products at our Colorado facility, and we purchase what we refer to as OMProducts from other healthcare manufacturers for resale by us.  All of these products are used in clinicallaboratories for the diagnosis and/or monitoring of three important areas ofhealth care:

·                 Autoimmunedisease (diseases in which an individual creates antibodies to one’s self, forexample systemic lupus erythematosus (“SLE”) and rheumatoid arthritis (“RA”);

·                 Vasculardisease (diseases associated with certain types of thrombosis or clotformation, for example antiphospholipid syndrome, deep vein thrombosis, strokeand coronary occlusion); and

·                 Liverdiseases (fibrosis, and cirrhosis).

Inaddition to our current products, we are actively developing new laboratorytests in other important diagnostic testing areas.  See “— Other Strategic Relationships.”  We manufacture and market to clinicallaboratories and other testing sites worldwide. Our customers include large and emerging health care companies such asdiaDexus, Inc., Bio Rad Laboratories, Inc., Instrumentation Laboratories,Helena Laboratories and Diagnostic Grifols, S.A.

Mostof our products are based on our patented and proprietary application of EnzymeLinked ImmunoSorbent Assay, or ELISA, technology, a clinical testingmethodology commonly used worldwide. Most of our current products are based on this platform technology in adelivery format convenient for clinical testing laboratories.  The delivery format, which is referred to as “Microplate,”allows the testing of up to 96 samples per plate, and is one of the mostcommonly used formats, employing conventional testing equipment found invirtually all clinical laboratories.  Theavailability and broad acceptance of ELISA Microplate products reduces entrybarriers worldwide for our new products that employ this technology anddelivery format.  Our products are soldas “test kits” that include all of the materials required to perform the test,except for routine laboratory chemicals and instrumentation.  A test using ELISA technology involves aseries of reagent additions into the Microplate, triggering a compleximmunological reaction in which a resulting color occurs.  The amount of color developed in the finalstep of the test is directly proportional to the amount of the specific markerbeing tested for in the patient or unknown sample.  The amount of color is measured and the resultscalculated using routine laboratory instrumentation.  Our technology specifies a process by whichbiological materials are attached to the fixed surface of a diagnostic testplatform.  Products developed using this uniqueattachment method typically demonstrate a more uniform and stable molecularconfiguration, providing a longer average shelf life, increased accuracyand  superior specificity than theproducts of our competitors.

Someof the OM products which we obtain from other manufacturers and sell throughour distribution network utilize technologies other than our patented andproprietary ELISA technology.

Ourdiagnostic tests are intended to aid in the identification of the causes ofillness and disease, enabling a physician to select appropriate patienttherapy.

Internallyand through collaborative arrangements, we are developing additional productsthat are intended to broaden the range of applications for our existingproducts and to result in the introduction of new products.  See AtherOx and AspirinWorks.

Since1990, our sales force and distribution partners have sold over 12 million testsworldwide under the REAADS and Corgenix labels, as well as products sold underother manufacturers’ labels, referred to as OEM products.  An integral part of our strategy is to workwith corporate partners to develop market opportunities and access importantresources.  We

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believe that ourrelationships with current and potential partners will enable us to enhance ourmenu of diagnostic products and accelerate our ability to penetrate theworldwide markets for new products.

Wecurrently use the REAADS and Corgenix trademarks and trade names in the sale ofthe products which we manufacture.  Theseproducts constitute the majority of our product sales.

**Industry Overview**

Invitro diagnostic, or IVD, testing is the process of analyzing the components ofa wide variety of body fluids outside of the body to identify the presence ofmarkers for diseases or other human health conditions.  The worldwide human health IVD marketconsists of reference laboratory and hospital laboratory testing, testing inphysician offices and the emerging over-the-counter market, in which testing isdone at home by the consumer.

Traditionally,diagnostic testing has been performed in large, high-volume commercial orhospital-based laboratories using instruments operated by skilledtechnicians.  Our products in aMicroplate format are designed for such instrumentation and are marketed tothese types of laboratories.  Theinstrumentation and supportive equipment required to use our ELISA tests isrelatively simple, and typically is used by a laboratory for many differentproducts.

TheIVD industry has undergone major consolidation over the last few years.  As a result, the industry is characterized bya small number of large companies or divisions of large companies thatmanufacture and sell numerous diagnostic products incorporating a variety oftechnologies.  Even given the industryconsolidation mentioned above, there continues to be many small diagnosticcompanies, which generally have limited resources to commercialize newproducts.  As a result of technologicalfragmentation and customer support requirements, we believe that there may be asubstantial competitive advantage for companies with unique and differentiatedtechnologies that can be used to generate a broad menu of diagnostic productsand that have developed successful customer support systems.

**Strategy**

Our primary objective is to apply our proprietaryELISA technology to the development and commercialization of products for usein a variety of markets.  Our strategiesfor achieving this objective include the following:

·                 *Apply our ELISA Technology to AdditionalDiagnostic Markets.*We havefocused our resources on the development of highly accurate tests in theMicroplate format for sale to clinical testing laboratories. We believe we canexpand our market focus with the addition of new tests that are complementaryto the current product line. In fiscal 2007 we completed or made significantprogress in the product development programs of several diagnostic products:

·                 arecently patented ELISA assay to measure analytes in the urine to assessaspirin effectiveness useful in the prevention of cardiac disease; and

·                 oneELISA assay to measure Oxidized LDL, combined with B2GP1, which we havetrademarked “AtherOx”, and two ELISA assays to measure antibodies againstAtherOx; all three products are used to assess the risk of developing arterialthrombosis and atherosclerosis.

·                 *Leverage Sales and Marketing Resources. *Wemaintain a small marketing and sales organization, which is experienced inselling diagnostic tests into the laboratory market.  We plan to expand this sales organization,adding distribution channels as opportunities arise.  We also plan to pursue the expansion of ourproduct menu with more high value, quality products through internaldevelopment, acquisition or licensing of complementary products andtechnologies.

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·                 Infiscal 2006, we added additional sales and marketing management in our U.S. andEuropean organization.  In fiscal 2007 wemaintained the same level of sales and markerting management in our U.S. andEuropean organization as in 2006.

·                 *Continue to Develop Strategic Alliances toLeverage Company Resources.*  We have developed, and will continue to pursue,strategic alliances to access complementary resources (such as proprietarymarkers, funding, marketing expertise and research and development assistance),to leverage our technology, expand our product menu and maximize the use of oursales force.

·                 Infiscal 2007, we made significant advances on several existing partnershipprograms, and have identified several new opportunities for fiscal 2008.

·                 *Pursue Synergistic Product and/or TechnologyAcquisitions. *Weintend to proactively evaluate strategic acquisitions of companies,technologies and product lines where we identify a strategic opportunity toexpand our core business while increasing revenues and earnings from these newtechnologies.  Any acquisition of  such synergistic products and/or technologieswill, of necessity, depend on the availability to the Company of adequatefinancial resources to do so.

·                 *Expand into Additional Market Segments forExisting Products.*  We intend to investigate additional marketopportunities for both clinical and research applications of our existingproducts.

·                 Severalof our products are already being sold into new market areas, and the currentstrategic programs have all been selected due to their potential opportunitiesto provide us access to more significant markets.

# **Products and Markets**

We currently sell ELISA tests in major marketsworldwide.  To date, our sales force anddistribution partners have sold over 12 million tests since we first receivedproduct marketing clearance from the U.S. Food and Drug Administration (the “FDA”)for the first anti-cardiolipin antibody test in 1990.  Many peer reviewed medical publications,abstracts and symposia have been presented on the favorable technicaldifferentiation of our tests over competitive products.

Toextend the product offering for current product lines, and to complement ourpremium-priced, existing assays, we plan to add products from strategicpartners.  Our current product menu,commercialized under the trademarks “REAADS” and “Corgenix,” includes thefollowing:

*Autoimmune Disease Products*

Our ELISA Autoimmune Disease Product line consists oftwenty-one products, including tests for antinuclear antibodies(ANA) screening, dsDNA, Sm, SM/RNP, SSA, SSB, Jo-1, Scl-70, Histones,Centromere, Mitochondria, MPO, PR3, Thyroglobulin, LKM-1, anti Ribosomal P,BP-180, DSG-1, DSG-3, anti-polymer antibodies and thyroid peroxidase.  In the fiscal year ended June 30, 2007, theseproducts represented approximately        %of our total product sales.

We manufacture two of these products; the remainderare manufactured for us by other companies and sold by us through ourdistribution network.  The products areused for the diagnosis and monitoring of autoimmune diseases including RA, SLE,Mixed Connective Tissue Disease, Sjogren’s Syndrome, Dermatopolymyositis andScleroderma.

Theseautoimmune disease products are formatted in the ELISA Microplate format, andare differentiated from the competition by their user convenience.  Historically, diagnostic tests utilizedantiquated technologies that presented significant limitations for the clinicallaboratory environment, including greater labor requirements and the need for a

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subjectiveinterpretation of the results.  Our ELISAautoimmune tests overcome these technology shortfalls, permitting a clinicallaboratory to automate its tests, lowering the laboratory’s labor costs as wellas providing objectivity to test result interpretation.

*Vascular Disease; AntiphospholipidAntibody Testing Products*

Wemanufacture and market eleven products for antiphospholipid antibody testing,which in the fiscal year ended June 30, 2007 represented approximately 45.7% ofour total product sales.  These include:aCL IgG, aCL IgA, aCL IgM; anti-phosphatidylserine (“aPS”) IgG, aPS IgA, aPSIgM; anti-ß2-Glycoprotein I (“aß2GPI”) IgG, aß2GPI IgA, and aß2GPI IgM; andanti-Prothrombin (“aPT”) IgG and IgM.

ELISAtechnology is typically used to measure the antibodies directed againstmembrane anionic phospholipids (i.e., negatively charged molecules such ascardiolipin and phosphatidylserine) or their associated plasma proteins,predominantly beta-2 glycoprotein 1). Antiphospholipid antibodies are associated with the presence of bothvenous and arterial thrombosis (clotting), thrombocytopenia (low platelet countthat can result in bleeding), and recurrent miscarriage.  These auto antibodies are frequently found inpatients with systemic lupus erythematosis (SLE), Lupus and other autoimmunediseases, as well as in some individuals with no apparent previous underlyingdisease.

These antibodies are also found in patients withantiphospholipid syndrome, an important medical condition with serious clinicalmanifestations such as chronic and recurrent venous (deep vein) thrombosis, aswell as arterial thromboembolic disease including heart attacks, strokes andpulmonary embolism. Thrombocytopenia has been attributed to the temporaryremoval of platelets from circulation during a thrombotic episode (clotformation).

*Vascular Disease: Bleeding/ClottingRisk Factors*

We market twenty tests forbleeding and clotting risk factors which in the fiscal year ended June 30, 2007represented approximately 22.5% of our total product sales.  We manufacture five products, and fifteenothers are manufactured for us by other companies. Specialized tests include:Protein C Antigen ELISA, Protein S Antigen ELISA, Monoclonal Free Protein SELISA, von Willebrand Factor Antigen ELISA, von Willebrand Factor ActivityTest; abp Ristocetin, PIFA (HIT/PF4 rapid assay) and Collagen Binding Assay. CorgenixUK also distributes twelve OM products for routine coagulation testing.

These products areuseful in the diagnosis of certain clotting and bleeding disorders includingvon Willebrand’s Disease (Hemophilia B).

Hemostasis(the normal stable condition in which there is neither excessive bleeding norexcessive clotting) is maintained in the body by the complex interaction of theendothelial cells of blood vessels, coagulation cells such as platelets,coagulation factors, lipids (cholesterol) and antibodies (autoantibodies).  All play important roles in maintaining thishemostasis.  In clinical situations inwhich an individual demonstrates excessive clotting or bleeding, a group oflaboratory tests is typically performed to assess the source of the disorderusing the products that we market.

*Aspirin Effectiveness Assay*

The AspirinWorks® Test Kit is a simple urinetest that measures an individual’s response to aspirin dosage and allowsphysicians to adjust the dosage or recommend alternative therapy.  Recent reports indicate that up to 25%  of individuals may be non-responsive toaspirin’s benefits, and are more than three times more likely to die from heartdisease.

*Liver Disease Products*

Wemanufacture a test to quantitate hyaluronic acid (“Hyaluronic Acid” or “HA”) ina Microplate format which in the fiscal yearended June 30, 2007 represented approximately 13.4% of our total product sales.  The product was distributed

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through the Chugaidistribution network in Japan from 1996 to 2002, and has been distributedthrough Corgenix UK in the United Kingdom since 1998.  On June 30, 2001, we signed a licenseagreement with Chugai (now known as Fujirebio) whereby we have co-exclusiverights to manufacture and market the HA product worldwide except for Japan. On December 12, 2006, the HA License Agreementwas amended and extended until the expiration of all of the patents.  See “— Chugai (Fujirebio) StrategicRelationship.”

HyaluronicAcid is a component of the matrix of connective tissues, found in synovialfluid of the joints where it acts as a lubricant and for water retention.  It is produced in the synovial membrane andleaks into the circulation via the lymphatic system where it is quickly removedby specific receptors located in the liver. Increased serum levels of  HA have been described in patients withrheumatoid arthritis due to increased production from synovial inflammation,and in patients with liver disease, particularly Hepatitis C, due tointerference with the removal mechanism. Patients with cirrhosis will have the highest serum HA levels, whichcorrelate with the degree of liver involvement.

**Technology**

OurELISA application technology was developed to provide the clinical laboratorywith a more sensitive, specific, and objective technology to measure clinicallyrelevant antibodies in patient serum samples. High levels of these antibodies are frequently found in individualssuffering from various immunological diseases, and their serologicdetermination is useful not only for specific diagnosis but also for assessingdisease activity and/or response to treatment. To accomplish these objectives, our current product line applies theELISA technology in a 96-Microplate format as a delivery system. ELISA providesa solid surface to which purified antigens are attached, allowing theirinteraction with specific auto antibodies during incubation.  This antigen-antibody interaction is thenobjectively measured by reading the intensity of color generated by anenzyme-conjugated secondary antibody and a chemical substrate added to thesystem.

Our technology overcomes two basic problems seen inmany other ELISA systems. First, the material coated onto the plate can beconsistently coated without causing significant alteration of the molecularstructure (which ensures maintenance of immunologic reactivity), and thestability of these coated antigens on the surface can be maintained (whichprovides a product shelf life acceptable for commercial purposes).  Our proprietary immunoassay technology isuseful in the manufacture of ELISA tests for the detection of many analytes(target molecules) for the diagnosis and management of immunological diseases.

Ourtechnology results in products generally demonstrating performancecharacteristics that exceed those of competitive testing procedures.  Many testing laboratories worldwide subscribeto external quality control systems or programs conducted by independent,third-party organizations.  These programstypically involve the laboratory receiving unknown test samples on a routinebasis, performing certain diagnostic tests on the samples, and providingresults of their testing to the third party. Reports are then provided by the third party that tells the testinglaboratory how it compares to other testing laboratories in the program.  Several of our products are included inlaboratory surveys periodically conducted by unaffiliated entities, and ourproducts routinely demonstrate good performance and/or reproducibility whencompared to other manufacturers included in such survey.  Examples of such surveys include the April2007 College of America Pathologists (CAP) survey and the UKNEQAS (UK NationalExternal Quality Assessment Service).

Ourproducts typically require less hands-on time by laboratory personnel ascompared to most other ELISA assays and provide an objective, quantitative orsemi-quantitative interpretation to improve and standardize the clinicalsignificance of results.  We believe thatour proprietary technology will continue to be the mainstay for our future diagnosticproducts.  Most of the products indevelopment will incorporate our basic technology.

Additionaltechnologies may be required for some of the newly identified tests.  We believe that, in addition to internalexpertise, most technology and delivery system requirements would be availablethrough joint venture or licensing arrangements or through acquisition**.**

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**Delivery Systems**

Most of our current products employ the Microplatedelivery system using ELISA technology. This format is universally accepted in clinical laboratory testing andrequires routine equipment currently available in most clinical labs.

**Sales and Marketing**

Weprimarily market and sell our diagnostic products to the clinical laboratorymarket, both hospital based and free standing laboratories.  We utilize a diverse distribution program forour products.  Our labeled products aresold directly to testing laboratories in the U.S. through sales representatives(both employees and  independentcontractors).  Internationally, ourlabeled products are sold through established diagnostic companies inArgentina, Australia, Austria, Belgium, Brazil, Canada, Chile, Denmark, andthrough sales representatives in Egypt, Finland, France, Germany, Greece,Guatemala, Hong Kong, Hungary, India, Ireland, Israel, Italy, Japan, Korea,Kuwait, Lebanon, Malaysia, Mexico, The Netherlands,  Norway, Paraguay, Peru, Portugal, SaudiArabia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland,Thailand, Turkey, the United Kingdom, and Uruguay.  We are continually seeking opportunitieswhich will provide access to additional markets worldwide. Our agreements withinternational distribution partners are on terms that are generally terminableby us if the distributor fails to achieve certain sales targets.  Either the Company or the respectivedistributor, given the occurrence of certain events, has the right, by givingwritten notice to the other party, to terminate the distribution agreement.  We have also established private labelproduct agreements with several U.S. and European companies.  We have international distributionheadquarters in the United Kingdom and will add direct commercialization anddistribution in selected additional countries as appropriate.  For the fiscal year ended June 30, 2007, internationalsales represented approximately 26.4% of the Company’s total sales.

We have an activemarketing and promotion program for our diagnostic testing products.  We publish technical and marketingpromotional materials, which we distribute to current and potentialcustomers.  We attend major industrytrade shows and conferences, and our scientific staff actively publishesarticles and technical abstracts in peer review journals.

**Manufacturing**

The manufacturing process for our products utilizes asemi-automated production line for the manufacturing, assembly and packaging ofour ELISA Microplate products.  Ourcurrent production capacity is 27,000 tests per day with a single eight-hourshift.  Since 1990, we have successfullyproduced over 12 million tests in our Colorado facility, and we expect thatcurrent manufacturing capability will be sufficient to meet expected customerdemand for the foreseeable future.

Our manufacturing operations are fully integrated andconsist of raw material purification, reagent and Microplate processing,filling, labeling, packaging and distribution. We have considerable experience in manufacturing our products using ourproprietary technology.  We expectincreases in the demand for our products and have prepared plans to increaseour manufacturing capability to meet that increased demand.  We also maintain an ongoing investigation ofscale-up opportunities for manufacturing to meet future requirements.  We anticipate that production costs willdecline as more products are added to the product menu in the future,permitting us to achieve greater economies of scale as higher volumes areattained.  We have registered ourfacility with the FDA.

### **Quality System Regulations Requirements ForOur Products**

In April 1999, we received ISO 9001:1994certification from TUV Product Service GmbH, a world leader in medical devicetesting and certification.  ISO 9001represents the international standard for quality management systems developedby the International Organization for Standardization, or ISO, to facilitateglobal commerce.  To ensure continuedcompliance with the rigorous standards of ISO 9001, companies must undergoregularly scheduled assessments and re-certification every year.  The ISO 9001 initiative is an importantcomponent in its commitment to maintain excellence.  Corgenix received re-certification inNovember 1999 and 2000, and in July 2002, received EN ISO 9001:1996,and EN ISO

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13485:2000certification through TUV Rhineland of North America.  We have been re-certified annually since2002. In fiscal 2006, we certified to ISO 13485:2003.

### **Corgenix’s Manufacturing Process Starts WithThe Qualification Of Raw Materials**

Our manufacturing process starts with the qualificationof raw materials.  The microplates arethen coated and bulk solutions prepared. The components and the microplates are checked for ability to meetpre-established specifications by our quality control department.  If required, adjustments in the bulksolutions are made to provide optimal performance and lot-to-lotconsistency.  The bulk solutions are thendispensed and packaged into planned component configurations.  The final packaging step in the manufacturingprocess includes kit assembly, where all materials are packaged into finishedproduct.  The finished kit undergoes onefinal performance test by our quality control department.  Before product release for sale, our qualityassurance department must verify that all quality control testing andmanufacturing processes have been completed, documented and have met allperformance specifications.

Themajority of raw materials and purchased components used to manufacture ourproducts are readily available.  We haveestablished good working relationships with primary vendors, particularly thosethat supply unique or critical components for our products.  The components of our products includechemical, biological and packaging supplies that are generally available fromseveral suppliers, except certain antibodies and other critical components,which we purchase from single suppliers. We mitigate the risk of a loss of supply by maintaining a sufficientsupply of such antibodies to ensure an uninterrupted supply for at least threemonths.  We have also qualified secondvendors for all critical raw materials and believe that we can substitute a newsupplier with respect to any of these components in a timely manner.  If, for some reason, we lose our mainsupplier for a given material, there can be no assurances that we will be ableto substitute a new supplier in a timely manner and failure to do so couldimpair the manufacturing of certain of our products and thus have a materialadverse effect on our business, financial condition and results of operations.

Approximately 26.4% of our product revenues are derived fromsales outside of the U.S.  Internationalregulatory bodies often establish varying regulations governing productstandards, packaging and labeling requirements, import restrictions, tariffregulations, duties and tax requirements. To demonstrate our commitment to quality in the internationalmarketplace, we obtained ISO certification and have “CE” marked all of ourproducts as required by the European In Vitro Diagnostic Directive 98/79/EC.

Since 1990, we have entered into several contractmanufacturing agreements with other companies whereby we manufacture specificproducts for the partner company.  Weexpect to continue investigating and evaluating opportunities for additionalagreements.

**Chugai (Fujirebio) Strategic Relationship**

The relationship between Corgenix and Chugai DiagnosticsScience Co., Ltd. was established in June 1993.  In September 2002, Chugai was merged intoFujirebio, Inc., a large Japanese Company based in Tokyo, Japan. Currently,except for the ongoing HA License Agreement described below, there are no salesto or operations related to Fujirebio.

*HA License Agreement*.  On June 30, 2001, Corgenixand Chugai executed a license agreement, which we refer to as the HA LicenseAgreement, with Chugai Diagnostic Science, Co., Ltd., a Tokyo basedpharmaceutical company that subsequently merged into Fujirebio, Inc., a largeJapanese diagnostic company based in Tokyo and a leader in the field ofimmunoserology.  Corgenix was grantedco-exclusive worldwide rights to manufacture and market the HA product (exceptfor Japan).  The HA License Agreement wasinitially for a five-year period with certain extension rights.  On December 12, 2006, the HA LicenseAgreement was amended and extended until the expiration of all of thepatents.  The HA License Agreementestablishes certain performance requirements for Corgenix, and provides earlycancellation of exclusivity if Corgenix does not meet those performancegoals.  The HA License Agreement is theonly international distribution right currently granted by Chugai to Corgenix,and was formally assumed by Fujirebio.

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**Other Strategic Relationships**

An integral part of our strategy has been and willcontinue to be entering into strategic alliances as a means of accessing uniquetechnologies or resources or developing specific markets.  The primary aspects of our corporatepartnering strategy with regards to strategic affiliations include:

·                  Companies that are interested in co-developing diagnostic tests that useour technology;

·                  Companies with complementary technologies;

·                  Companies with complementary products and novel disease markers; and/or

·                  Companies with access to distribution channels that supplement ourexisting distribution channels.

In furtherance of the foregoing strategies, we maintaina revenue-producing strategic relationship with Medical & BiologicalLaboratories Co., Ltd., (“MBL”).  MBL isa medical diagnostic company located in Nagoya, Japan.  In March 2002, we signed a distributionagreement with RhiGene, Inc., a Des Plaines, Illinois based company which was awholly owned subsidiary of MBL, which granted us exclusive rights to distributeRhiGene’s complete diagnostic line of autoimmune testing products in North andSouth America.  The arrangement alsoprovided us with rights to certain other international markets.  In July 2002, MBL made a $500,000 strategicinvestment in the common stock of our Company. As part of the investment agreement, MBL has warrants to purchaseadditional shares of our common stock for a total potential investment of $1,000,000.

On March 31, 2005, our distribution agreement withRhiGene expired, and the Company signed a new distribution and OEM SupplyAgreement with MBL International, Inc. (“MBLI”), a wholly owned subsidiary ofMBL, which grants the Company non-exclusive rights to distribute MBL’s completediagnostic line of autoimmune testing products in the U.S. and exclusivedistribution rights to the OEM label products worldwide excluding the U.S.,Japan, Korea and Taiwan.  In addition, onAugust 1, 2005 the Company and MBL executed an Amendment to the Common StockPurchase Agreement and Common Stock Purchase Warrant wherein one-half, or440,141, of the original redeemable shares were exchanged for a three-yearpromissory note payable with interest at prime plus two percent (8.25% as ofJune 30, 2007) with payments having commenced in September, 2005.  The shares exchanged for the promissory notewill be returned to the Company quarterly on a pro rata basis as payments aremade on the promissory note.  As of June30, 2007, a total of****211,264 shareshave been returned to the Company.  Theremaining 440,141 shares must be redeemed by the Company at $0.568 per share onAugust 1, 2008 for any shares still owned at that time by MBL but only to theextent that MBL has not realized at least $250,000 in gross proceeds upon thesales of its redeemable shares in the open market for the time period August 1,2006 through August 30, 2008.  Finally,the warrants originally issued to MBL to purchase 880,282 shares have beenextended to August 31, 2008 and re-priced from $0.568 per share to $0.40 pershare.

We have established OEM agreements with severalinternational diagnostic companies, which in fiscal 2007 representedapproximately 17.7% of our total sales. Under some of these agreements, we manufacture selected products in thesame configuration as the Company’s own products, under the partner’s label forworldwide distribution.  In other OEMagreements, the Company manufactures diagnostic kits according to the partner’sunique specifications under the partner’s label**.**

**Research and Development**

Wedirect our research and development efforts towards development of new productson our proprietary platform ELISA technology in the Microplate format, as wellas applying our technology to automated laboratory testing systems.  In that regard, we have organized ourresearch and development effort into three major areas: (i) new productdevelopment, (ii) technology assessment, and (iii) technical and productsupport.

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Ourtechnical staff evaluates the performance of reagents (prepared internally orpurchased commercially), creates working prototypes of potential products,performs internal studies, participates in clinical trials, manufactures pilotlots of new products, establishes validated methods that can be manufacturedconsistently, creates documentation required for manufacturing and testing ofnew products, and collaborates with our quality assurance department to satisfyregulatory requirements and support regulatory clearance.  They are responsible for assessing theperformance of new technologies along with determining the technicalfeasibility of market introduction, and investigating the patent/license issuesassociated with new technologies.

Ourtechnical staff is responsible for supporting current products on the marketthrough scientific investigation, and is responsible for design transfer tomanufacturing of all new products developed. They assess the performance and validate all externally-sourced productsin order to confirm that these products meet our performance and qualitystandards.

Thetechnical staff includes individuals skilled in immunology, assay development,protein biochemistry, biochemistry and basic sciences.  We maintain facilities to support ourdevelopment efforts at the Broomfield, Colorado headquarters. Group leaders arealso skilled in planning and project management under FDA-mandated designcontrol.  See “— Regulation.”

Duringfiscal 2007 and 2006, we spent $812,531 and $574,021, respectively, forresearch and development.  The increasewas primarily attributable to increased labor-related expenses, rent expenseand purchases related to additional research and development projects.  Of the fiscal 2007 expenses, approximately91% of the expenditures for research and development expenses were internalexpenditures exclusive of outside consultants, legal, etc.** **In fiscal 2008, we expectexpenditures for research and development to decline slightly versus fiscal2007 due to arriving at the end of two major new product introductory cycles.**** Research anddevelopment contract revenue (specific product development programs funded by astrategic partner) amounted to $77,465 and $20,334 for the 2007 and 2006 fiscalyears ended June 30.  The contractrevenue was higher in 2007 primarily due to the Lasa Virus program mentionedbelow.

**Products and Technology in Development**

Weintend to expand our product menu through internal development, development incollaboration with strategic partners and acquisition and/or licensing of newproducts and technologies.  We arecurrently working with partners to develop additional tests to supplement theexisting product lines.  The followingsummarizes our current product and technology development programs:

*Vascular Disease Testing Products*

Weare one of the market leaders in development of innovative tests in theantiphospholipid market, and expect to continue developing products in thisarea to ensure our ongoing strong market position.  For the past four years, we have beendeveloping products in the area of Oxidized LDL, a technology that assessesarterial thrombosis and atherosclerosis. Our technology, which we have trademarked “AtherOx,” has the potentialto significantly alter the standard of lipoprotein testing and cardiovascularrisk assessment. Product development for three products has been completed, andthose products launched into the international markets. We filed the initialapplication with the FDA in March 2006. In July 2007, the Company submitted a510(k) Premarket Notification to the FDA for the Company’s Anti-AtheroOxTM TestKit. See “*Regulation”. *This new laboratory test utilizes the Company’s patentedAtherOx technology to IgG antibodies to complexes formed by oxidizedlow-density lipoprotein (oxLDL) with beta2-glycoprotein 1 (beta2GP1) inindividuals with systemic lupus erythematosus (SLE) and lupus-like disorders(antiphospholipid syndrome).

*Fibromyalgia*

Weare in the later development and regulatory submission stages for a uniqueassay for testing patients with fibromyalgia. The assay detects antibodies topolymers, which are present in a high percentage of patients suffering from

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fibromyalgia, alsoreferred to as “chronic pain syndrome.” We expect, along with Autoimmune Technologies, LLC, our strategicpartner, to complete clinical studies in fiscal 2007 and 2008.  The time-frame for the filing of a pre-marketapproval application with the FDA has yet to be determined.

*AspirinEffectiveness*

We have established a strategic collaboration with CCCand McMaster University in the development of an assay to assess aspirinresistance which may prove to be very useful in the prevention of cardiacdisease. We filed applications with the FDA for this product, trademarked “AspirinWorks”in July 2006 and it was cleared by the FDA in May 2007.

*Lassa Virus Program*

Wehave establisheda strategic collaboration with Autoimmune, Biofactura, Inc. (“Biofactura”),the U.S. Army Medical Research Institute of Infectious Diseases (“USAMRIID”)and Tulane University (“Tulane”) to develop a group of products to detectseveral old world and new world viruses identified as potential bio-terrorismagents.  The work is being done under agrant from the National Institute of Allergy and Infectious Diseases (“NIAID”)over a three-year period which began in September 2006.

**Competition**

Competitionin the human medical diagnostics industry is significant.  Our competitors range from development stagediagnostics companies to major domestic and international pharmaceutical andbiotechnology companies.  Many of thesecompanies have financial, technical, marketing, sales, manufacturing,distribution and other resources significantly greater than we do.  In addition, many of these companies havename recognition, established positions in the market and long standingrelationships with customers and distributors. The diagnostics industry continues to experience significantconsolidation in which many of the large domestic and international healthcarecompanies have been acquiring mid-sized diagnostics companies, furtherincreasing the concentration of resources. However, competition in diagnostic medicine remains highly fragmented,with no company holding a dominant position in autoimmune or vasculardiseases.  There can be no assurance thatnew, superior technologies will not be introduced that could be directlycompetitive with or superior to our technologies.

Ourprimary competitors include Inova Diagnostics, Inc., DIASORIN, DiagnosticaStago, American Bioproducts, Helena Laboratories Corporation (an existinglicensee of Corgenix technology), Hemagen Diagnostics, The Binding Site andIVAX Diagnostics (Diamedix).  We competeagainst these companies and others on the basis of product performance,customer service, and to a lesser extent, price.

### **Patents, Trade Secrets and Trademarks**

*The REAADS Technology Patent*.  We have built a strong patent andintellectual property position around our proprietary application of ELISAtechnology, which is used in a majority of our existing products.  We hold one U.S. patent (Lopez, et al. “methodand diagnostic test kit for detection of anti-dsdna antibodies”) which coversthe critical manufacturing step in the majority of our existing ELISAproducts.  This patent expires in 2010.

*The Hyaluronic Acid Technology Patents*.  The HA product is protected by U.S., Japaneseand European patents held by Chugai (Fujirebio). As part of the agreements withChugai and assumed by Fujirebio, we have a license to use the Chugai patents tomanufacture this product for worldwide distribution, and marketing rightsworldwide except Japan.  These rightsexpire in the various countries as the related patents expire.  The first patent expires in February 2008with the last one expiring in October 2009. The patent in the U.S. expires in May 2008.  See “— Chugai (Fujirebio) Strategic Relationship.”

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*The AtherOx Technology Patents*.  Through a Japanese collaboration, we haveexclusive worldwide rights (except Japan) for the clinical testing market usingthe unique AtherOx technology.  To date,we have one U.S. patent with respect to the AtherOx technology, and haveseveral U.S. and European patents pending.

*The Antipolymer Antibody Patents*.  The antipolymer (APA) assay which we havedeveloped and are marketing worldwide in collaboration with our strategicpartner Autoimmune Technologies, LLC, is covered by an extensive group ofworldwide patents and patents pending owned by Tulane University, which hasgranted Autoimmune Technologies exclusive worldwide rights.** **These rights expire the later often years after the first commercial sale in each country or the expiration ofthe respective country patent.  We do nothave any distribution rights for this product. All sales have been to the patent holder, Autoimmune Technologies, LLCfor use in their clinical studies.

*Aspirin Effectiveness Technology Patents*.  Products in development with our strategicpartner CCC are covered by a group of worldwide patents pending owned byMcMaster University which has granted Corgenix and CCC exclusive worldwiderights.  In July 2007, the first of theU.S, patents was issued by the U.S. Patent and Trademark office.  The U.S. patent was approved for thistechnology in August 2006.

Patentapplications in the U.S. are maintained in secrecy until patents areissued.  There can be no assurance thatour patents, and any patents that may be issued to us in the future, willafford protection against competitors with similar technology.  In addition, no assurances can be given thatthe patents issued to us will not be infringed upon or designed around byothers or that others will not obtain patents that we would need to license ordesign around.  If the courts upholdexisting or future patents containing broad claims over technology used by us,the holders of such patents could require us to obtain licenses to use suchtechnology.  In fiscal 2007, the Companydid not incur any costs to defend our patents. See “Part II.  Item 6.  Management’s Discussion and Analysis —Forward-Looking Statements and Risk Factors — Uncertainty of Protection ofPatents, Trade Secrets and Trademarks.”

Wehave registered our trademark “REAADS” on the principal federal trademarkregister and with the trademark registries in many countries of the world.  This trademark is eligible for renewal in2006 and will expire in 2007.  We intendto renew this trademark. The trademark “Corgenix” was approved in September2000.  The trademark is currently in theprocess of being renewed by our legal counsel, and this will  be completed prior to its expiration.

Whereappropriate, we intend to obtain patent protection for our products andprocesses.  We also rely on trade secretsand proprietary know-how in our manufacturing processes.  We require each of our employees, consultantsand advisors to execute a confidentiality agreement upon the commencement ofany employment, consulting or advisory relationship with us.  Each agreement provides that all confidentialinformation developed or made known to the individual during the course of therelationship will be kept confidential and not be disclosed to third parties exceptin specified circumstances.  In the caseof employees, the agreements provide that all inventions conceived of by anemployee shall be the exclusive property of the Company.

Themajority of our product sales, approximately 85% for the fiscal year ended June30, 2007 and 90% in fiscal 2006, were products that utilized our proprietarytechnology and marketed under our REAADS trademark.

**Regulation**

Thetesting, manufacturing and sale of our products are subject to regulation bynumerous governmental authorities, principally the FDA and foreign regulatoryagencies.  The FDA regulates the clinicaltesting, manufacture, labeling, distribution and promotion of medical devices,which includes diagnostic products. We are limited in our ability to commencemarketing or selling any new diagnostic products in the U.S. until clearance isreceived from the FDA.  In addition,various foreign countries in which our products are or may be sold impose localregulatory requirements.  The preparationand filing of documentation for FDA and foreign regulatory review can be alengthy, expensive and uncertain process.

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Inthe U.S., medical devices are classified by the FDA into one of three classes(Class I, II or III) on the basis of the controls deemed reasonably necessary bythe FDA to ensure their safety and effectiveness.  Class I devices are subject to generalcontrols such as labeling, pre-market notification and adherence to QualitySystem Regulations, or QSR requirements. Class II devices are subject to general and special controls (e.g.,performance standards, post-market surveillance, patient registries and FDAguidelines).  Generally, Class IIIdevices are those that must receive pre-market approval by the FDA to ensuretheir safety and effectiveness such as life-sustaining, life-supporting andimplantable devices or new devices that have been found not to be substantiallyequivalent to legally marketed devices. All of our current products and products under development are or areexpected to be classified as Class II or Class III devices.

Beforea new device can be introduced in the market, we must obtain either FDAclearance or approval, depending on FDA guidelines, through either clearance ofa 510(k) pre-market notification or approval of a pre market approval application,which is a more extensive and costly application when compared to a pre-marketnotification**,**due to the requirements for moreextensive clinical trials, etc.  All ofour products have been cleared using a 510(k) application, and we expect that mostfuture products will also qualify for clearance using a 510(k) application (asdescribed in Section 510(k) of the Medical Device Amendments to the F D & CAct of 1938).

Historically,we have been able to obtain 510(k) pre-market clearance in less than 90 daysfrom submission, but the process may take longer.  The FDA may determine that a proposed deviceis not substantially equivalent to a legally marketed device or that additionalinformation is needed before a substantial equivalence determination can bemade.  A “not substantially equivalent”determination, or a request for additional information, could prevent or delaythe market introduction of new products that fall into this category.  For any devices that are cleared through the510(k) process, modifications or enhancements that could significantly affectsafety or effectiveness, or constitute a major change in the intended use ofthe device, will require new 510(k) submissions.  There can be no assurance that we will beable to obtain necessary regulatory approvals or clearances for our products ona timely basis, if at all, and delays in receipt of or failure to receive suchapprovals or clearances, the loss of previously received approvals orclearances, limitations on intended use imposed as a condition of suchapprovals or clearances, or failure to comply with existing or futureregulatory requirements could have a material adverse effect on our business,financial condition and results of operations. See “Part II.  Item 6.  Management’s Discussion and Analysis —Forward-Looking Statements and Risk Factors — Governmental Regulation ofDiagnostic Products.”

Ourcustomers using diagnostic tests for clinical purposes in the U.S. are alsoregulated under the Clinical Laboratory Information Act of 1988,(“CLIA”).  CLIA is intended to ensure the quality andreliability of all medical testing in laboratories in the U.S. by requiringthat any health care facility in which testing is performed meets specifiedstandards in the areas of personnel qualification, administration,participation in proficiency testing, patient test management, quality control,quality assurance and inspections.  Theregulations have established three levels of regulatory control based on testcomplexity: “waived,” “moderately complex” and “highly complex.”  Our current ELISA tests are categorized as “moderatelycomplex” tests for clinical use in the U.S. Under CLIA, all laboratories performing high or moderately complex testsare required to obtain either a registration certificate or certification ofaccreditation from the Centers for Medicare and Medicaid Services(“CMS”),formerly the U.S. Health Care Financing Administration.  The application of CLIA to our operations andfacilities and future administrative interpretations of CLIA could have anadverse impact on the potential market for our future products by increasingthe cost and regulatory burden on our operations and facilities.

Weare subject to numerous federal, state and local laws relating to such mattersas safe working conditions, manufacturing practices, environmental protection,fire hazard control and disposal of hazardous or potentially hazardoussubstances.  We may incur significantcosts to comply with these laws and regulations in the future.

**Reimbursement**

Currently,our largest market segments are hospital laboratories and commercial referencelaboratories in the U.S. Payment for testing in these segments is largely basedon third-party payor reimbursement.  Thelaboratory that performs the

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test will submitan invoice to the patient’s insurance provider or to the patient if he is notcovered by an insurance program.  Eachdiagnostic procedure (and in some instances, specific technologies) is assigneda current procedural terminology(“CPT”) code by the American MedicalAssociation.  Each CPT code is thenassigned a reimbursement level by CMS. Third party insurance payors typically establish a specific fee to bepaid for each code submitted.  Thirdparty payor reimbursement policies are generally determined with reference tothe reimbursement for CPT codes for Medicare patients, which themselves aredetermined on a national basis by CMS.

**Employees (for Consolidated Entity)**

As of July 31, 2007, we employed 40 employeesworldwide (49 employees in 2006).  Thenumber of employees has declined from a year ago primarily as a result of ourexpense-reduction efforts discussed below. Of the current 40 employees, 38 are full-time, and 2 are part-time.  Of these, 4 hold advanced scientific ormedical degrees.  None of Corgenix’semployees are covered by a collective bargaining agreement.  We believe that the Company maintains goodrelations with our employees.

**Item 2.  Descriptionof Property.**

OnFebruary 8, 2006, we entered into a Lease Agreement (the “Lease”) with YorkCounty, LLC, a California limited liability company (“Landlord”) pursuant towhich we leased approximately 32,000 rentable square feet (the “Property”) ofLandlord’s approximately 102,400 square foot building, commonly known asBroomfield One and located at 11575 Main Street, Broomfield, Colorado80020.  The Property is part of Landlord’smulti-tenant real property development known as the Broomfield CorporateCenter.  We use the Property for ourheadquarters, laboratory research and development facilities and productionfacilities.

Onthe following dates, we executed the following amendments to the Lease:

·                 December 1,2006- The First Amendment to the Lease Agreement (the “First Amendment”)established July 6, 2006 as the date of the commencement of the Lease

·                 June 19,2007- The Second Amendment to the Lease Agreement (the “Second Amendment”)redefined the amount of available rental space from 32,480 to 32,000 squarefeet and recalculated the lease rates per square foot; and

·                 July 19,2007- The Third Amendment to the Lease Agreement (the “Third Amendment”)established the base rent matrix for the period 11/28/2013 to 12/05/2013, whichwas inadvertently omitted in the Second Amendment.

The term of theLease (the “Term”) is seven years and five months and commenced on July 6,2006, with tenant options to extend the Term for up to two five-yearperiods.  We have a one time right offirst refusal to lease contiguous premises.

Initially,there was no base lease rate payable on 25,600 square feet of the Property,plus estimated operating expenses of $1.61 per square foot.

Thebase lease rate payable on 25,600 square feet of the Property increased to $4.00 per square foot on January 28, 2007,plus amortization of tenant improvements of $5.24 per square foot, plus estimatedoperating expenses of $1.61 per square foot. The base lease rate on 25,600 square feet  of the Property increases to $5.64 per squarefoot on January 28, 2008, with fixed annual increases each January 28thereafter during the initial Term, plus the amortization of tenantimprovements of $5.24 per square foot, and estimated operating expenses of$1.61 per square foot.

Initially,there was no base lease rate payable on 6,400 square feet of the Property, plusestimated operating expenses of $1.61 per square foot.  The base lease rate on 6,400 square feet ofthe Property increases to $3.00 per square foot commencing on August 28, 2007,and increases to $3.09 on January 28, 2008, with fixed annual increases eachJanuary 28

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thereafterduring the initial Term, plus estimated operating expenses of $1.61 per squarefoot.

Thus,the estimated total rent (this is dependent upon the actual operating expenses)on the entire 32,000square feet of the Property is initially $1.61 per squarefoot, then increased to approximately $9.00 per square foot on January 28,2007, then increased to approximately $9.60 per square foot on August 28 2007,then increases to approximately $10.93 per square foot on January 28, 2008,with annual increases in the base lease rate each January 28 thereafter duringthe initial Term, up to an estimated total rent of $13.18 per square footduring the final year of the initial Term.

Thebase lease rate for an extension period is 100% of the then prevailing marketrental rate (but in no event less than the rent for the last month of the thencurrent Term) and shall thereafter increase annually by 3% for the remainder ofthe applicable extension period.

Thefacility leased by our subsidiary, Corgenix UK Ltd., consists of “office park”type space with offices and storage space. They currently lease approximately2,000 square feet. The rent payments, which includes utilities and taxes, isapproximately $4,500 per month.  Thefacility is rented on a month-by-month basis, with a 90 day notice require fortermination of the lease.

Wehave not invested in any real estate or real estate mortgages.

**Item 3.  LegalProceedings**

OnJanuary 4, 2007, we filed a complaint in the U.S. District Court for theDistrict of Colorado against Biosafe Laboratories, Inc., a corporationorganized and existing under the laws of the State of Illinois.  The complaint stated, among other things,that Corgenix and Biosafe were parties to a non-binding Letter of Intent datedSeptember 12, 2006 (the “LOI”), under which the companies explored thepossibility of a licensing arrangement between them for the sale of some ofBiosafe’s products.  Upon execution ofthis non-binding LOI, we paid to Biosafe a deposit of $250,000 (the “RefundableDeposit”).  The LOI specifically requiredBiosafe to refund $225,000 of that deposit to us in the event that a bindingagreement was not reached between the parties . A binding agreement was neverreached between the two companies and even though Biosafe was obligated torefund the Refundable Deposit to us and demand was made by us for saidRefundable Deposit, Biosafe refused to return the Refundable Deposit.  We brought suit against Biosafe, and soughtrelief in the form of, but not limited to, the refund of the RefundableDeposit, in addition to all damages sustained.

OnFebruary 20, 2007, Biosafe disputed the above claims and filed a counterclaimagainst us, which stated, among other things, that we failed to go forward withthe execution of the binding agreement after the tems of said agreement were fullynegotiated and drafted and that the required funding had been secured.  It also claimed that we failed to disclose,in a timely fashion, that we needed Board of Director approval prior toexecution of the binding agreement, and overall did not deal with Biosafe ingood faith and with fair dealing. Biosafe’s counterclaim claimed damages of$1,000,000.

On March 12, 2007,we filed our reply to the above counterclaims denying the validity of all ofthe counter claims by Biosafe and again requesting that judgment be entered inour favor and that we be awarded our $225,000 deposit and any other costs.

OnJune 22, 2007, Corgenix and Biosafe executed a Settlement Agreement (the “Agreement”).  The Agreement brought to an end litigationbetween the Company and Biosafe relating to theRefundable Deposit.  The Agreement required that Biosafe pay usthe sum of $125,000.00 no later than July 2, 2007.  This amount was in fact paid to us on July 2,2007.  The Agreement also required boththe Company and Biosafe to dismiss, with prejudice, all claims related to theLetter of Intent.  The Agreement providedthat each party bear its own costs and attorneys fees.

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**Item 4.  Submissionof Matters to a Vote of Security-Holders.**

# The following proposals were voted by the shareholdersat the April 26, 2007 Annual Shareholders’ Meeting:

# **Proposal1 – Election of Directors**

To elect seven (7)directors to serve until the 2008 annual meeting of shareholders and untiltheir successors have been duly elected and qualified;

Dr. Luis Lopez: 8,885,420 votes for; 377,438 votes withheld

C. David Kikumoto: 8,891,690 votes for; 371,168 votes withheld

Larry G. Rau: 8,889,690 votes for; 373,168 votes withheld

Charles H. Scoggin: 8,885,420 votes for; 377,438 votes withheld

Douglass T. Simpson: 8,881,620 votes for; 381,238 votes withheld

Robert Tutag: 8,891,690 votes for; 371,168 votes withheld

Dennis Walczewski:8,891,590 votes for; 371,268 votes withheld

**Proposal 2 – Approval of the 2007Incentive Compensation Plan-**

The 2007 Incentive Compensation Plan isintended to encourage ownership of shares of Corgenix by its employees,directors and consultants by providing an additional incentive to promote thesuccess of the business.  3,000,000shares of Corgenix common stock are reserved for issuance under this plan.

Approval:  4,278,228 votes for; 1,537,511 votes against;108,491 votes abstain; 3,338,628 not voted.

# **Proposal3 – Approval of the Second Amended and Restated Employee Stock Purchase Plan**

The Second Amended and Restated EmployeeStock Purchase Plan is intended to provide eligible employees of Corgenix withan opportunity to acquire an interest in the Company through theirparticipation in a plan designed to qualify as an employee stock purchase planunder Section 423 of the Internal Revenue Code of 1986.  400,000 shares of Corgenix common stock arereserved for issuance under this plan.

Approval:  4,345,660 votes for; 1,491,171 votes against;87,399 votes abstain; 3,338,628 not voted.

# **Proposal4 – Ratification of Hein & Associates**

To ratify the appointment of Hein & AssociatesLLP, as our independent public accountants for the fiscal year ending June 30,2007.

Approval:  5,889,111 votes for; 24,920 votes against;10,199 votes abstain; 3,338,628 not voted

**GLOSSARY**

*antibody* — a protein produced bythe body in response to contact with an antigen, and having the specificcapacity of neutralizing, hence creating immunity to, the antigen.

*anti-cardiolipin antibody (aCL)* —a class of antiphospholipid antibody which reacts with a negatively-chargedphospholipid called cardiolipin or a phospholipid-cofactor complex; frequentlyfound in patients with SLE and other

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autoimmunediseases; also reported to be significantly associated with the presence ofboth arterial and venous thrombosis, thrombocytopenia, and recurrent fetalloss.

*antigen* — an enzyme, toxin, orother substance, usually of high molecular weight, to which the body reacts byproducing antibodies.

*anti-phosphatidylserine antibodies (aPS)*— a class of antiphospholipid antibody which reacts to phosphatidylserine;similar to aCL; believed to be more specific for thrombosis.

*antiphospholipid antibodies* — afamily of autoantibodies with specificity against negatively chargedphospholipids, that are frequently associated with recurrent venous or arterialthrombosis, thrombocytopenia, or spontaneous fetal abortion in individuals withSLE or other autoimmune disease.

*antiphospholipid syndrome* — a clinicalcondition characterized by venous or arterial thrombosis, thrombocytopenia, orspontaneous fetal abortion, in association with elevated levels ofantiphospholipid antibodies and/or lupus anticoagulant.

*assay* — a laboratory test; toexamine or subject to analysis.

*autoantibody* — an antibody withspecific reactivity against a component substance of the body in which it isproduced; a disease marker.

*autoimmune diseases* — a group ofdiseases resulting from reaction of the immune system against self components.

*beta 2 glycoprotein I (ß2GPI)* — aserum protein (cofactor) that participates in the binding of antiphospholipidantibodies.

*coagulation* — the process bywhich blood clots.

*cofactor* — a serum protein thatparticipates in the binding of antiphospholipid antibodies, for example ß2GPI.

*delivery format —*theconfiguration of the product. Current Corgenix products utilize a 96-wellmicroplate system for its delivery format.

*hemostasis* — mechanisms in thebody to maintain the normal liquid state of blood; a balance between clottingand bleeding.

*hyaluronic acid (HA)* — apolysaccharide found in synovial fluid, serum and other body fluids andtissues, elevated in certain rheumatological and hepatic (liver) disorders.

*HDL cholesterol* — high densitylipoprotein associated with cholesterol.

*immunoassay* — a technique foranalyzing and measuring the concentration of disease markers using antibodies;for example, ELISA.

*immunoglobulin* — a globulinprotein that participates in the immune reaction as the antibody for a specificantigen.

*immunology* —  the branch of medicine dealing with (a)antigens and antibodies, esp. immunity to disease, and (b) hypersensitivebiological reactions (such as allergies), the rejection of foreign tissues,etc.

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*in vitro* — isolated from theliving organism and artificially maintained, as in a test tube.

*in vivo* — occurring within theliving organism.

*lipids* — a group of organiccompounds consisting of the fats and other substances of similar properties.

*platelets* — small cells in theblood which play an integral role in coagulation (blood clotting).

*platform technology* — the basictechnology in use for a majority of the Company’s products, in essence the “platform”for new products. In the case of Corgenix, the platform technology is ELISA(enzyme linked immunosorbent assay).

*phospholipids* —  a group of fatty compounds found in animaland plant cells which are complex triglyceride esters containing long chainfatty acids, phosphoric acid and nitrogenous bases.

*protein C* — normal blood proteinthat regulates hemostasis; decreased levels lead to thrombosis.

*protein S* — normal blood proteinthat regulates hemostasis; decreased levels lead to thrombosis.

*rheumatic diseases* —  a group of diseases of the connective tissue,of uncertain cause and including rheumatoid arthritis (RA), rheumatic fever,etc., usually characterized by inflammation, pain and swelling of the jointsand/or muscles.

*serum* —  the clear yellowish fluid which separatesfrom a blood clot after coagulation and centrifugation.

*systemic lupus erythematosus (SLE)*— a usually chronic disease of unknown cause, characterized by red, scalypatches on the skin that tend to produce scars, frequently affecting connectivetissue and involving the kidneys, spleen, etc.

*thrombin* — the enzyme of theblood, formed from prothrombin, that causes clotting by converting fibrinogento fibrin.

*thrombocytopenia* — a condition inwhich there is an abnormally small number of platelets in the circulatingblood.

*thromboembolism* — the obstructionor occlusion of a blood vessel by a thrombus.

*thrombosis*  — coagulation of the blood within a blood vessel of any organ, forming ablood clot.

*tumor markers* —- serum proteinsor molecules found in high concentrations in patients with selected cancers.

*vascular* — of or pertaining toblood vessels.

*von Willebrand’s Factor (vWF)* —normal blood protein that regulates hemostasis; decreased levels lead toabnormal bleeding and increased levels may produce thrombosis.

**PART II**

**Item 5.  Marketfor Common Equity and Related Stockholder Matters.**

Our common stock is traded on the OTC Bulletin Board®under the symbol “CONX.”  On August 27,2007, the closing price of our common stock on the OTC Bulletin Board ® asreported by the OTC Bulletin Board® was $0.33.

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The following table sets forth, for the periodsindicated, the high and low bid prices of our common stock as reported on theOTC Bulletin Board®.  The followingquotations reflect inter-dealer prices, without retail mark-up, markdown orcommissions, and may not represent actual transactions.
|                                 | ** ** | **Stock Price Ranges** | ** ** |
|---------------------------------|------------|----------------------------------|------------|
| **Stock Price Dates** | ** ** | **High**                         | ** ** | **Low** | ** ** |
|                            |       |                             |       |   |   |
| **Fiscal  Year 2007**           | ** ** | ** **                       | ** ** | ** ** | ** ** |
| Quarter Ended:                  |       |                             |       |   |   |
| September 30, 2006              |       | $                                | 0.43       |   | $ | 0.34 |   |
| December 31, 2006               |       | $                                | 0.38       |   | $ | 0.20 |   |
| March 31, 2007                  |       | $                                | 0.27       |   | $ | 0.21 |   |
| June 30, 2007                   |       | $                                | 0.29       |   | $ | 0.21 |   |
|                            |       |                             |       |   |   |
| **Fiscal  Year 2006**           | ** ** | ** **                       | ** ** | ** ** | ** ** |
| Quarter Ended:                  |       |                             |       |   |   |
| September 30, 2005              |       | $                                | 0.70       |   | $ | 0.32 |   |
| December 31, 2005               |       | $                                | 0.65       |   | $ | 0.36 |   |
| March 31, 2006                  |       | $                                | 0.49       |   | $ | 0.37 |   |
| June 30, 2006                   |       | $                                | 0.46       |   | $ | 0.32 |   |

 

OnJune 30, 2007, there were 171 holders of record of our Common Stock and oneholder of our Series A Preferred Stock.

Todate, we have not paid any dividends on our common stock, and the Board ofDirectors of the Company does not currently intend to declare cash dividends onour common stock.  While the Company’sSeries A Preferred Stock is outstanding, dividends may not be paid with respectto the common stock.  In addition to anyrestrictions imposed by the articles of incorporation with respect to thepayment of dividends, any future cash dividends would also depend on futureearnings, capital requirements and the Company’s financial condition and otherfactors deemed relevant by the Board of Directors.

**Stock Issuance**

On July 25, 2007, we entered into subscription andother agreements to complete a private placement with certain institutional andother accredited investors. The Company’s offering consisted of common stock inthe Company (the “Shares”) at the price of $0.25 per share. For each Sharepurchased, every investor received an equal number of common stock purchasewarrants (the “Warrants”). One-third of the Warrants issued to each investorare exercisable at $0.34 per share with a one-year term, one-third areexercisable at $0.375 per share with a two-year term, and the remaining thirdare exercisable at $0.40 per share with a five-year term.

The Shares and Warrants were offered and sold in reliance on exemptionsfrom registration pursuant to Section 4(2) of the Securities Act of 1933, andRule 506 of Regulation D thereunder. Each investor is an “accredited investor”as defined in Rule 501 of the same.

The sale of the Shares and Warrants also included a Registration RightsAgreement whereby the Company provides the purchasers with “piggy back”registration rights if we propose to register securities under the 1933 Act.

As of August 27,2007, we had sold $725,000 Shares and Warrants. The maximum offering is $860,000, with an overallotment, at ourdiscretion, of $129,000.

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Terra NovaFinancial, LLC, an Illinois limited liability company (“Terra Nova”), acted asa placement agent for the Company. Iliad Advisors, LLC, an Illinois limitedliability company (“Iliad Advisors”), provided advisory services to Terra Novaon the transaction.  As compensation forTerra Nova’s services, we are to pay Terra Nova a fee equal to 7% of theaggregate offering price, due to Terra Nova at each close of each stage of thetransaction.  To date, we have paid TerraNova $50,750. Terra Nova’s fee also includes warrants, due to Terra Nova at theclose of the transaction, to purchase shares of our common stock at theoffering price of $0.25 per share.  IfTerra Nova succeeds in each stage of  themaximum offering plus the over-allotment, totaling an aggregate of $989,000, itwill receive $69,230 in cash, and warrants to purchase 276,920 shares of commonstock at the exercise price of $0.25 per share.

TheDecember 28, 2005 convertible preferred financing agreements with BarronPartners, L.P. (“Barron”) stated that if our EBITDA for the audited fiscal yearended June 30, 2006, as calculated based upon the audited financialstatements filed with our Form 10-KSB filed with the Securities and ExchangeCommission, was less than $1,150,000, then we must issue to Barron such numberof additional shares of Series A preferred stock (“Preferred Stock”) equal to2,000,000 multiplied by the percentage by which EBITDA is less than $1,150,000,expressed as a positive number; provided that in no event will the number ofadditional shares of preferred stock issued due to this EBITDA adjustmentexceed 14% of the number of shares of Preferred Stock originally issued toBarron, or 280,000 shares of Preferred Stock. For example, if EBITDA was $920,000 (a 20% decline) then we would issueto Barron an additional 14% (i.e., 280,000) shares of Preferred Stock; providedthat at the time Barron continues to hold all 2,000,000 shares of PreferredStock originally issued on the closing. EBITDA is defined in the PreferredStock Purchase Agreement as net income of the Company, before interest, taxes,depreciation, amortization and one time charges, including, but not limited to,loss on the extinguishment of debt. EBITDA for the fiscal year endedJune 30, 2006 was $443,591 . Therefore, on October 4, 2006, we issued280,000 additional shares of Preferred Stock to Barron.

As mentioned above,on August 1, 2005 the Company and MBL executed an Amendment to the Common StockPurchase Agreement and Common Stock Purchase Warrant wherein one-half, or440,141, of the original redeemable shares were exchanged for a three-yearpromissory note payable with interest at prime plus two percent (7.75% as of June 30, 2007) with payments havingcommenced in September, 2005.  The sharesexchanged for the promissory note will be returned to the Company quarterly ona pro rata basis as payments are made on the promissory note.  As of June 30, 2007, we have redeemed a totalof****211,264 shares.

CorgenixPurchase of Equity Securities
| **Period**                           | ** ** | **(a)  Total number of  shares purchaased** | ** ** | **(b)  Average price paid  per share** | ** ** | **(c)  Total number of  shares purchased as  part of publicly  announced plans or  programs** | ** ** | **(d)  Maximum number of  shares that may yet  be purchased under  the plans or  programs** | ** ** |
|--------------------------------------|------------|------------------------------------------------------------|------------|-------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------|------------|
|                                 |       |                                                       |       |                                                  |       |                                                                                                                                  |       |                                                                                                                                     |       |
| September 2005  -November 2005       |       | 26,408                                                     |       | $                                                     | 0.568      |                                                                                                                                  | —     |                                                                                                                                     | —     |   |
|                                 |       |                                                       |       |                                                  |       |                                                                                                                                  |       |                                                                                                                                     |       |
| December 2005  -February 2006        |       | 26,408                                                     |       | $                                                     | 0.568      |                                                                                                                                  | —     |                                                                                                                                     | —     |   |
|                                 |       |                                                       |       |                                                  |       |                                                                                                                                  |       |                                                                                                                                     |       |
| March 2006 - May  2006               |       | 26,408                                                     |       | $                                                     | 0.568      |                                                                                                                                  | —     |                                                                                                                                     | —     |   |
|                                 |       |                                                       |       |                                                  |       |                                                                                                                                  |       |                                                                                                                                     |       |
| June 2006 –  August 2006        |       | 26,408                                                     |       | $                                                     | 0.568      |                                                                                                                                  | —     |                                                                                                                                     | —     |   |
|                                 |       |                                                       |       |                                                  |       |                                                                                                                                  |       |                                                                                                                                     |       |
| September 2006 –  November 2006 |       | 52,816                                                     |       | $                                                     | 0.568      |                                                                                                                                  | —     |                                                                                                                                     | —     |   |
|                                 |       |                                                       |       |                                                  |       |                                                                                                                                  |       |                                                                                                                                     |       |
| December 2006 –  June 2007      |       | 52,816                                                     |       | $                                                     | 0.568      |                                                                                                                                  | —     |                                                                                                                                     | —     |   |
|                                 |       |                                                       |       |                                                  |       |                                                                                                                                  |       |                                                                                                                                     |       |
| Total                                |       | 211,264                                                    |       | $                                                     | 0.568      |                                                                                                                                  | —     |                                                                                                                                     | 229,777    |   |

 

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**Forward-Looking Statements**

ThisForm 10-KSB includes statements that are not purely historical and are “forward-lookingstatements” within the meaning of Section 21E of the Securities Act of 1934, asamended, including statements regarding our expectations, beliefs, intentionsor strategies regarding the future.  Allstatements other than historical fact contained in this Form 10-KSB, including,without limitation, statements regarding future product developments,acquisition strategies, strategic partnership expectations, technologicaldevelopments, the availability of necessary components, research anddevelopment programs and distribution plans, are forward-looking statements.  All forward-looking statements included inthis Form 10-KSB are based on information available to us on the date hereof,and we assume no obligation to update such forward-looking statements.  Although we believe that the assumptions andexpectations reflected in such forward-looking statements are reasonable, wecan give no assurance that such expectations will prove to have been correct orthat we will take any actions that may presently be planned.

**Item 6.  Management’sDiscussion and Analysis or Plan of Operation.**

The following discussionshould be read in conjunction with the financial statements and accompanyingnotes included elsewhere herein.

**General**

Since our inception, we have been primarily involvedin the research, development, manufacturing and marketing/distribution ofdiagnostic tests for sale to clinical laboratories.  We currently market 52 products coveringautoimmune disorders, vascular diseases and liver disease.  Our products are sold in the U.S., the UK andother countries through our marketing and sales organization that includesemployee and contract sales representatives, internationally through anextensive distributor network, and to several significant OEM partners.

We manufacture products for inventory based uponexpected sales demand, usually shipping products to customers within 24 hoursof receipt of orders if in stock. Accordingly, we do not operate with a customer order backlog.

Except for the fiscal year ending June 30, 1997, wehave experienced revenue growth every year since our inception, primarily fromsales of products and contract revenues from strategic partners.  Contract revenues consist of service feesfrom research and development agreements with strategic partners.

Beginning in fiscal year1996, we began adding third-party OM licensed products to our diagnosticproduct line.  We expect to expand ourrelationships with other companies in the future to gain access to additionalproducts.  This category comprisesapproximately 30-40 products, with an annual growth rate in excess of 10%annually.  All of the third-party OMlicensed products support our own manufactured products, adding to ourcompetitive capabilities, especially in many international markets.

Although we have experienced growth in revenues everyyear since 1990, except for 1997, there can be no assurance that, in thefuture, we will sustain revenue growth, current revenue levels, or achieve ormaintain profitability.  Our results ofoperations may fluctuate significantly from period-to-period as the result of severalfactors, including: (i) whether and when new products are successfullydeveloped and introduced, (ii) market acceptance of current or new products,(iii) seasonal customer demand, (iv) whether and when we receive research anddevelopment payments from strategic partners, (v) changes in reimbursementpolicies for the products that we sell, (vi) competitive pressures on averageselling prices for the products that we sell, and (vii) changes in the mix ofproducts that we sell.

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**Recently Issued AccountingPronouncements**

*FAS 155 Disclosure, “Accounting for Certain Hybrid FinancialInstruments.” *In February 2006, the FASB issued  Statement of Financial Accounting Standards No. 155, Accounting for Certain Hybrid FinancialInstruments (“SFAS 155”).  SFAS 155amends FASB Statements No. 133, Accounting for Derivative Instruments andHedging Activities (“Statement 133”), and No. 140, Accounting for Transfers andServicing Financial Assets and Extinguishments of Liabilities (“Statement 140”).  SFAS 155 resolves issues addressed inStatement 133 Implementation Issue No. D1, “Application of Statement 133 toBeneficial Interests in Securitized Financial Assets.”  SFAS 155 permits fair value remeasurement forany hybrid financial instrument that contains an embedded derivative thatotherwise would require bifurcation, clarifies which interest-only strips andprincipal-only strips are not subject to the requirements of Statement 133, andestablishes a requirement to evaluate interests in securitized financial assetsto identify interests that are freestanding derivatives or that are hybridfinancial instruments that contain an embedded derivative requiringbifurcation. It also clarifies that concentrations of credit risk in the formof subordination are not embedded derivatives and amends Statement 140 toelimininate the prohibition on a qualifying special-purpose entity from holdinga derivative financial instruments that pertains to a beneficial interest otherthan another derivative financial instrument. SFAS 155 is effective for allfinancial instruments acquired or issued after the beginning of an entity’sfirst fiscal year that begins after September 15, 2006.  We have not yet determined the impact of theadoption of SFAS 155 on our financial statements, if any.

*SFAS No. 156Disclosure*, *“Accounting for Servicingof Financial Assets-An Amendment to FASB Statement No. 140*”.In March 2006, the FASB issued Statement of Financial Accounting Standards  No. 156,Accounting for Servicing of Financial Assets-an amendment to FASB StatementNo. 140 (“SFAS 156”).  SFAS 156requires that all separately recognized servicing rights be initially measuredat fair value, if practicable.  Inaddition, SFAS 156 permits an entity to choose between two measurement methods(amortization method or fair value measurement method) for each class ofseparately recognized servicing assets and liabilities.  SFAS 156 is effective for the Company as ofJanuary 1, 2007 . We do not believe that the adoption of SFAS 156will have a material impact on our consolidated financial statements.

*FASBInterpretation No. 48 Disclosure*, *Accounting for Uncertainty in Income Taxes-an Interpretation of FASBStatement No. 109*.” In July 2006, the FASB issued Financial Interpretation No. 48,Accounting for Uncertainty in Income Taxes-an interpretation of FASB StatementNo. 109 (“FIN 48”).  FIN 48clarifies the application of SFAS 109 by defining a criterion that anindividual tax position must meet for any part of the benefit of that positionto be recognized in an enterprise’s financial statements and also providesguidance on measurement, de-recognition, classification, interest andpenalties, accounting in interim periods and disclosure.  FIN 48 is effective for the Company as ofJuly 1, 2007 . At this time, we have not completed our review andassessment of the impact of adoption of FIN 48.

*FAS 157,Fair Value Measurements.  *In September, 2006, the FASB issuedStatement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS157”).  SFAS 157 defines fair value,establishes a framework and gives guidance regarding the methods used formeasuring fair value, and expands disclosures about fair valuemeasurements.  SFAS 157 is effective forfinancial statements issued for fiscal years beginning after November 15, 2007,and interim periods within those fiscal years. We are currently assessing the impact that SFAS 157 will have onour results of operations and financial position.

*SFAS 158,Employers’ Accounting for Defined Benefit Pension and Other PostretirementPlans.** *In September 2006, the FASB issuedStatement of Financial Accounting Standards No. 158, Employers’ Accountingfor Defined Benefit Pension and Other Postretirement Plans (“SFAS 158”).  SFAS 158 requires employers to fullyrecognize the obligations associated with single-employer defined benefitpension, retiree healthcare and other postretirement plans in their financialstatements.  The provisions of SFAS 158are effective as of the end of the fiscal year ending June 30, 2007.  We do not believe that the adoption ofSFAS 158 will have a material impact on our consolidated financialstatements.

*SAB108,  Considering the Effects of PriorYear Misstatements when Quantifying Misstatements in Current Year FinancialStatements.* InSeptember 2006, the SEC staff issued Staff Accounting Bulletin No. 108,Considering the Effects

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of Prior Year Misstatements when QuantifyingMisstatements in Current Year Financial Statements (“SAB 108”).  SAB 108 requires public companies to quantifyerrors using both a balance sheet and income statement approach and evaluatewhether either approach results in quantifying a misstatement as material, whenall relevant quantitative and qualitative factors are considered.  The guidance in SAB 108 is effective for thefiscal year ending June 30, 2007. We do not believe that the adoption of SAB 108 will have a materialimpact.

*SFAS 159,“The Fair Value Option for Financial Assets and Financial Liabilities —Including an Amendment of FASB Statement No. 115.” *In November 2007, the FASB issuedStatement of Financial Accounting Standards No. 159, The Fair Value Optionfor Financial Assets and Financial Liabilities — Including an Amendment of FASBStatement No. 115 (“SFAS 159”).* *SFAS 159 is effective for fiscalyears beginning after November 15, 2007. SFAS 159 permits an entity to chooseto measure many financial instruments and certain other items at fair value atspecified election dates.  Subsequentunrealized gains and losses on items for which the fair value option has beenelected will be reported in earnings.  Wedo not believe that the adoption of SFAS 159 will have a material impact on ourconsolidated financial statements.

# **Critical Accounting Policies**

Our consolidatedfinancial statements are prepared in accordance with accounting principlesgenerally accepted in the U.S. (“GAAP”) and our significant accounting policiesare summarized in Note 1 to the accompanying consolidated financialstatements.  The preparation of financialstatements in conformity with GAAP requires management to make estimates andassumptions that affect reported amounts of assets, liabilities, disclosure ofcontingent assets and liabilities at the date of the financial statements andreported amounts of revenues and expenses during the reporting period.  Actual results could differ significantlyfrom those estimates.

We maintain an allowancefor doubtful accounts based on its historical experience and provide for anyspecific collection issues that are identified. Such allowances have historically been adequate to provide for ourdoubtful accounts but involve a significant degree of management judgment andestimation.  Worse than expected futureeconomic conditions, unknown customer credit problems and other factors mayrequire additional allowances for doubtful accounts to be provided for infuture periods.  Equipment and softwareare recorded at cost.  Equipment undercapital leases is recorded initially at the present value of the minimum leasepayments.  Depreciation and amortizationis calculated primarily using the straight-line method over the estimateduseful lives of the respective assets which range from 3 to 7 years.  The internal and external costs of developingand enhancing software costs related to website development, other than initialdesign and other costs incurred during the preliminary project stage, arecapitalized until the software has been completed.  Such capitalized amounts began to beamortized commencing when the website was placed in service on a straight-linebasis over a three-year period.  Whenassets are sold, retired or otherwise disposed of, the cost and relatedaccumulated depreciation are eliminated from the accounts and a gain or loss isrecognized.  Repair and maintenance costsare expensed as incurred.  We evaluate therealizability of our long-lived assets, including property and equipment,whenever events or changes in circumstances indicate that the carrying amountof an asset may not be recoverable. Revenue from sale of products is recognized upon shipment of products.  Revenue from research and developmentcontracts represents amounts earned pursuant to agreements to perform researchand development activities for third parties and is recognized as earned underthe respective agreement.  Becauseresearch and development services are provided evenly over the contract period,revenue is recognized ratably over the contract period.  Research and development agreements in effectin 2005 and 2003 provided for fees to us based on time and materials inexchange for performing specified research and development functions.  Research and development and advertisingcosts are expensed when incurred. Inventories are recorded at the lower of costor market, using the first-in, first-out method.

# **Results of Operations**

*Year Ended June 30, 2007****comparedto 2006*

*Net sales. *Netsales for the fiscal year ended June 30, 2007 were $7,367,933, an 11.1%increase from $6,635,779 for fiscal 2006. Total North American sales increased $498,046 or 10.1% to $5,445,545while total sales to international

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distributorsincreased $234,108 or 13.9% to $1,922,388 from year to year.  With respect to our major revenue categoriesand product lines, North American direct product-only sales increased $117,7050or 3.0% to $3,899,147 whereas international direct product-only sales increased$234,661 or 17.9% to $1,545,235. Worldwide category results were as follows: Phospholipids kit salesincreased $223,377 or 7.1% to $3,377,495 for the period, Coagulation kit salesdecreased $71,091 or 4.3% to $1,663,529. HA kit sales increased $103,861 or 11.7% to $990,097, and Autoimmune kitsales decreased $5,780 or 4.3% to $129,494. Additionally, worldwide OEM/contract manufacturing revenues increased$368,030, or 39.1% to $1,310,306. Overall, worldwide non-product revenueincreased $150,772, or 40.2% to $52,763. Sales of products manufactured for usby other companies while still relatively small, are expected to continue toincrease during fiscal 2008.

*Cost of sales*. Cost of sales, asa percentage of sales, increased to 38.4% for the fiscal year ended June 30,2007, from 37.1% in 2006 primarily due to product mix reduction from highergross margin products in addition to higher direct labor and material costs andespecially overhead costs due to the new facility.

*Selling and marketing. *For the fiscal year endedJune 30, 2007, selling and marketing expenses increased 27.0% to $2,065,573from $1,626,165 in 2006.  The increasewas due to increases in consulting fees and outside services, labor-relatedexpenses, business promotion expenditures, rent and office supplies.

*Research and development.*  Research and development expenses increased41.6% to $812,531 for the fiscal year ended June 30, 2007, from $574,021 in2006.  This increase was primarily due toincreases in labor-related costs and facility-related expenses.

*General and administrative.*  or the fiscal year ended June 30, 2007,general and administrative expenses increased $880,621 or 53.7% to $2,519,916from $1,638,575 in 2006.  This increasewas primarily attributable to increases in labor-related expenses, abortedlicensing costs, terminated merger-related expenses, bad debt expense, bankcharges, consulting and outside services, sales and use taxes, facilitysupplies (e.g., office supplies and kitchen supplies), and legal expense.

*Net interest expense.*  Interest expense decreased $258,985 or 13.6%to $1,646,649 for the fiscal year ended June 30, 2007, from $1,905,634 in 2006due primarily to a full twelve months worth of amortization of deferred financing costs and discount on the notespayable in the current fiscal year as a result of the second traunch ofthe  private debt placement completed inDecember, 2005.

**Liquidity and Capital Resources**

Cash used by operating activities was $895,351 for the2007 fiscal year compared to $994,540 for the 2006 fiscal year.  The cash used by operations resultedprimarily from the substantially increased net loss in addition to a largeincrease in inventories (principally as a result of substantially increasedlabor and overhead allocations), plus an increase in prepaid expenses and otherassets, partially offset by an increase in accounts payable, accrued interestand other liabilities plus a decrease in accounts receivable.

Net cash used by investing activities, was $256,004 inthe 2007 fiscal year compared to $93,166 for the 2006 fiscal year.  The increase, as a result of the purchase ofnew laboratory equipment, flooring, refrigeration equipment, furniture andfixtures and computer equipment, was mainly brought about by the July 2006 moveto a new and larger facility.  Thesepurchases were partially offset by the proceeds from the disposal of equipment.

Net cash used by financing activities amounted to$657,236 for the 2007 fiscal year compared to cash provided by financing activitiesof $2,923,324 in the 2006 fiscal year. This large difference in cash used by financing activities in fiscal2007versus the large amount provided in fiscal 2006 was primarily due toincreased payments on notes payable in fiscal 2006 as a result of the December2005 convertible debt financing in addition to payments on capital leaseobligations.

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We have incurred operating losses and negative cashflow from operations for most of our history. Losses incurred since our inception have aggregated $9,528,129, andthere can be no assurance that we will be able to generate positive cash flowsto fund our operations in the future or to pursue our strategicobjectives.  Historically, we havefinanced our operations primarily through long-term debt and the sales ofcommon, redeemable common, and preferred stock. We have also financed operations through sales of diagnostic productsand agreements with strategic partners. Accounts receivable decreased 10.9% to $1,225,677 in fiscal year 2007,from $1,362,768 in fiscal year 2006 as of June 30, 2007 primarily as a resultof accelerated collection procedures.

Wehave developed and are continuing to strive to implement an operating planintended to eventually achieve sustainable profitability and positive cash flowfrom operations.  Key components of thisplan include accelerating revenue growth and the cash to be derived fromexisting product lines as well as new diagnostic products, expansion of ourstrategic alliances with other biotechnology and diagnostic companies,improving operating efficiencies to reduce cost of sales, thereby improvinggross margins, and lowering overall operating expenses.  Management has been successful in increasingrevenues in the current fiscal year ended June 30, 2007 by $732,154 or 11.0%,and is forecasting continued revenue growth for the fiscal year ended June 30,2008.  However, management has not yetachieved the necessary level of operating efficiencies to lower our cost ofsales and operating expenses, and consequently, we have scaled backexpenditures, periodically delayed payments on accounts payable, and, inNovember 2006, entered into a twelve month principal deferral agreement withour convertible debt holders in order to maintain financial liquidity. Thereare significant risks associated with the operating plan and we might be forcedto further modify the plan if circumstances change, in order to achieve thegoals of sustained profitability and positive cash flow from operations.

Althoughthe operating plan is intended to achieve sustainable profitability andpositive cash flow from operations, it is possible that we may not besuccessful in our efforts.  Even with ouroperating plan, we expect to continue incurring operating losses for the firstthree to six months of fiscal 2008, as it will take time for our strategic andoperating initiatives to have a positive effect on our business operations andcash flow.  In view of this, in July2007, we reported that we have entered into subscription and other agreementsto complete a private placement with certain institutional and other accreditedinvestors.  As of August 31, we  sold $725,000 in Shares and Warrants  in this offering.  See *Recent Developments.*

Shouldany other significant negative events occur, our financial liquidity positionwill likely be negatively impacted by our not achieving positive cash flow fromoperations. Given all of these circumstances, as noted above, we have securedadditional equity financing. It is also possible that we may also experiencefuture defaults under the agreements with our convertible debt holders and/orredeemable common shareholder, in which case they would be entitled toaccelerate the amounts payable to them. In order to help satisfy our working capital requirements, we haveraised additional funds through the sale of equity securities.  In addition, if we are not able to achievethe anticipated sales increases, we may need to enter into collaborativeagreements with third parties or evaluate the possible divestiture of productlines.  In addition, we may be requiredto reduce our sales and marketing activities, reduce the scope of or eliminateour research and development programs, or relinquish rights to technologies orproducts that we might otherwise seek to develop or commercialize.  Management believes that we will haveadequate resources to continue operations for longer than 12 months.

**Off -Balance Sheet Arrangements**

We do not have any off-balance sheet arrangements.

**Contractual Obligations and Commitments**

OnFebruary 8, 2006, we entered into a Lease Agreement (the “Lease”) with YorkCounty, LLC, a California limited liability company (“Landlord”) pursuant towhich we leased approximately 32,000 rentable square feet (the “Property”) ofLandlord’s approximately 102,400 square foot building, commonly known asBroomfield One and located at 11575 Main Street, Broomfield, Colorado80020.  The Property is part of Landlord’smulti-tenant real property development known as the Broomfield CorporateCenter.  We use the Property for our headquarters,laboratory research and development facilities and production facilities.

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Onthe following dates, we executed the following amendments to the Lease:

·                 December 1,2006- The First Amendment to the Lease Agreement (the “First Amendment”)established July 6, 2006 as the date of the commencement of the Lease

·                 June 19,2007- The Second Amendment to the Lease Agreement (the “Second Amendment”)redefined the amount of available rental space from 32,480 to 32,000 squarefeet and recalculated the lease rates per square foot, and

·                 July 19,2007- The Third Amendment to the Lease Agreement (the “Third Amendment”)established the base rent matrix for the period 11/28/2013 to 12/05/2013 whichwas inadvertently omitted in the Second Amendment.

Theterm of the Lease (the “Term”) is seven years and five months and commenced onJuly 6, 2006 with tenant options to extend the Term for up to two five-yearperiods.  We have a one time right offirst refusal to lease contiguous premises.

Initiallythere was no base lease rate payable on 25,600 square feet of the Property ,plus estimated operating expenses of $1.61 per square foot.

Thebase lease rate payable on 25,600 square feet of the Property increased to$4.00 per square foot on January 28, 2007, plus amortization of tenantimprovements of $5.24 per square foot, plus estimated operating expenses of$1.61 per square foot.  The base leaserate on 25,600 square feet of the Property increases to $5.64 per square footon January 28, 2008, with fixed annual increases each January 28 thereafterduring the initial Term, plus the amortization of tenant improvements of $5.24per square foot, and estimated operating expenses of $1.61 per square foot.

Initially,there was no base lease rate payable on 6,400 square feet of the Property, plusestimated operating expenses of $1.61 per square foot.  The base lease rate on 6,400 square feet ofthe Property increases to $3.00 per square foot commencing on August 28, 2007,and increases to $3.09 on January 28, 2008, with fixed annual increases eachJanuary 28 thereafter during the initial Term, plus estimated operatingexpenses of $1.61 per square foot.

Thus,the estimated total rent (this is dependent upon the actual operating expenses)on the entire 32,000square feet of the Property is initially $1.61 per squarefoot, then increased to approximately $9.00 per square foot on January 28,2007, then increased to approximately $9.60 per square foot on August 28 2007,then increases to approximately $10.93 per square foot on January 28, 2008,with annual increases in the base lease rate each January 28 thereafter duringthe initial Term, up to an estimated total rent of $13.18 per square footduring the final year of the initial Term.

Thebase lease rate for an extension period is 100% of the then prevailing marketrental rate (but in no event less than the rent for the last month of the thencurrent Term) and shall thereafter increase annually by 3% for the remainder ofthe applicable extension period.

Wehave not invested in any real estate or real estate mortgages.

**Risk Factors**

An investment in Corgenix entails certain risks thatshould be carefully considered. In addition, these risk factors could causeactual results to differ materially from those expected including thefollowing:

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**We depend upon collaborativerelationships and third parties for product development and commercialization.**

We have historically entered into research anddevelopment agreements with collaborative partners, from which we derivedrevenues in past years.  Pursuant tothese agreements, our collaborative partners have specific responsibilities forthe costs of development, promotion, regulatory approval and/or sale of ourproducts.  We will continue to rely onfuture collaborative partners for the development of products andtechnologies.  There can be no assurancethat we will be able to negotiate such collaborative arrangements on acceptableterms, if at all, or that current or future collaborative arrangements will besuccessful.  To the extent that we arenot able to establish such arrangements, we could  be forced to undertake such activitiesentirely at our own expense.  The amountand timing of resources that any of these partners devotes to these activitiesmay be based on progress by us in our product development efforts.  Collaborative arrangements may be terminatedby the partner upon prior notice without cause and there can be no assurancethat any of these partners will perform its contractual obligations or that itwill not terminate its agreement.  Withrespect to any products manufactured by third parties, there can be noassurance that any third-party manufacturer will perform acceptably  or that failures by third parties will notdelay clinical trials or the submission of products for regulatory approval orimpair our ability to deliver products on a timely basis.

**There can be no assurance of successful or timelydevelopment of additional products.**

Our business strategy includes the development ofadditional diagnostic products for the diagnostic business.  Our success in developing new products willdepend on our ability to achieve scientific and technological advances and totranslate these advances into commercially competitive products on a timelybasis.  Development of new productsrequires significant research, development and testing efforts.  We have limited resources to devote to thedevelopment of products and, consequently, a delay in the development of oneproduct or the use of resources for product development efforts that proveunsuccessful may delay or jeopardize the development of other products.  Any delay in the development, introductionand marketing of future products could result in such products being marketedat a time when their cost and performance characteristics would not enable themto compete effectively in their respective markets.  If we are unable, for technological or otherreasons, to complete the development and introduction of any new product or ifany new product is not approved or cleared for marketing or does not achieve asignificant level of market acceptance, our ability to remain competitive inour product niches would be impaired.

**We continue to incur losses andrequire additional financing.**

We have incurred operating losses and negative cashflow from operations for most of our history. Losses incurred since ourinception have aggregated $9,528,129, and there can be no assurance that wewill be able to generate positive cash flows to fund our operations in thefuture or to pursue our strategic objectives. Historically, we have financed our operations primarily throughlong-term debt and the sales of common, redeemable common, and preferredstock.  We have also financed operationsthrough sales of diagnostic products and agreements with strategicpartners.  Accounts receivable decreased10.9% to $1,225,677, from $1,362,768 as of June 30, 2007 primarily as a resultof accelerated collection procedures.

Wehave developed and are continuing to strive to implement an operating planintended to eventually achieve sustainable profitability and positive cash flowfrom operations.  Key components of thisplan include accelerating revenue growth and the cash to be derived  from existing product lines as well as newdiagnostic products, expansion of our strategic alliances with otherbiotechnology and diagnostic companies, improving operating efficiencies toreduce cost of sales, thereby improving gross margins, and lowering overalloperating expenses.  Management has beensuccessful in increasing revenues in the current fiscal year ended June 30,2007 by $732,154 or 11.0%., and is forecasting continued revenue growth for thefiscal year ended June 30, 2008. However, management has not yet achieved thenecessary level of operating efficiencies to lower our cost of sales and operatingexpenses, and consequently, we have scaled back expenditures, periodicallydelayed payments on accounts payable, and, in November of 2006, entered into atwelve month principal deferral agreement with our convertible debt holders inorder to maintain financial liquidity. This deferral was previously

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reported infilings to the SEC.  There aresignificant risks associated with the operating plan and we might be forced tofurther modify the plan if circumstances change, in order to achieve the goalsof sustained profitability and positive cash flow from operations.

Althoughthe operating plan is intended to achieve sustainable profitability andpositive cash flow from operations, it is possible that we may not besuccessful in our efforts.  Even with ouroperating plan, we expect to continue incurring operating losses for the firstthree to six months of fiscal 2008, as it will take time for our strategic andoperating initiatives to have a positive effect on our business operations andcash flow.  In view of this, in July2007, we reported that we have entered into subscription and other agreementsto complete a private placement with certain institutional and other accreditedinvestors.  As of August 31, 2007, we  sold $725,000 in Shares and Warrants in thisoffering.  See *RecentDevelopments.*

Shouldany other significant negative events occur, our financial liquidity positionwill likely be negatively impacted by our not achieving positive cash flow fromoperations.  Given all of thesecircumstances, as noted above, we have secured additional equityfinancing.  It is also possible that wemay also experience future defaults under the agreements with our convertibledebt holders and/or redeemable common shareholder, in which case they would beentitled to accelerate the amounts payable to them.  In order to help satisfy our working capitalrequirements we have raised additional funds through the sale of equitysecurities.  In addition, if we are notable to achieve the hoped-for sales increases, we may need to enter intocollaborative agreements with third parties or evaluate the possibledivestiture of product lines.  Inaddition, we may be required to reduce our sales and marketing activities,reduce the scope of or eliminate our research and development programs, orrelinquish rights to technologies or products that we might otherwise seek todevelop or commercialize.  Managementbelieves that we will have adequate resources to continue operations for longerthan 12 months.

**Competition in the human medicaldiagnostics industry is, and is expected to remain, significant.**

Our competitors range from development stagediagnostics companies to major domestic and international pharmaceutical andbiotechnology companies.  Many of thesecompanies have financial, technical, marketing, sales, manufacturing,distribution and other resources significantly greater than ours.  In addition, many of these companies havename recognition, established positions in the market and long standingrelationships with customers and distributors also greater than ours.  Moreover, the diagnostics industry continuesto demonstrate a degree consolidation, whereby some of the large domestic andinternational pharmaceutical companies have been acquiring mid-sizeddiagnostics companies, further increasing the concentration of resources.  There can be no assurance that technologieswill not be introduced that could be directly competitive with or superior toour technologies.

**Our products and activities aresubject to regulation by various governments and government agencies.**

The testing, manufactureand sale of our products is subject to regulation by numerous governmentalauthorities, principally the FDA and certain foreign regulatory agencies.  Pursuant to the Federal Food, Drug, and CosmeticAct, and the regulations promulgated there under, the FDA regulates thepreclinical and clinical testing, manufacture, labeling, distribution andpromotion of medical devices.  We arelimited in our ability to commence marketing or commercial sales in the U.S. ofnew products under development until we receive clearance or approval from theFDA.  The testing for, preparation of andsubsequent FDA regulatory review of required filings can be a lengthy,expensive and uncertain process. Noncompliance with applicable requirements can result in, among otherconsequences, fines, injunctions, civil penalties, recall or seizure ofproducts, repair, replacement or refund of the cost of products, total orpartial suspension of production, failure of the government to grant pre-marketclearance or pre-market approval for devices, withdrawal of marketingclearances or approvals, and criminal prosecution.

There can be no assurance that we will be able toobtain necessary regulatory approvals or clearances for our products on atimely basis, if at all, and delays in receipt of or failure to receive suchapprovals or clearances, the loss of previously received approvals orclearances, limitations on intended use imposed as a condition of suchapprovals or clearances or failure to comply with existing or future regulatoryrequirements could negatively impact our sales and thus have a material adverseeffect on our business.

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As a manufacturer of medical devices for marketing inthe U.S., we are required to adhere to applicable regulations setting forthdetailed good manufacturing practice requirements, which include testing,control and documentation requirements. We must also comply with Medical Device Report (MDR) requirements, whichrequire that a manufacturer reports to the FDA any incident in which itsproduct may have caused or contributed to a death or serious injury, or inwhich its product malfunctioned and, if the malfunction were to recur, it wouldbe likely to cause or contribute to a death or serious injury.  We are also subject to routine inspection bythe FDA for compliance with QSR requirements, MDR requirements and otherapplicable regulations.  Labeling andpromotional activities are subject to scrutiny by the FDA and, in certaincircumstances, by the Federal Trade Commission. We may incur significant costs to comply with laws and regulations inthe future, which would decrease our net income or increase our net loss andthus have a potentially material adverse effect upon our business, financialconditions and results of operations.

Distribution of diagnostic products outside the U.S.is subject to extensive foreign government regulation.  These regulations, including the requirementsfor approvals or clearance to market, the time required for regulatory reviewand the sanctions imposed for violations, vary from country to country.  We may be required to incur significant costsin obtaining or maintaining foreign regulatory approvals.  In addition, the export of certain of ourproducts that have not yet been cleared for U.S. commercial distribution may besubject to FDA export restrictions. Failure to obtain necessary regulatory approval or the failure to complywith regulatory requirements could reduce our product sales and thus have apotentially material adverse effect on our business, financial condition andresults of operations.

**We depend upon distribution partners for sales ofdiagnostic products in international markets.**

We have entered into distribution agreements withcollaborative partners in which we have granted distribution rights for certainof our products to these partners within specific international geographicareas.  Pursuant to these agreements, ourcollaborative partners have certain responsibilities for market development,promotion, and sales of the products.  Ifany of these partners fail to perform its contractual obligations or terminateits agreement, this could have the effect of reduce our sales and cash flow andthus have a potentially material adverse effect on our business, financialcondition and results of operations.

**Third party reimbursement forpurchases of our diagnostic products is uncertain.**

In the U.S., health care providers that purchasediagnostic products, such as hospitals and physicians, generally rely on thirdparty payers, principally private health insurance plans, federal Medicare andstate Medicaid, to reimburse all or part of the cost of the purchase.  Third party payers are increasinglyscrutinizing and challenging the prices charged for medical products and servicesand they can affect the pricing or the relative attractiveness of theproduct.  Decreases in reimbursementamounts for tests performed using our diagnostic products, failure byphysicians and other users to obtain reimbursement from third party payers, orchanges in government and private third party payers’ policies regardingreimbursement of tests utilizing diagnostic products, may affect our ability tosell our diagnostic products profitably. Market acceptance of our products in international markets is alsodependent, in part, upon the availability of reimbursement within prevailinghealth care payment systems.

**Our success depends, in part, onour ability to obtain patents and license patent rights, to maintain tradesecret protection and to operate without infringing on the proprietary rightsof others.**

Most of our products are based on our patented andproprietary application of Enzyme Linked ImmunoSorbent Assay, or ELISA,technology, a clinical testing methodology commonly used worldwide.  Most of our current products are based onthis platform technology in a delivery format convenient for clinical testinglaboratories.  The delivery format, whichis referred to as “Microplate,” allows the testing of up to 96 samples perplate, and is one of the most commonly used formats, employing conventionaltesting equipment found in virtually all clinical laboratories.  The availability and broad acceptance ofELISA Microplate products reduces entry barriers worldwide for our new productsthat employ this technology and delivery format.  There can be no assurance that our issuedpatents will afford meaningful protection against a

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competitor,or that patents issued or licensed to us will not be infringed upon or designedaround by others, or that others will not obtain patents that we would need tolicense or design around.  We could incursubstantial costs in defending the Company or our licensees in litigationbrought by others.  The potential forreduced sales and increased legal expenses would have a negative impact on ourcash flow and thus our overall business could be adversely affected, or, in anextreme case, our ability to remain in business could be jeopardized.

**We may not be able tosuccessfully implement our plans to acquire other companies or technologies.**

Our growth strategy includes the acquisition ofcomplementary companies, products or technologies.  There is no assurance that we will be able toidentify appropriate companies or technologies to be acquired, to negotiatesatisfactory terms for such an acquisition, or to obtain sufficient capital tomake such acquisitions.  Moreover,because of limited cash resources, we will be unable to acquire any significantcompanies or technologies for cash and our ability to effect acquisitions inexchange for our capital stock may depend upon the market prices for our commonstock, which could result in significant dilution to its existingstockholders.  If we do complete one ormore acquisitions, a number of risks arise, such as disruption of our existingbusiness, short-term negative effects on our reported operating results,diversion of management’s attention, unanticipated problems or legalliabilities, and difficulties in the integration of potentially dissimilaroperations.  Any of these factors couldmaterially harm Corgenix’s business or its operating results.

**We depend on suppliers for ourproducts’ components.**

The components of our products include chemical,biological and packaging supplies that are generally available from severalsuppliers, except certain antibodies and other critical components, which wepurchase from single suppliers.  Wemitigate the risk of a loss of supply by maintaining a sufficient supply ofsuch antibodies to ensure an uninterrupted supply for at least threemonths.  We have also qualified secondvendors for all critical raw materials and believe that we can substitute a newsupplier with respect to any of these components in a timely manner.  If, for some reason, we lose our mainsupplier for a given material, there can be no assurances that we will be ableto substitute a new supplier in a timely manner and failure to do so couldimpair the manufacturing of certain of our products and thus have a materialadverse effect on our business, financial condition and results of operations.

**We have only limitedmanufacturing experience with certain products.**

Although we have manufactured over twelve milliondiagnostic tests based on our proprietary applications of ELISA (enzyme linkedimmuno-absorbent assay) technology, certain of our diagnostic products inconsideration for future development incorporate technologies with which wehave limited manufacturing experience. Assuming successful development and receipt of required regulatory approvals,significant work may be required to scale up production for each new productprior to such product’s commercialization. There can be no assurance that such work can be completed in a timelymanner and that such new products can be manufactured cost-effectively,to regulatory standards or in sufficient volume.

**Due to the specialized nature ofour business, our success will be highly dependent upon our ability to attractand retain qualified scientific and executive personnel.**

We believe our success will depend to a significantextent on the efforts and abilities of Dr. Luis R. Lopez and Douglass T.Simpson. Loss of either  would bedisruptive to our business.  There can beno assurance that we will be successful in attracting and retaining suchskilled personnel, who are generally in high demand by other companies.  The loss of, inability to attract, or poorperformance by key scientific and executive personnel may have a materialadverse effect on our business, financial condition and results of operations.

**The testing, manufacturing andmarketing of medical diagnostic devices entails an inherent risk of productliability claims.**

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To date, we have experienced no product liabilityclaims, but any such claims arising in the future could have a material adverseeffect on our business, financial condition and results of operations.Potential product liability claims may exceed the amount of our insurancecoverage or may be excluded from coverage under the terms of our policy orlimited by other claims under our umbrella insurance policy.  Additionally, there can be no assurance thatour existing insurance can be renewed by us at a cost and level of coveragecomparable to that presently in effect, if at all.  In the event that we are held liable for aclaim against which we are not insured or for damages exceeding the limits ofour insurance coverage, such claim could have a material adverse effect on ourcash flow and thus potentially a materially adverse effect on our business,financial condition and results of operations.

**There has, to date, been noactive public market for our Common Stock, and there can be no assurance thatan active public market will develop or be sustained.**

Although our Common Stock has been traded on the OTCBulletin Board® since February 1998, the trading has been sporadic withinsignificant volume.

Moreover, the over-the-counter markets forsecurities of very small companies historically have experienced extreme priceand volume fluctuations.  These broadmarket fluctuations and other factors, such as new product developments, trendsin our industry, the investment markets, economic conditions generally, andquarterly variation in our results of operations, may adversely affect themarket price of our common stock.  Inaddition, our common stock is subject to rules adopted by the Securities andExchange Commission regulating broker-dealer practices in connection withtransactions in “penny stocks.”  Suchrules require the delivery prior to any penny stock transaction of a disclosureschedule explaining the penny stock market and all associated risks and imposevarious sales practice requirements on broker-dealers who sell penny stocks topersons other than established customers and accredited investors.  For these types of transactions thebroker-dealer must make a special suitability determination for the purchaserand have received the purchaser’s written consent to the transaction prior tosale.  The additional burdens imposedupon broker-dealers by such requirements may discourage broker-dealers fromeffecting transactions in securities subject to the penny stock rules.

**There are risks associated with fluctuatingexchange rates.**

Our financial statementsare presented in U.S. dollars.  At theend of each fiscal quarter and the fiscal year, we convert the financialstatements of Corgenix UK, which operates in pounds sterling, into U.S.dollars, and consolidate them with results from Corgenix, Inc.  We may, from time to time, also need toexchange currency from income generated by Corgenix UK. Foreign exchange ratesare volatile and can change in an unknown and unpredictable fashion.  Should the foreign exchange rates change tolevels different than anticipated by us, our business, financial condition andresults of operations may be adversely affected.

**Item 7.  FinancialStatements.**

The financial statementslisted in the accompanying index to the consolidated financial statements arefiled as part of this Annual Report on Form 10-KSB.

**Item 8.  ChangesIn and Disagreements With Accountants on Accounting and Financial Disclosure.**

None.

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**Item 8A.  Controlsand Procedures.**

***Evaluation of disclosure controls and procedures***

Under the supervision and with the participation ofour management, including the Chief Executive Officer and Chief FinancialOfficer, carried out an evaluation of the effectiveness of the design andoperation of our disclosure controls and procedures (as defined in Rules240.13a-14c under the Securities Exchange Act of 1934 (the “Exchange Act”) asof the end of the period covered by this report (the “Evaluation Date”).  Based upon this evaluation, the ChiefExecutive Officer and Chief Financial Officer concluded that, as of theEvaluation Date, our disclosure controls and procedures were effective for thepurposes of recording, processing, summarizing and timely reporting informationrequired to be disclosed by us in the reports that we file under the SecuritiesExchange Act of 1934 and that such information is accumulated and communicatedto our management in order to allow timely decisions regarding required disclosure.

***Changes in internal controls***

There have been no significant changes in our internalcontrols over financial reporting or in other factors that materiially affectedor are reasonably likely to materially affect our internal controls andprocedures over financial reporting subsequent to the Evaluation Date, nor werethere any significant deficiencies or material weaknesses in our internalcontrols.

**Item 8B.  OtherInformation.**

None.

**PART III**

**Item 9.  Directorsand Executive Officers.**

***Directors and Executive Officers***

Thefollowing table sets forth certain information with respect to the directorsand executive officers of Corgenix as of June 30, 2007:
| **Name**               | ** ** | **Age** | ** ** | **Position**                                                                  | ** ** | **Director/Officer  Since** |
|------------------------|------------|---------|------------|-------------------------------------------------------------------------------|------------|-----------------------------|
|                   |       |    |       |                                                                          |       |                        |
| Luis R. Lopez          |       | 59      |       | Chief Medical Officer and  Chairman of the Board                              |       | 1998                        |
|                   |       |    |       |                                                                          |       |                        |
| Douglass T. Simpson    |       | 59      |       | President and Chief Executive  Officer, Director                              |       | 1998                        |
|                   |       |    |       |                                                                          |       |                        |
| Ann L. Steinbarger     |       | 54      |       | Senior Vice President  Operations                                             |       | 1998                        |
|                   |       |    |       |                                                                          |       |                        |
| Taryn G. Reynolds      |       | 48      |       | Vice President, Facilities and  IT                                            |       | 1998                        |
|                   |       |    |       |                                                                          |       |                        |
| William H. Critchfield |       | 61      |       | Senior Vice President Finance  and Administration and Chief Financial Officer |       | 2000                        |
|                   |       |    |       |                                                                          |       |                        |
| Robert Tutag           |       | 65      |       | Director                                                                      |       | 2006                        |
|                   |       |    |       |                                                                          |       |                        |
| Dennis Walcewski       |       | 59      |       | Director                                                                      |       | 2006                        |
|                   |       |    |       |                                                                          |       |                        |
| Charles H. Scoggin     |       | 62      |       | Director                                                                      |       | 2006                        |
|                   |       |    |       |                                                                          |       |                        |
| Larry G. Rau           |       | 61      |       | Director                                                                      |       | 2006                        |
|                   |       |    |       |                                                                          |       |                        |
| C. David Kikumoto      |       | 57      |       | Director                                                                      |       | 2006                        |

 

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LuisR. Lopez, M.D.,****has served as the Chief ExecutiveOfficer and Chairman of the Board of Directors of Corgenix from May 1998 untilApril 2006 when his title was changed to Chief Medical Officer.  From 1987 to 1990, Dr. Lopez was Vice Presidentof Clinical Affairs at BioStar Medical Products, Inc., a Boulder, Coloradodiagnostic firm.  From 1986 to 1987 heserved as Research Associate with the Rheumatology Division of the Universityof Colorado Health Sciences Center, Denver, Colorado.  From 1980 to 1986 he was Professor ofImmunology at Cayetano Heredia University School of Medicine in Lima, Peru,during which time he also maintained a medical practice with the Allergy andClinical Immunology group at Clinica Ricardo Palma in Lima.  From 1978 to 1980 Dr. Lopez held a fellowshipin Clinical Immunology at the University of Colorado Health SciencesCenter.  He received his M.D. degree in1974 from Cayetano Heredia University School of Medicine in Lima, Peru.  He is a clinical member of the AmericanCollege of Rheumatology, and a corresponding member of the American Academy ofAllergy, Asthma and Immunology.  Dr.Lopez is licensed to practice medicine in Colorado, and is widely published inthe areas of immunology and autoimmune disease.

DouglassT. Simpson has been the President of Corgenix since May 1998 and was elected adirector in May 1998.  Mr. Simpson joinedCorgenix’s operating subsidiary as Vice President of Business Development in1992, was promoted to Vice President, General Manager in 1995, to ExecutiveVice President in 1996, to President in February 1998 and then to ChiefExecutive Officer in April 2006.  Priorto joining Corgenix’s operating subsidiary, he was a Managing Partner atVenture Marketing Group in Austin, Texas, a health care and biotechnologymarketing firm, and in that capacity, served as a consultant to REAADS from1990 until 1992.  From 1984 to 1990 Mr.Simpson was employed by Kallestad Diagnostics, Inc. (now part of BioRadLaboratories, Inc.), one of the largest diagnostic companies in the world,where he served as Vice President of Marketing, in charge of all marketing andbusiness development.  Mr. Simpson holdsB.S. and M.S. degrees in Biology and Chemistry from Lamar University inBeaumont, Texas.

WilliamH. Critchfield**has been Senior Vice PresidentFinance and Administration and Chief Financial Officer of the Company sinceApril 2006 and was Vice President and Chief Financial Officer from December2000 to April 2006.  Prior to joiningCorgenix, Mr. Critchfield was Executive Vice President and Chief FinancialOfficer of U.S. Medical, Inc., a Denver, Colorado based privately helddistributor of new and used capital medical equipment.  From May of 1994 through July of 1999, heserved as President and Chief Financial Officer of W.L.C. Enterprises, Inc., aretail business holding company.  FromNovember 1991 to May 1994, Mr. Critchfield served as Executive Vice Presidentand Chief Financial Officer of Air Methods Corporation, a publicly traded companywhich is the leading U.S. company in the air medical transportation industryand is the successor company to Cell Technology, Inc., a publicly tradedbiotechnology company, where he served in a similar capacity from1987-1991.  From 1986 through September1987 he served as Vice President of Finance and Administration for BiostarMedical Products, Inc., a developer and manufacturer of diagnosticimmunoassays.  In the past, Mr.Critchfield also served as Vice President of Finance for Nuclear Pharmacy, Inc.,formerly a publicly traded company and the world’s largest chain of centralizedradiopharmacies.  Mr. Critchfield is acertified public****accountant in Colorado.  He graduated magna cum laude from CaliforniaState University-Northridge with a Bachelor of Science degree in BusinessAdministration and Accounting.

AnnL. Steinbarger has been the Senior Vice President, Operations of Corgenix sinceApril 2006 and was the Vice President of Sales and Marketing from May 1998 toApril 2006.  Ms. Steinbarger joinedCorgenix’s operating subsidiary in January 1996 as Vice President, Sales andMarketing with responsibility for its worldwide marketing and distributionstrategies.  Prior to joining Corgenix,Ms. Steinbarger was with Boehringer Mannheim Corporation, Indianapolis,Indiana, a $200 million IVD company.  AtBoehringer from 1976 to 1996, she served in a series of increasingly importantsales management positions.  Ms.Steinbarger holds a B.S. degree in Microbiology from Purdue University in WestLafayette, Indiana.

TarynG. Reynolds has been a Vice President of Corgenix since May 1998.  Mr. Reynolds joined Corgenix’s operatingsubsidiary in 1992, serving first as Director of Administration, then asManaging Director, U.S. Operations.  Hehas served as Vice President, Operations and in 1999, became Vice President,Facilities and Information Technology. Prior to joining Corgenix, Mr. Reynolds held executive positions atBrinker International, MJAR Corporation and M&S Incorporated, allColorado-based property, operational and financial management firms.

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RobertTutag was appointed to the Company’s Board of Directors in September 2006.  Mr. Tutag is currently and since 1990, hasbeen President of Unisource, Inc., a privately held Boulder, Colorado companywhich identifies and develops niche pharmaceutical products for generic andbrand name pharmaceutical companies. From 1964 through 1982, Mr. Tutag was President and Chief OperatingOfficer of Tutag Corporation.  In thatcapacity, he developed and managed operations of Cord Laboratories, one of theoriginal generic pharmaceutical manufacturing companies, in addition tofounding and overseeing Geneva Generics, a generic sales and distributioncompany, which developed into one of the country’s premier companies in itsindustry. Both Cord Laboratories and Geneva Generics were acquired byCiba-Geigy Corporation.  During that timeperiod, Mr. Tutag also served as a Director of Geneva Generics and as VicePresident of Sales and a Director of Tutag Pharmaceuticals, a branded distributioncompany. From 1983 through 1989, Mr. Tutag was President and Chief ExecutiveOfficer of NBR Financial, Inc., a multi-bank holding company in Boulder,Colorado. Since 1977 until the present, Mr. Tutag has also been editor of GMPTrends, Inc., Boulder, Colorado, an informational newsletter that reviews FDAand GMP inspection reports (483’s) for the pharmaceutical and medical deviceindustries.  Mr. Tutag also served asinterim president from 1999-2000 and was a director from 1997-2001 of the Bankof Cherry Creek in Boulder, Colorado.  Hereceived a BBA and an MBA from the University of Michigan.

DennisWalczewski****was appointed to the Company’s Boardof Directors on January 3, 2006 to fill the vacancy created by the resignationof Mr. Jun Sasaki on the same day.  Mr.Walczewski’s background consists of over 30 years experience in the Diagnosticand Biotechnology industries.  Mr.Walczewski has held either management or executive positions in Promega, T-CellDiagnostics, Endogen and Boehringer Manheim (now Roche).  He has been employed by MBL international orMBLI for the previous five years and now is their Chief Executive Officer.  Per our arrangement with MBL, Mr. Walczewskiis not compensated by Corgenix for board meetings attended.  Mr. Walczewski hold a B.S. in Chemistry fromSuffolk University and an MBA from Indiana Wesleyan University.  Per our arrangement with MBL, Mr. Walczewskiis not  compensated by Corgenix for boardmeetings attended.

CharlesH. Scoggin, M.D., was appointed to the Company’s Board of Directors on March27, 2006.  Dr. Scoggin is currently aDirector of Nitrox, a privately held North Carolina-based biopharmaceuticalcompany founded on technology developed at Duke University.  Companies previously founded or co-founded byDr. Scoggin include: Somatogen, a biopharmaceutical company that successfullysynthesized and genetically modified the human hemoglobin molecule, for whichDr. Scoggin served as President, Chief Executive Officer and Chairman throughits initial public offering, several secondary financings and strategicalliances; Somatogen Instruments, a biomedical and scientific instrumentscompany, for which Dr. Scoggin served as President and Chief Executive Officeruntil its sale to Beckman Instruments; Rodeer Systems, a biomedical informaticscompany, for which Dr. Scoggin served as Chairman, President and ChiefExecutive Officer; Dr. Scoggin also served as President and Chief ExecutiveOfficer of both Medrock, a medical information company; and Sagemed, a companyfocused on strategic healthcare information services.

LarryG. Rau was appointed to the Company’s Board of Directors on March 27,2006.  Mr. Rau is currently and since1995, has been President and CEO of Rau Financial Services, a Sioux Falls,South Dakota firm specializing in alternative investments such as 1031 propertyexchanges, Real Estate, Oil and Gas, and Medical Receivables in addition tostocks and fixed income investments. From 1986 to 1995, Mr. Rau was an investment executive with A.G. Edwardsand UBS PaineWebber, and from 1968 to 1986, he worked in pharmaceutical salesand/or marketing for Cutter Labs, Baxter International and Fort Dodge Labs.

C.David Kikumoto was appointed to the Company’s Board of Directors onMarch 30, 2006.  Mr. Kikumoto is thefounder and is currently the Chief Executive Officer of Denver ManagementAdvisors, a firm that has assembled leading team of health care costcontainment specialists in the Rocky Mountain West, providing cost containmentservices to large employers, insurers, and healthcare providers.  From 1999-2000, Mr. Kikumoto was thePresident and Vice Chairman at Anthem Blue Cross and Blue Shield, Colorado andNevada.  He led the merger of Blue Crossand Blue Shield to Anthem resulting in the creation of one of the largestprivate foundations in the State of Colorado. Mr. Kikumoto also provided strategic advice and counsel to the newleadership team and served as a liaison to customers, community leaders andregulators.  From 1987 - 1999 Mr.Kikumoto served in several roles at Blue Cross and Blue Shield of Colorado,Nevada and

36

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NewMexico.  From 1993 - 1999Mr. Kikumoto was the President and Chief Executive Officer.  He directed, developed and created one thefirst regional Blue Cross and Blue Shield Plans with total membership of750,000 and annual premium income of $800 million.  From 1991 - 1993 he was the Senior VicePresident, Chief Marketing Officer. Mr. Kikumoto was responsible for the marketing and sales of health,life, dental and workers’ compensation products in a three-state region whileconcurrently serving as the CEO of several subsidiary companies.  During 1987 - 1991 Mr. Kikumoto was the VicePresident, Alternative Delivery Systems. In that position, he managed health care costs in a three-state regionthrough the development of alternatives to traditional health care models.

Alldirectors serve until their successors have been duly elected and qualified,unless they earlier resign.

Directorsare elected by a plurality of the shareholders at annual or special meetings ofshareholders held for that purpose. There have been no material changes to the way in which shareholders mayrecommend nominees to the Board of Directors.

***Audit Committee***

TheCompany’s Board of Directors has a separately designated standing auditcommittee established in accordance with Section 3(a)(58)A) of the Exchange Actof 1934.  The members of the auditcommittee include Messrs. Kikumoto, Tutag and Rau.  The Board of Directors has determined thatall of the audit committee members meet the independence requirements of the AmericanStock Exhcnage and other qualification requirements of the rules of the NasdaqStock Market.  The Board of Directors hasdetermined that, by virtue of Mr. Kikumoto having many years experience as bothPresident and Chief Executive Officer, plus a strong accounting background, Mr.Kikumoto qualifies as an “Audit Committee Finncial Expert” as that term isdefined in the rules promulgated by the SEC. In addition, by virtue of Mr. Tutag having over twenty years experienceas both President and Chief Operating Officer, plus serving over six years asPresident and Chief Executive Officer of a multi-bank holding company, Mr.Tutag also qualifies as an “Audit Committee Financial Expert”.  Biographical information for each of thesepersons is set forth above under “Directors and Executive Officers.”

***Codeof Ethics***

We have adopted a written code of ethics that appliesto our CEO and CFO.  A copy of the codeof ethics can be found on our website at www.corgenix.com.

**COMPLIANCE WITH SECTION 16 (a) OF THE SECURITIESEXCHANGE ACT OF 1934**

Section 16 (a) of the Securities Exchange Act of1934, as amended, requires our directors and executive officers, as well aspersons beneficially owning more than 10% of our outstanding Common Stock, tofile reports of ownership and changes in ownership with the Commission withinspecified time periods.  Such officers,directors and stockholders are also required to furnish us with copies of allSection 16 (a) forms they file.

Based solely on our review of such formsreceived by us, or written representations from certain reporting persons, webelieve that all Section 16 (a) filing requirements applicable to our officers,directors and 10% stockholders were complied with during the fiscal year endedJune 30, 2007.

**Item 10.  ExecutiveCompensation.**

The following table shows how much compensation waspaid by Corgenix for the last three fiscal years to our Principal ExecutiveOfficer, and the other two most highly compensated Executive Officers, forservices rendered during such fiscal years (collectively, the “Named ExecutiveOfficers”).

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##### ***Summary CompensationTable***

| Name and  principal  position                      | ** ** | **Fiscal  Year** | ** ** | **Salary  ($)** | ** ** | **Bonus  ($)** | ** ** | **Stock  Awards  ($)** | ** ** | **Option  Awards  ($)(3)** | ** ** | **Non-Stock  Incentive  Plan Comp  ($)** | ** ** | **All  other  Comp.  ($)(1)** | ** ** | **Total ($)** | ** ** |
|---------------------------------------------------------|------------|------------------|------------|-----------------|------------|----------------|------------|------------------------|------------|----------------------------|------------|-----------------------------------------------|------------|-------------------------------|------------|--------------------|------------|
|                                                    |       |             |       |            |       |           |       |                   |       |                       |       |                                          |       |                          |       |               |       |
| Douglass T. Simpson                                     |       | 2007             |       | $               | 210,121    |           | $          | 19,570                 |       | $                          | —     |                                          | $          | 95,858                        |       | —             |       | $ | 14,697 |   | $ | 340,246 |   |
| President, Chief                                        |       | 2006             |       | $               | 180,000    |           | —     |                   | $          | —                     |       | —                                        |       | —                        |       | $                  | 14,540     |   | $ | 194,540 |   |
| Executive Officer                                       |       | 2005             |       | $               | 157,826    |           | —     |                   | $          | —                     |       | $                                             | 45,510     |                          | —     |               | $          | 11,970 |   | $ | 215,306 |   |
|                                                    |       |             |       |            |       |           |       |                   |       |                       |       |                                          |       |                          |       |               |       |
| Dr. Luis R. Lopez                                       |       | 2007             |       | $               | 184,234    |           | $          | 11,742                 |       | $                          | —     |                                          | $          | 47,762                        |       | —             |       | $ | 19,223 |   | $ | 262,961 |   |
| Chairman and Chief                                      |       | 2006             |       | $               | 184,572    |           | —     |                   | $          | —                     |       | —                                        |       | —                        |       | $                  | 18,289     |   | $ | 202,861 |   |
| Medical Officer                                         |       | 2005             |       | $               | 180,372    |           | —     |                   | $          | —                     |       | $                                             | 22,200     |                          | —     |               | $          | 14,679 |   | $ | 217,251 |   |
|                                                    |       |             |       |            |       |           |       |                   |       |                       |       |                                          |       |                          |       |               |       |
| William H. Critchfield                                  |       | 2007             |       | $               | 179,250    |           | $          | 15,656                 |       | $                          | —     |                                          | $          | 67,134                        |       | —             |       | $ | 14,697 |   | $ | 276,737 |   |
| Senior Vice President                                   |       | 2006             |       | $               | 165,000    |           | $          | 17,556                 |       | $                          | 40,000     |                                          | —     |                          | —     |               | $          | 14,540 |   | $ | 237,096 |   |
| Finance and Administration  and Chief Financial Officer |       | 2005             |       | $               | 140,916    |           | —     |                   | $          | —                     |       | $                                             | 27,750     |                          | —     |               | $          | 13,677 |   | $ | 182,343 |   |

 

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(1)  We paid each executive officer an automobileallowance of $500 per month in 2007, 2006 and 2005, in addition to paying approximately 90% of each officer’s grouphealth insurance premium.

(2)  On February 24, 2006, Mr. Critchfieldreceived a restricted stock award of 100,000 shares and a cash bonus to pay theestimated income taxes on said award of $17,556.  The fair market value of the restricted stockat the date of issuance was $0.40***.***

(3)  Using the Black Scholes valuation of $0.334per option in fiscal 2007 and $0.222 per option in fiscal 2005.

***OutstandingEquity Awards at Fiscal Year End***
| ** **             | ** ** | **OPTION AWARDS**                                                    | ** ** | **STOCK AWARDS**                                                       | ** ** |
|------------------------|------------|---------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------|------------|
| **Name**               | ** ** | **Number of  Securities  Underlying  Exercisable  Options (#)** | ** ** | **Number of  Securities  Underlying  Unexercisable  Options (#)** | ** ** | **Equity  Incentive  Plan  Awards:  Number of  Securities  Underlying  Unexercised,  Unearned  Options (#)** | ** ** | **Weighted  Average  Option  Exercise  Price  ($/Share)** | ** ** | **Option  Expiration  Dates** | ** ** | **Number  of  Shares  of Stock  That  Have  Not  Vested  (#)** | ** ** | **Market  Value of  Shares of  Stock That  Have Not  Vested ($)  (i)** | ** ** | **Equity  Incentive Plan  Awards:  Number of  Unearned  Shares That  Have Not  Vested (#)** | ** ** | **Equity  Incentive  Plan  Awards:  Market or  Payout  Value of  Unearned  Shares  That Have  Not Vested  ($)** | ** ** |
| Douglass T.  Simpson   |       | 217,946                                                                   |       | 353,454                                                                     |       | — |   | $ | 0.370 |   | 2/25/08-  8/1/13 |   | — |   | — |   | — |   | — |   |
| Dr. Luis R.  Lopez     |       | 110,846                                                                   |       | 174,054                                                                     |       | — |   | $ | 0.360 |   | 10/1/09-  8/1/13 |   | — |   | — |   | — |   | — |   |
| William H. Critchfield |       | 139,333                                                                   |       | 242,667                                                                     |       | — |   | $ | 0.379 |   | 12/6/07-  8/1/13 |   | 66,667 |   | $ | 19,333 |   | — |   | — |   |
|                        |            |                                                                           |            |                                                                             |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

38

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***DirectorCompensation***
| **Name**                  | ** ** | **Fees Earned  or Paid in  Cash ($)** | ** ** | **Stock  Awards ($)** | ** ** | **Option  Awards ($)** | ** ** | **Non-Equity  Incentive Plan  Compensation  ($)** | ** ** | **Change in  Pension Value  and  Nonqualified  Deferred  Compensation  Earnings** | ** ** | **All Other  Compensation ($)** | ** ** | **  Total ($)  ** | ** ** |
|---------------------------|------------|-----------------------------------------------------------|------------|----------------------------|------------|-----------------------------|------------|--------------------------------------------------------|------------|---------------------------------------------------------------------------------------------|------------|-------------------------------------------|------------|--------------------------------------------|------------|
| Luis R. Lopez  M.D.       |       | —                                                    |       | —                     |       | —                      |       | —                                                 |       | —                                                                                      |       | —                                    |       | —                                     |       |
| Douglass T.  Simpson      |       | —                                                    |       | —                     |       | —                      |       | —                                                 |       | —                                                                                      |       | —                                    |       | —                                     |       |
| Robert Tutag              |       | $                                                         | 5,500      |                       | —     |                        | $          | 13,360                                                 |       | —                                                                                      |       | —                                    |       | —                                     |       | $ | 18,860 |   |
| Dennis  Walczewski        |       | —                                                    |       | —                     |       | $                           | 13,360     |                                                   | —     |                                                                                        | —     |                                      | —     |                                       | $          | 13,360 |   |
| Charles H.  Scoggin, M.D. |       | $                                                         | 4,750      |                       | —     |                        | $          | 13,360                                                 |       | —                                                                                      |       | —                                    |       | —                                     |       | $ | 18,110 |   |
| Larry G. Rau              |       | $                                                         | 5,500      |                       | —     |                        | $          | 13,360                                                 |       | —                                                                                      |       | —                                    |       | —                                     |       | $ | 18,860 |   |
| C. David Kikumoto         |       | $                                                         | 4,500      |                       | —     |                        | $          | 13,360                                                 |       | —                                                                                      |       | —                                    |       | —                                     |       | $ | 17,860 |   |

 

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* Using Black Scholesvaluation of $0.334 per option

Our current policy is to pay each independent director$500 per board meeting and $250 per board committee (audit, compensation andnominating) either attended in person or via telephone.  In addition, annually each independentdirector is granted options to purchase 40,000 shares of the our common stockat the fair market value at the date of grant and vesting 100% upon grant.

***Long-Term Incentive Compensation***

EffectiveJanuary 1, 1999, we adopted a Stock Compensation Plan to provide executiveofficers an opportunity to purchase shares of its common stock as a bonus or inlieu of cash compensation for services rendered.  No issuance of stock was made under the StockCompensation Plan to any Named Executive Officer during the three fiscal yearsended June 30, 2007.

***AggregatedOption Exercises in Last Fiscal Year and Fiscal Year-End Option Values***

The following table sets forth information concerningoption exercises by the Named Executive Officers during the fiscal year endedJune 30, 2007 and outstanding options held by the Named Executive Officers asof June 30, 2007:
| Name                   | ** ** | **Number of  Shares  Acquired  on Exercise** | ** ** | **Value  Realized ($)** | ** ** | **Number of Shares  Underlying   Options at FY-End #  Exercisable/Unexercisable** | ** ** | **Value of In-the-Money  Options at FY-End ($)  Exercisable/Unexercisable(1)** | ** **     |
|------------------------|------------|--------------------------------------------------------|------------|------------------------------|------------|-----------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------|----------------|
| Douglass T.  Simpson   |       | 0                                                      |       | 0                            |       | 217,946/353,454                                                                                                 |       | $                                                                                                       | 63,204/102,502 |   |
| Dr. Luis R. Lopez      |       | 0                                                      |       | 0                            |       | 110,846/174,054                                                                                                 |       | $                                                                                                       | 32,145/50,476  |   |
| William H. Critchfield |       | 0                                                      |       | 0                            |       | 139,333/242,667                                                                                                 |       | $                                                                                                       | 40,407/70,373  |   |

 

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(i)  Based on the price of the Company’s commonstock at June 30, 2007 of $0.29 per share.

***Employment and Consulting Agreements***

We have entered into employment agreements as of July1, 2006 with the following officers. The current annual salaries are as notedopposite each of their names:

| Officer                                 | ** ** | **Current Annual Salary**   |
|-----------------------------------------|------------|-----------------------------|
|                                    |       |                        |
| · Douglass T.  Simpson – |       | $200,450 as of July 1, 2007 |
| · Dr. Luis R.  Lopez –   |       | $180,500 as of July 1, 2007 |

 

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| · William  H. Critchfield – |   | $171,000 as of July 1, 2007 |
|--------------------------------------------|--------|-----------------------------|
| · Ann L.  Steinbarger –     |   | $152,950 as of July 1, 2007 |
| · Taryn G.  Reynolds –      |   | $117,800 as of July 1, 2007 |

 

Eachof the above employment agreements is for continuously renewable terms of threeyears, provides for severance payments equal to eighteen month’s salary andbenefits if the employment of the officer is terminated without cause (asdefined in the respective agreements), and an automobile expense reimbursementof $500 per month.

***Compensation Committee Interlocks and Insider Participation***

TheCompensation Committee of Corgenix is currently composed of Messrs. Tutag,Scoggin, and Kikumoto, with Mr. Tutag serving as Chairman.  No interlocking relationship exists betweenany member of the Board or Compensation Committee and any member of the boardof directors or compensation committee of any other company, nor has any suchinterlocking relationship existed in the past.

**Item 11.  SecurityOwnership of Certain Beneficial Owners and Management and Related StockholderMatters.**

Thefollowing table sets forth, as of June 30, 2007, certain information regardingthe ownership of our common stock by (i) each person known by us to be thebeneficial owner of more than 5% of the outstanding shares of common stock (ii)each of our directors, (iii) each executive officer and (iv) all of ourexecutive officers and directors as a group. Unless otherwise indicated, the address of each person shown is c/oCorgenix, 11575 Main Street, Suite 400, Broomfield, CO 80020.  Beneficial ownership, for purposes of thistable, includes debt convertible into common stock and options and warrants topurchase common stock that are either currently exercisable or convertible orwill be exercisable or convertible within 60 days of June 30, 2007.  Other than Dr. Lopez and Mr. Reynolds, noother director or executive officer beneficially owned more than 5% of thecommon stock.

Thepercentage ownership data is based on 14,483,342 shares of our common stockoutstanding as of June 30, 2007, in addition to warrants and stock optionsoutstanding in addition to common shares underlying both convertible debt andconvertible preferred stock.  Under therules of the SEC, beneficial ownership includes shares over which the indicatedbeneficial owner exercises voting and/or investment power.  Shares of common stock subject to options orwarrants or underlying convertible debt that are currently exercisable or convertible, or will becomeexercisable or convertible, within 60 days of June 30, 2007 are deemedoutstanding for the purpose of computing the percentage ownership of the personholding the option or warrant, convertible preferred stock, or convertible promissorynote, but are not deemed outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, we believe that the beneficial owners of theshares of common stock listed below have sole voting and investment power withrespect to all shares beneficially owned.

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| ** **                                                                                                              | ** ** | **Amount and Nature  of Beneficial Owner** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------|------------|
| **Name and Address of Beneficial Owner**                                                       | ** ** | **Number**                                                     | ** ** | **Percent of Class** | ** ** |
|                                                                                                                    |       |                                                           |       |   |   |
| Barron Partners LP (2)  c/o Barron Capital Advisors, LLC  730 Fifth Avenue, 9th Floor  New York, NY 10019          |       | 2,923,719                                                      |       | 4.90 | % |
|                                                                                                                    |       |                                                           |       |   |   |
| CAMOFI Master LDC (3)  350 Madison Avenue  New York, NY 10017                                                           |       | 2,977,420                                                      |       | 4.99 | % |
|                                                                                                                    |       |                                                           |       |   |   |
| Truk Opportunity Fund (3)  c/o RAM Capital Resources, LLC  One East 52nd Street, Sixth Floor  New York, NY 10022        |       | 2,977,420                                                      |       | 4.99 | % |
|                                                                                                                    |       |                                                           |       |   |   |
| Taryn G. Reynolds (1)                                                                                                   |       | 939,311                                                        |       | 6.37 | % |
|                                                                                                                    |       |                                                           |       |   |   |
| Ascendiant Capital Group LLC, Ascendiant Securities LLC (4)  18881 Von Karman Avenue, 16th Floor  Irvine, CA 92612 |       | 2,977,420                                                      |       | 4.99 | % |
|                                                                                                                    |       |                                                           |       |   |   |
| Dr. Luis R. Lopez (1)                                                                                              |       | 881,347                                                        |       | 6.26 | % |
|                                                                                                                    |       |                                                           |       |   |   |
| Douglass T. Simpson (1)                                                                                                 |       | 426,066                                                        |       | 3.50 | % |
|                                                                                                                    |       |                                                           |       |   |   |
| William H. Critchfield (1)                                                                                              |       | 249,333                                                        |       | 2.15 | % |
|                                                                                                                    |       |                                                           |       |   |   |
| Robert Tutag (1)                                                                                                        |       | 190,000                                                        |       | 1.31 | % |
|                                                                                                                    |       |                                                           |       |   |   |
| Ann L. Steinbarger (1)                                                                                                  |       | 120,343                                                        |       | 1.13 | % |
|                                                                                                                    |       |                                                           |       |   |   |
| Larry G. Rau (1)                                                                                                        |       | 92,000                                                         |       | 0.63 | % |
|                                                                                                                    |       |                                                           |       |   |   |
| Dr. Charles H. Scoggin (1)                                                                                              |       | 70,000                                                         |       | 0.48 | % |
|                                                                                                                    |       |                                                           |       |   |   |
| David Kikumoto (1)                                                                                                      |       | 95,000                                                         |       | 0.65 | % |
|                                                                                                                    |       |                                                           |       |   |   |
| Dennis Walczewski (1)                                                                                                   |       | 40,000                                                         |       | 0.28 | % |
|                                                                                                                    |       |                                                           |       |   |   |
| Mid South Investor Fund                                                                                                 |       | 800,000                                                        |       | 5.38 | % |
|                                                                                                                    |       |                                                           |       |   |   |
| Medical & Biological Laboratories Co., Ltd.                                                                         |       | 1,549,300                                                      |       | 10.08 | % |
|                                                                                                                    |       |                                                           |       |   |   |
| All  current directors and current executive officers as a group (11 persons)                                           |       | 2,755,375                                                      |       | 22.76 | % |

 

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(1)**               **Current director or officer

41

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(2)                Contractual restrictions in the Barron Partners preferred stock purchaseagreement and warrants prohibit Barron Partners, L.P. from exercising anywarrants or converting any preferred stock if such conversion or exercise wouldcause it to exceed 4.90% beneficial ownership of Corgenix.  Barron Partners holds convertible preferredstock plus warrants to acquire up to 20,714,286 shares of common stock.

(3)                Contractual restrictions in its convertible note, warrants, and purchaseagreement with Corgenix prohibit each of CAMOFI and Truk Opportunity Fund fromexercising any warrants or converting any debt if such conversion or exercisewould cause either entity to exceed 4.99% beneficial ownership ofCorgenix.  CAMOFI holds convertible debtand warrants to acquire up to 4,715,494 shares of common stock.  Truk Opportunity Fund holds convertible debtand warrants to acquire up to 2,438,950 shares of common stock, without takinginto account interest on the debt, which may also be converted into shares ofcommon stock.  Michael E. Fein andStephen E. Saltzstein, as principals of Atoll Asset Management, LLC, theManaging Member of Truk Opportunity Fund, LLC, exercise investment and votingcontrol over the securities owned by Truk Opportunity Fund, LLC.  Both Mr. Fein and Mr. Saltzsteindisclaim beneficial ownership of the securities owned by Truk Opportunity Fund,LLC.

(4)                For purposes of this calculation, the holdings of Ascendiant CapitalGroup, LLC have been aggregated with Ascendiant Securities, L.P. Contractualrestrictions in the warrants held by the Ascendiant entities prohibit them fromexercising any warrants if such exercise would cause either entity to exceed4.99% beneficial ownership of Corgenix. The Ascendiant entities together hold warrants to acquire up to3,281,626 shares of common stock.

***Equity Compensation***

**EquityCompensation Plan Information**
| **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 security holders     |       | 2,305,600                                                                                                                                                 |       | $                                                                                                                     | 0.38       |                                                                                                                                                                                                             | 3,013,667  |   |
| Equity  compensation plans not approved by security holders |       | —                                                                                                                                                    |       | —                                                                                                                |       | —                                                                                                                                                                                                           |       |
| Total                                                       |       | 2,305,600                                                                                                                                                 |       | $                                                                                                                     | 0.38       |                                                                                                                                                                                                             | 3,013,667  |   |

 

**Item 12.  CertainRelationships and Related Transactions and Director Independence.**

***CertainRelationships and Related Transactions***

There have not been any transactions, or series ofsimilar transactions, since the beginning of the our last fiscal year, or anycurrently proposed transaction, or series of similar transactions, to which theCompany or any of its subsidiaries was or is to be a party, in which the amountinvolved exceeds $120,000 and in which any director or executive officer of theCompany, nominee for election as a director, any five percent security holderor any member of the immediate family of any of the foregoing persons had, orwill have, a direct or indirect material interest.

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***Director Independence***

Because the Company's common stock is traded on the Overthe Counter Bulletin Board, the Company is not subject to the independencerequirements of any securities exchange or the Nasdaq regarding our directors,the membership of our board of directors or our committees.   However, the Board has determined thatMessrs. Tutag, Kikumoto, Scoggin and Rau are each "independent" asthat term is defined by the American Stock Exchange.   Under the American Stock Exchangedefinition, an independent director is a person who (1) is not an executiveofficer or employee of the Company; (2) is not currently and has not been overthe past three years employed by the Company, other than prior employment as aninterim executive officer (provided the interim employment did not last longerthan one year); (3) has not (or whose immediate family members have not) beenpaid more than $100,000 during any period of twelve consecutive months withinthe past three fiscal years [excluding compensation for board or boardcommittee service, compensation paid to an immediate family member who is anemployee (other than an executive officer) of the company, compensationreceived for former service as an interim executive officer (provided theinterim employment did not last longer than one year), or benefits under atax-qualified retirement plan or non-discretionary compensation]; (4) is not animmediate family member of an individual who is, or at any time during the pastthree fiscal  years was, employed by theCompany as an executive officer; (5) is not (or whose immediate family memberis not) a partner in, controlling shareholder or an executive officer of, anyorganization to which the Company made, or from which the Company received,payments (other than those arising solely from investments in the Company'ssecurities or payments under non-discretionary charitable contribution matchingprograms) that exceed 5% of the organization's consolidated gross revenues forthat year, or $200,000, whichever is more, in any of the most recent threefiscal years; (6) is not (or whose immediate family member is not) employed asan executive officer of another entity where at any time during the most recentthree fiscal years any of the issuer's executive officers serve on thecompensation committee of such other entity; or (7) is not (or whose immediatefamily member is not) a current partner of the Company's outside auditor, orwas a partner or employee of the Company's outside auditor who worked on theCompany's audit at any time during any of the past three years.

43

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I**tem 13.  Exhibits and Reports to Form 10-KSB**

**a. Index to and Description of Exhibits**
| Exhibit  Number | ** ** | **Description of Exhibit**                                                                                                                                                                                                                                              |
|-----------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **      | ** ** | ** **                                                                                                                                                                                                                                                              |
| 3.1             |       | Articles of Incorporation, as amended, filed with  the Company’s Registration Statement on Form 10-SB filed June 29, 1998 and  incorporated herein by reference.                                                                                                   |
|            |       |                                                                                                                                                                                                                                                                    |
| 3.2             |       | Articles of Amendment to the Articles of  Incorporation, filed with the Company’s Registration Statement on Form   SB-2 filed April 6, 2006 and incorporated herein by reference.                                                                                  |
|            |       |                                                                                                                                                                                                                                                                    |
| 3.3             |       | Amended and Restated Certificate of Designations,  Preferences, Rights and Limitations of Series A Convertible Preferred Stock  for Corgenix Medical Corporation, filed with the Company’s Form 8-K filed  December 30, 2005 and incorporated herein by reference. |
|            |       |                                                                                                                                                                                                                                                                    |
| 3.4             |       | Bylaws, filed with the Company’s Registration  Statement on Form 10-SB filed June 29, 1998 and incorporated herein by  reference.                                                                                                                                  |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.2            |       | Office Lease dated May 5, 2001 between Crossroads  West LLC/Decook Metrotech LLC and Corgenix, Inc., filed as exhibit 10.9 to  the Company’s Form 10-KSB filed September 28, 2001 and incorporated herein by  reference.                                           |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.3            |       | Guarantee dated November 1, 1997 between William  George Fleming, Douglass Simpson and Geoffrey Vernon Callen, filed with the  Company’s Registration Statement on Form 10-SB filed June 29, 1998 and  incorporated herein by reference.                           |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.4            |       | Employment Agreement dated July 1, 2005 between Luis  R. Lopez and the Company, filed as exhibit 10.7 to the Company’s Form 10-KSB  filed September 22, 2005 and incorporated herein by reference.                                                                 |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.5            |       | Employment Agreement dated July 1, 2005 between  Douglass T. Simpson and the Company, filed as exhibit 10.8 to the Company’s  Form 10-KSB filed September 22, 2005 and incorporated herein by reference.                                                           |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.6            |       | Employment Agreement dated July 1, 2005 between Ann  L. Steinbarger and the Company, filed as exhibit 10.10 to the Company’s Form  10-KSB filed September 22, 2005 and incorporated herein by reference.                                                           |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.7            |       | Employment Agreement dated July 1, 2005 between  Taryn G. Reynolds and the Company, filed as exhibit 10.11 to the Company’s  Form 10-KSB filed September 22, 2005 and incorporated herein by reference.                                                            |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.8            |       | Employment Agreement dated July 1, 2005 between  William H. Critchfield and the Company, filed as exhibit 10.9 to the  Company’s filing on Form 10-KSB filed September 22, 2005 and incorporated  herein by reference.                                             |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.9            |       | Form of Indemnification Agreement between the  Company and its directors and officers, filed with the Company’s Registration  Statement on Form 10-SB/A-1 filed September 24, 1998 and incorporated herein  by reference.                                          |
|            |       |                                                                                                                                                                                                                                                                    |

 

44

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| Exhibit  Number | ** ** | **Description of Exhibit**                                                                                                                                                                                                     |
|-----------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **      | ** ** | ** **                                                                                                                                                                                                                     |
| 10.10           |       | Warrant Agreement dated June 1, 2000 between the  Company and Taryn G. Reynolds, filed as exhibit 10.27 to the Company’s Form  10-KSB filed October 2, 2000 and incorporated herein by reference.                         |
|            |       |                                                                                                                                                                                                                           |
| 10.11           |       | Consulting Agreement dated September 29, 2002  between Eiji Matsuura, Ph.D and the Company, filed as exhibit 10.32 to the  Company’s Form 10-QSB filed November 14, 2002 and incorporated herein by  reference.           |
|            |       |                                                                                                                                                                                                                           |
| 10.12           |       | License Agreement dated September 29, 2002 between  Eiji Matsuura, Ph.D and the Company, filed as exhibit 10.33 to the Company’s  Form 10-QSB filed November 14, 2002 and incorporated herein by reference.               |
|            |       |                                                                                                                                                                                                                           |
| 10.13           |       | Amended and Restated 1999 Incentive Stock Plan filed  with the Company’s filing of Proxy Statement Schedule 14A Information on  October 23, 2002 and incorporated herein by reference.                                    |
|            |       |                                                                                                                                                                                                                           |
| 10.14           |       | Amended and Restated Employee Stock Purchase Plan,  filed with the Company’s filing of Proxy Statement Schedule 14A Information  on October 23, 2002 and incorporated herein by reference.                                |
|            |       |                                                                                                                                                                                                                           |
| 10.15           |       | Warrant Agreement dated October 11, 2001 between  Phillips V. Bradford and the Company, filed as exhibit 21.4 to Company’s Form  10-QSB filed February 12, 2002 and incorporated herein by reference.                     |
|            |       |                                                                                                                                                                                                                           |
| 10.16           |       | Warrant Agreement dated October 11, 2001 between  Charles F. Ferris and the Company, filed as exhibit 21.5 to the Company’s  Form 10-QSB filed February 12, 2002 and incorporated herein by reference.                    |
|            |       |                                                                                                                                                                                                                           |
| 10.17           |       | Underlease Agreement  dated October 3, 2001 between G.V. Calen, A.G. Pirmohamed and Corgenix UK,  Ltd., filed as exhibit 21.6 to the Company’s Form 10-QSB filed February 12,  2002 and incorporated herein by reference. |
|            |       |                                                                                                                                                                                                                           |
| 10.18           |       | Form of Securities  Purchase Agreement dated May 19, 2005, filed as exhibit 2.1 to the Company’s  Registration Statement on Form SB-2 filed June 24, 2005 and incorporated  herein by reference.                          |
|            |       |                                                                                                                                                                                                                           |
| 10.19           |       | Form of Secured  Convertible Term Note dated May 19, 2005, filed as exhibit 10.32 to the  Company’s Registration Statement on Form SB-2 filed June 24, 2005 and  incorporated herein by reference.                   |
|            |       |                                                                                                                                                                                                                           |
| 10.20           |       | Form of Registration  Rights Agreement dated May 19, 2005, filed as exhibit 10.33 to the Company’s  Registration Statement on Form SB-2 filed June 24, 2005 and incorporated  herein by reference.                        |
|            |       |                                                                                                                                                                                                                           |
| 10.21           |       | Form of Restricted  Account Agreement dated May 19, 2005, filed as exhibit 10.34 to the Company’s  Registration Statement on Form SB-2 filed June 24, 2005 and incorporated  herein by reference.                         |
|            |       |                                                                                                                                                                                                                           |
| 10.22           |       | Form of Restricted  Account Side Letter dated May 19, 2005, filed as exhibit 10.35 to the  Company’s Registration Statement on Form SB-2 filed June 24, 2005 and  incorporated herein by reference.                       |
|            |       |                                                                                                                                                                                                                           |
| 10.23           |       | Form of Stock Pledge  Agreement dated May 19, 2005, filed as exhibit 10.36 to the Company’s  Registration Statement on Form SB-2 filed June 24, 2005 and incorporated  herein by reference.                               |
|            |       |                                                                                                                                                                                                                           |
| 10.24           |       | Form of Lockup Letter  dated May 19, 2005, filed as exhibit 10.37 to the Company’s Registration  Statement on Form SB-2 filed June 24, 2005 and incorporated herein by  reference.                                        |

 

45

----

 
| Exhibit  Number | ** ** | **Description of Exhibit**                                                                                                                                                                                                                                                              |
|-----------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **      | ** ** | ** **                                                                                                                                                                                                                                                                              |
| 10.25           |       | Form of Subsidiary Guaranty dated May 19, 2005,  filed as exhibit 10.38 to the Company’s Registration Statement on Form SB-2  filed June 24, 2005 and incorporated herein by reference.                                                                                            |
|            |       |                                                                                                                                                                                                                                                                                    |
| 10.26           |       | Form of Letter Agreement dated June 7, 2005 between  the Company and certain officers, directors and affiliated persons, filed as  exhibit 10.39 to the Company’s Registration Statement on Form SB-2 filed June  24, 2005 and incorporated herein by reference.                   |
|            |       |                                                                                                                                                                                                                                                                                    |
| 10.27           |       | Lease Agreement dated February 8, 2006 between  Corgenix Medical Corporation and York County, LLC, a California limited  liability company (as landlord), filed with the Company’s Registration  Statement on Form SB-2 filed April 6, 2006 and incorporated herein by  reference. |
|            |       |                                                                                                                                                                                                                                                                                    |
| 10.28*          |       | First Amendment to Lease Agreement between Corgenix  Medical Corporation and York County, LLC, dated December 11, 2006                                                                                                                                                                  |
|            |       |                                                                                                                                                                                                                                                                                    |
| 10.29*          |       | Second Amendment to Lease Agreement between Corgenix  Medical Corporation and York County, LLC, dated June 19, 2007.                                                                                                                                                                    |
|            |       |                                                                                                                                                                                                                                                                                    |
| 10.30*          |       | Third Amendment to Lease Agreement between Corgenix  Medical Corporation and York County, LLC, dated July 19, 2007.                                                                                                                                                                     |
|            |       |                                                                                                                                                                                                                                                                                    |
| 10.31           |       | Preferred Stock Purchase Agreement between Corgenix  Medical Corporation and Barron Partners L.P., dated December 28, 2005, filed  as exhibit 10.1 to the Company’s quarterly report on Form 10-QSB filed  February 13, 2006 and incorporated herein by reference.                 |
|            |       |                                                                                                                                                                                                                                                                                    |
| 10.32           |       | Escrow Agreement between Corgenix Medical  Corporation, Barron Partners LP and Epstein, Becker & Green, P.C., dated  December 28, 2005, filed as exhibit 10.2 to the Company’s quarterly report on  Form 10-QSB filed February 13, 2006 and incorporated herein by reference.  |
|            |       |                                                                                                                                                                                                                                                                                    |
| 10.33           |       | Registration Rights Agreement between Corgenix  Medical Corporation and Barron Partners L.P., dated December 28, 2005, filed  as exhibit 10.3 to the Company’s quarterly report on Form 10-QSB filed  February 13, 2006 and incorporated herein by reference.                      |
|            |       |                                                                                                                                                                                                                                                                                    |
| 10.34           |       | Common Stock Purchase Warrant “A” dated December 28,  2005 issued to Barron Partners, filed as exhibit 10.4 to the Company’s  quarterly report on Form 10-QSB filed February 13, 2006 and incorporated  herein by reference.                                             |
|            |       |                                                                                                                                                                                                                                                                                    |
| 10.35           |       | Common Stock Purchase Warrant “B” dated December 28,  2005 issued to Barron Partners, filed as exhibit 10.5 to the Company’s  quarterly report on Form 10-QSB filed February 13, 2006 and incorporated  herein by reference.                                             |

 

46

----

 
| Exhibit  Number | ** ** | **Description of Exhibit**                                                                                                                                                                                                                                              |
|-----------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **      | ** ** | ** **                                                                                                                                                                                                                                                              |
| 10.36           |       | Common Stock Purchase  Warrant “C” dated December 28, 2005 issued to Barron Partners, filed as  exhibit 10.6 to the Company’s quarterly report on Form 10-QSB filed February  13, 2006 and incorporated herein by reference.                             |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.37           |       | Common Stock Purchase  Warrant #118 dated December 28, 2005 issued to Ascendiant Securities, L.L.C.,  filed as exhibit 10.7 to the Company’s quarterly report on Form 10-QSB filed  February 13, 2006 and incorporated herein by reference.                        |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.38           |       | Common Stock Purchase  Warrant #119 dated December 28, 2005 issued to Ascendiant Securities, L.L.C.,  filed as exhibit 10.8 to the Company’s quarterly report on Form 10-QSB filed  February 13, 2006 and incorporated herein by reference.                        |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.39           |       | Common Stock Purchase  Warrant #120 dated December 28, 2005 issued to Ascendiant Securities, L.L.C. ̧  filed as exhibit 10.9 to the Company’s quarterly report on Form 10-QSB filed  February 13, 2006 and incorporated herein by reference.                   |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.40           |       | Form of Barron Lockup  Letter, filed as exhibit 10.3 to the Company’s Form 8-K filed December 20,  2005 and incorporated herein by reference.                                                                                                                      |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.41           |       | Form of Lockup Letter  in connection with Secured Convertible Term Note financing, filed as exhibit  10.7 to the Company’s Form 8-K filed December 20, 2005 and incorporated  herein by reference.                                                                 |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.42           |       | Securities Purchase  Agreement dated December 28, 2005 by and among Corgenix Medical Corporation  and Truk Opportunity Fund, LLC, Truk International Fund, LP, and CAMOFI  Master LDC.                                                                                  |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.43           |       | Registration Rights  Agreement among Truk International Fund, LP, Truk Opportunity Fund, LLC,  CAMOFI Master LDC and Corgenix Medical Corporation, filed as exhibit 10.6 to  the Company’s Form 8-K filed December 20, 2005 and incorporated herein by  reference. |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.44           |       | Product Development,  Manufacturing and Distribution Agreement dated May 13, 2004 between Creative  Clinical Concepts, Inc. and the Company, filed as exhibit 10.26 to the  Company’s Form 10-KSB filed September 22, 2005 and incorporated herein by  reference.  |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.45           |       | Supply Agreement dated  September 12, 2003 between DiaDexus, Inc. and the Company, filed as exhibit  10.31 to the Company’s Form 10-KSB filed September 22, 2005 and incorporated  herein by reference.                                                            |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.46           |       | Distribution Agreement  and OEM Supply Agreement dated March 31, 2005 between MBL International, Inc.  and the Company, filed as exhibit 10.33 to the Company’s Form 10-KSB filed  September 22, 2005 and incorporated herein by reference.                        |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.47           |       | Form of Term Note  Security Agreement dated May 19, 2005, filed as exhibit 4.1 to the Company’s  Registration Statement on Form SB-2 filed June 24, 2005 and incorporated  herein by reference.                                                                    |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.48           |       | Form of Common Stock  Purchase Warrant dated May 19, 2005, filed as exhibit 4.2 to the Company’s  Registration Statement on Form SB-2 filed June 24, 2005 and incorporated  herein by reference.                                                                   |
|            |       |                                                                                                                                                                                                                                                                    |
| 10.49           |       | Form of Secured  Convertible Term Note dated December 30, 2005, filed as exhibit 4.3 to the  Company’s Form 8-K filed December 30, 2005 and incorporated herein by  reference.                                                                                     |

 

47

----

 
| Exhibit  Number | ** ** | **Description of Exhibit**                                                                                                                                                                                                                |
|-----------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **      | ** ** | ** **                                                                                                                                                                                                                                |
| 10.50           |       | Form of AIR Warrant  dated December 30, 2005, filed as exhibit 4.4 to the Company’s Form 8-K filed  December 30, 2005 and incorporated herein by reference.                                                                          |
|            |       |                                                                                                                                                                                                                                      |
| 10.51           |       | Corgenix Medical  Corporation 2005 Incentive Compensation Plan, filed with the Company’s filing  of Proxy Statement Schedule 14A Information on October 27, 2005 and  incorporated herein by reference.                         |
|            |       |                                                                                                                                                                                                                                      |
| 10.52           |       | Amendment Concerning  Secured Convertible Term Notes (including Amendment No. 1 to each Secured  Convertible Term Note), filed as exhibit 10 to the Company’s Form 8-K filed  December 5, 2006 and incorporated herein by reference. |
|            |       |                                                                                                                                                                                                                                      |
| 10.53           |       | Placement Agent  Agreement dated June 17, 2007, filed as Exhibit 4.4 to the Company’s Form 8-K  filed July 27, 2007 and incorporated herein by reference.                                                                            |
|            |       |                                                                                                                                                                                                                                      |
| 10.54           |       | Form of Common Stock  Purchase Warrant, filed as Exhibit 4.1 to the Company’s Form 8-K filed July  27, 2007 and incorporated herein by reference.                                                                                    |
|            |       |                                                                                                                                                                                                                                      |
| 10.55           |       | Form of Subscription  Agreement, filed as Exhibit 4.2 to the Company’s Form 8-K filed July 27, 2007  and incorporated herein by reference.                                                                                           |
|            |       |                                                                                                                                                                                                                                      |
| 10.56           |       | Form of Registration  Rights Agreement, filed as Exhibit 4.3 to the Company’s Form 8-K filed July  27, 2007 and incorporated herein by reference.                                                                                    |
|            |       |                                                                                                                                                                                                                                      |
| 10.57           |       | Consulting Agreement  dated March 1, 2006 between Corgenix Medical Corporation and Gordon E. Ens,  filed as Exhibit 10.1 to the Company’s Form 10-QSB filed May 15, 2007 and  incorporated herein by reference.                      |
|            |       |                                                                                                                                                                                                                                      |
| 10.58           |       | License Agreement dated  March 1, 2007 between Corgenix Medical Corporation and Creative Clinical  Concepts, filed as Exhibit 10.2 to the Company’s Form 10-QSB filed May 15,  2007 and incorporated herein by reference.(1)         |
|            |       |                                                                                                                                                                                                                                      |
| 10.59           |       | Letter Agreement dated  August 13, 2007 between Corgenix Medical Corporation and Barron Partners, LP.                                                                                                                                     |
|            |       |                                                                                                                                                                                                                                      |
| 21.1            |       | Subsidiaries of the  Registrant, filed as Exhibit 21.1 to the Company’s Registration Statement on  Form 10-SB, filed June 29, 1998 and incorporated herein by reference.                                                             |
|            |       |                                                                                                                                                                                                                                      |
| 21.2*           |       | Consent of Independent  Registered Public Account Firm                                                                                                                                                                                    |
|            |       |                                                                                                                                                                                                                                      |
| 31.1*           |       | Certification pursuant  to section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                            |
|            |       |                                                                                                                                                                                                                                      |
| 31.2*           |       | Certification pursuant  to section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                            |
|            |       |                                                                                                                                                                                                                                      |
| 32.1*           |       | Certification by Chief  Executive Officer pursuant to 18 U.S.C. Section 1350, or adopted  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                            |

 

48

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| Exhibit  Number | ** ** | **Description of Exhibit**                                                                                                                                         |
|-----------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **      | ** ** | ** **                                                                                                                                                         |
| 32.2*           |       | Certification by  Principal Financial Officer pursuant to 18 U.S.C. Section 1350, or  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |

 

----

(1) Exhibit omits certain information that has beenfiled separately with the Securities and Exchange Commission pursuant to aconfidential treatment request under Rule 24b-2 of the Securities and Exchange Actof 1934, as amended.

* Filed herewith

**(b)****                                 Reportson Form 8-K.**

1.   Form 8-K filed January 4, 2007 *Other Events*

2.   Form 8-K filed February 14,2007 *Results of Operations and Financial Conditions*

3.   Form 8-K filed March 1, 2007 *Entry into a Material Definitive Agreement and Unregistered Sales ofEquity Securities*

4.   Form 8-K filed April 26, 2007 *Annual Shareholders’ Meeting*

5.   Form 8-K filed May 15, 2007 *Other Events*

6.   Form 8-K filed June 28, 2007 *Other Events*

7.   Form 8-K filed July 23, 2007 *Entry into Material Agreements*

**Item14.  Principal Accountant Fees andServices.**

Ourprincipal outside accountant who serves as our auditor and our principaloutside accountant for preparation of our Federal and State income tax returnsis Hein & Associates LLP.  Hein &Associates LLP also was the principal outside accountant for preparation of ourFederal and State income tax returns.

The aggregate feesbilled for each of the last two fiscal years for professional services renderedby our principal accountants are as follows:
|      | ** ** | **Audit Fees  (Includes Form  QSB Reviews &  Consents)** | ** ** | **Audit-Related  Fees** | ** ** | **Tax Fees** | ** ** | **All Other Fees** | ** ** |
|------|------------|----------------------------------------------------------------------------------|------------|-------------------------|------------|-------------------|------------|------------------------------|------------|
| 2007 |       | $                                                                                | 119,310    |                    | —     |              | $          | 8,395                        |       | $ | — |   |
| 2006 |       | $                                                                                | 83,225     |                    | —     |              | $          | 5,260                        |       | $ | — |   |

 

Our Audit Committee (the“Committee”), consisting of Messrs. Kikumoto, Tutag and Rau, is responsible forthe appointment, compensation, retention and oversight of the work of theregistered public accounting firm (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting)for the purpose of preparing or issuing an audit report or performing otheraudit, review or attest services for the Company.  The Committee pre-approves all permissiblenon-audit services and all audit, review or attest engagements required underthe securities laws (including the fees and terms thereof) to be performed forus by its registered public accounting firm, provided, however, that de-minimusnon-audit services may instead be approved in accordance with applicable SECrules.

 

49

----

**CORGENIX MEDICAL CORPORATION****AND SUBSIDIARIES**

ConsolidatedFinancial Statements

June30, 2007 and 2006

(WithIndependent Registered Public Accounting Firm’s Report Thereon)

50

----

**CORGENIX MEDICAL CORPORATION****AND SUBSIDIARIES**

ConsolidatedFinancial Statements

June30, 2007 and 2006
| Index to Consolidated Financial Statements                                                               |   |
|----------------------------------------------------------------------------------------------------------|--------|
|                                                                                                     |   |
| Report of Independent Registered Public Accounting  Firm                                                 |   |
|                                                                                                     |   |
| Consolidated Balance Sheets as of June 30, 2007 and  2006                                                |   |
|                                                                                                     |   |
| Consolidated Statements of Operations and  Comprehensive Loss for the years ended June 30, 2007 and 2006 |   |
|                                                                                                     |   |
| Consolidated Statements of Stockholders’ Equity for  the years ended June 30, 2007 and 2006         |   |
|                                                                                                     |   |
| Consolidated Statements of Cash Flows for the years  ended June 30, 2007 and 2006                        |   |
|                                                                                                     |   |
| Notes to Consolidated Financial Statements                                                               |   |

 

51

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**Reportof Independent Registered Public Accounting Firm**

The Board ofDirectors and ShareholdersCorgenix Medical Corporation:

We have auditedthe accompanying consolidated balance sheets of Corgenix Medical Corporationand subsidiaries (Company) as of June 30, 2007 and 2006, and the relatedconsolidated statements of operations and comprehensive loss, stockholders’equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of theCompany’s management.  Our responsibilityis to express an opinion on these consolidated financial statements based onour audits.

We conducted ouraudits in accordance with the standards of the Public Company AccountingOversight Board (United States).  Thosestandards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of materialmisstatement.  An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements.  An audit alsoincludes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statementpresentation.  We believe that our auditsprovide a reasonable basis for our opinion.

In our opinion,the consolidated financial statements referred to above present fairly, in allmaterial respects, the financial position of Corgenix Medical Corporation andsubsidiaries as of June 30, 2007 and 2006, and the results of their operationsand their cash flows for the years then ended, in conformity with U.S.generally accepted accounting principles.

**Hein& Associates LLP**

Denver, ColoradoSeptember 12, 2007

52

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**CORGENIXMEDICAL CORPORATIONAND SUBSIDIARIES**Consolidated Balance Sheets
| **June 30, 2007 and 2006**                                                                                                                                                                           | ** ** | **2007**    | ** ** | **2006**   | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------|------------|------------|------------|
| **Assets**                                                                                                                                                                                                               |       |        |       |       |       |
| Current assets:                                                                                                                                                                                                          |       |        |       |       |       |
|                                                                                                                                                                                                                     |       |        |       |       |       |
| Cash and cash  equivalents                                                                                                                                                                                               |       | $           | 1,324,072  |       | $          | 3,118,494 |   |
| Accounts  receivable, less allowance for doubtful accounts of $94,097 and $13,097                                                                                                                                        |       | 1,225,677   |       | 1,362,768  |       |
| Inventories                                                                                                                                                                                                              |       | 2,558,456   |       | 1,635,549  |       |
| Prepaid expenses                                                                                                                                                                                                         |       | 99,767      |       | 64,596     |       |
| Total current  assets                                                                                                                                                                                                    |       | 5,207,972   |       | 6,181,407  |       |
|                                                                                                                                                                                                                     |       |        |       |       |       |
| Property and Equipment:                                                                                                                                                                                                  |       |        |       |       |       |
| Capitalized  software costs                                                                                                                                                                                              |       | 255,617     |       | 122,855    |       |
| Machinery and  laboratory equipment                                                                                                                                                                                      |       | 944,663     |       | 671,495    |       |
| Furniture,  fixtures and office equipment                                                                                                                                                                                |       | 1,808,698   |       | 585,399    |       |
|                                                                                                                                                                                                                     |       | 3,008,978   |       | 1,379,749  |       |
| Accumulated  depreciation and amortization                                                                                                                                                                               |       | (798,362    | )          | (1,113,131 | )          |
|                                                                                                                                                                                                                     |       |        |       |       |       |
| Net Property and  equipment                                                                                                                                                                                              |       | 2,210,616   |       | 266,618    |       |
|                                                                                                                                                                                                                     |       |        |       |       |       |
| Intangible assets:                                                                                                                                                                                                       |       |        |       |       |       |
| Patents, net of  accumulated amortization of $1,117,544 and $1,093,970 respectively                                                                                                                                      |       | —      |       | —     |       |
| License                                                                                                                                                                                                                  |       | 332,838     |       | 27,848     |       |
|                                                                                                                                                                                                                     |       | 332,838     |       | 27,848     |       |
| Other assets:                                                                                                                                                                                                            |       |        |       |       |       |
| Deferred  financing costs, net of amortization of $873,729 and $469,065                                                                                                                                                  |       | 743,070     |       | 1,147,563  |       |
| Due from officer                                                                                                                                                                                                         |       | 12,000      |       | 12,000     |       |
| Due from Biosafe                                                                                                                                                                                                         |       | 125,000     |       | 250,000    |       |
| Other                                                                                                                                                                                                                    |       | 257,180     |       | 328,180    |       |
| Total assets                                                                                                                                                                                                             |       | $           | 8,888,676  |       | $          | 8,213,616 |   |
|                                                                                                                                                                                                                     |       |        |       |       |       |
| **Liabilities  and Stockholders’ Equity**                                                                                                                                                                           |       |        |       |       |       |
| Current liabilities:                                                                                                                                                                                                     |       |        |       |       |       |
| Current portion  of notes payable, net of discount                                                                                                                                                                       |       | $           | 1,014,437  |       | $          | 770,151 |   |
| Current portion  of capital lease obligations                                                                                                                                                                            |       | 223,127     |       | 15,945     |       |
| Accounts payable                                                                                                                                                                                                         |       | 844,338     |       | 511,397    |       |
| Accrued payroll  and related liabilities                                                                                                                                                                                 |       | 271,994     |       | 270,542    |       |
| Accrued interest                                                                                                                                                                                                         |       | 26,741      |       | 43,914     |       |
| Deferred revenue                                                                                                                                                                                                         |       | 465,615     |       | —     |       |
| Accrued  liabilities                                                                                                                                                                                                     |       | 291,491     |       | 364,348    |       |
| Total current  liabilities                                                                                                                                                                                               |       | 3,137,743   |       | 1,976,297  |       |
| Notes payable, net of  discount, less current portion                                                                                                                                                                    |       | 1,000,051   |       | 1,290,776  |       |
| Capital lease  obligation, less current portion                                                                                                                                                                          |       | 442,775     |       | 5,130      |       |
| Deferred Facility Lease  Payable, excluding current portion                                                                                                                                                              |       | 1,065,227   |       | —     |       |
| Total  liabilities                                                                                                                                                                                                       |       | 5,645,796   |       | 3,272,203  |       |
| Commitments and  contingencies (notes 1 and 4)                                                                                                                                                                           |       |        |       |       |       |
|                                                                                                                                                                                                                     |       |        |       |       |       |
| Redeemable common  stock, 880,282 shares issued and outstanding, aggregate redemption value of  $450,000, net of unaccreted discount and issuance costs of $0                                                            |       | 250,000     |       | 250,000    |       |
|                                                                                                                                                                                                                     |       |        |       |       |       |
| Stockholders’ equity:                                                                                                                                                                                               |       |        |       |       |       |
| Convertible  Preferred stock, $0.001 par value, liquidation preference $464,730 and  $700,000, respectively. Authorized 5,000,000 shares, Issued and outstanding  1,327,800 and 2,000,000 in 2007 and 2006, respectively |       | 1,327,800   |       | 2,000,000  |       |
| Common stock,  $0.001 par value. Authorized 100,000,000 shares; Issued and outstanding  14,483,342 and 10,723,205 shares in 2007 and 2006, respectively                                                                  |       | 13,814      |       | 9,895      |       |
| Additional  paid-in capital                                                                                                                                                                                              |       | 13,444,483  |       | 12,060,729 |       |
| Accumulated deficit                                                                                                                                                                                                      |       | (11,808,129 | )          | (9,367,556 | )          |
| Accumulated other  comprehensive income (loss)                                                                                                                                                                           |       | 14,912      |       | (11,655    | )          |
| Total  stockholders’ equity                                                                                                                                                                                         |       | 2,992,880   |       | 4,691,413  |       |
|                                                                                                                                                                                                                     |       |        |       |       |       |
| Total liabilities and  stockholders’ equity                                                                                                                                                                         |       | $           | 8,888,676  |       | $          | 8,213,616 |   |

 

See accompanying notes toconsolidated financial statements.

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**CORGENIXMEDICAL CORPORATIONAND SUBSIDIARIES**Consolidated Statements of Operations and Comprehensive LossYears ended June 30, 2007 and 2006
| ** **                                                             | ** ** | **2007**   | ** ** | **2006**   | ** ** |
|------------------------------------------------------------------------|------------|------------|------------|------------|------------|
| Net sales                                                              |       | $          | 7,367,933  |       | $          | 6,635,779 |   |
| Cost of sales                                                          |       | 2,828,737  |       | 2,461,901  |       |
|                                                                   |       |       |       |       |       |
| Gross profit                                                           |       | 4,539,196  |       | 4,173,878  |       |
|                                                                   |       |       |       |       |       |
| Operating  expenses:                                                   |       |       |       |       |       |
| Selling and marketing                                                  |       | 2,065,573  |       | 1,626,165  |       |
| Research and development                                               |       | 812,531    |       | 574,021    |       |
| General and administrative                                             |       | 2,519,196  |       | 1,638,575  |       |
|                                                                   |       | 5,397,300  |       | 3,838,761  |       |
|                                                                   |       |       |       |       |       |
| Operating income (loss)                                                |       | (858,104   | )          | 335,117    |       |
|                                                                   |       |       |       |       |       |
| Other income  (expense)                                                |       |       |       |       |       |
| Other Income                                                           |       | 153,344    |       | 86,232     |       |
| Interest expense                                                       |       | (1,729,367 | )          | (1,991,866 | )          |
|                                                                   |       |       |       |       |       |
| Net loss before income taxes                                           |       | (2,434,127 | )          | (1,570,517 | )          |
| Income taxes                                                           |       | 6,446      |       | 15,895     |       |
| Net loss                                                               |       | (2,440,573 | )          | (1,586,412 | )          |
| Imputed  dividends on convertible preferred stock                      |       | —     |       | 2,280,000  |       |
| Net loss  attributable to common stockholders                          |       | $          | (2,440,573 | )          | $          | (3,866,412 | ) |
|                                                                   |       |       |       |       |       |
| Net loss per  share basic and diluted                                  |       | $          | (0.20      | )          | $          | (0.41 | ) |
|                                                                   |       |       |       |       |       |
| Weighted average  shares outstanding – basic and diluted          |       | 12,467,479 |       | 9,482,559  |       |
|                                                                   |       |       |       |       |       |
| Net loss                                                               |       | $          | (2,440,573 | )          | $          | (1,586,412 | ) |
|                                                                   |       |       |       |       |       |
| Other comprehensive  income (loss) – foreign currency translation |       | 26,567     |       | (1,408     | )          |
|                                                                   |       |       |       |       |       |
| Total  comprehensive loss                                              |       | $          | (2,414,006 | )          | $          | (1,585,004 | ) |

 

See accompanying notes toconsolidated financial statements.

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**CORGENIXMEDICAL CORPORATIONAND SUBSIDIARIES**Consolidated Statements of Stockholders’ EquityYears ended June 30, 2007 and 2006
| ** **                                                                             | ** ** | **Preferred**      | ** ** | ** **          | ** ** | ** **                     | ** ** | ** **          | ** ** | ** **     | ** ** | ** **      | ** ** | **Accumulated**   | ** ** | ** **             | ** ** |
|----------------------------------------------------------------------------------------|------------|--------------------|------------|---------------------|------------|--------------------------------|------------|---------------------|------------|----------------|------------|-----------------|------------|-------------------|------------|------------------------|------------|
| ** **                                                                             | ** ** | **Stock,**         | ** ** | **Preferred**       | ** ** | **Common**                     | ** ** | **Common**          | ** ** | **Additional** | ** ** | ** **      | ** ** | **Other**         | ** ** | **Total**              | ** ** |
| ** **                                                                             | ** ** | **Number of** | ** ** | **Stock**           | ** ** | **Stock,**                     | ** ** | **Stock,**          | ** ** | **Paid-in**    | ** ** | **Accumulated** | ** ** | **Comprehensive** | ** ** | **Stockholders’** | ** ** |
| ** **                                                                             | ** ** | **Shares**         | ** ** | **$0.001 par** | ** ** | **Number of Shares** | ** ** | **$0.001 par** | ** ** | **Capital**    | ** ** | **Deficit**     | ** ** | **Income**        | ** ** | **Equity**             | ** ** |
| **Balances  at July 1, 2005**                                                          | ** ** | **—**         |       | $                   | —     |                           | 8,172,435  |                | $          | 7,292          |       | $               | 7,966,172  |              | $          | (5,501,144             | )          | $ | (13,063 | ) | $ | 2,459,257 |   |
|                                                                                   | ** ** | ** **         |       |                |       |                           |       |                |       |           |       |            |       |              |       |                   |       |
| Issuance of  preferred stock for cash                                                  |       | 2,000,000          |       | 2,000,000           | ** ** | **—**                     |       | —              |       | 2,000,000      |       | (2,000,000      | )          | —            |       | 2,000,000              |       |
| Issuance of  common stock in exchange for services                                     | ** ** | **—**         |       | —              |       | 595,507                        |       | 596                 |       | 104,805        |       | —          |       | —            |       | 105,401                |       |
| Issuance of  warrants for financing costs                                              | ** ** | **—**         |       | —              |       |                           |       | —              |       | 360,950        |       | —          |       | —            |       | 360,950                |       |
| Issuance of  common stock in exchange for debt and interest                            | ** ** | **—**         |       | —              |       | 1,615,341                      |       | 1,614               |       | 482,989        |       | —          |       | —            |       | 484,603                |       |
| Beneficial  conversion feature of institutional convertible note Payable (note 3) | ** ** | **—**         |       | —              |       | —                         |       | —              |       | 1,363,635      |       | —          |       | —            |       | 1,363,635              |       |
| Issuance costs of  convertible preferred stock                                         | ** ** | **—**         |       | —              |       | —                         |       |                |       | (228,849       | )          | —          |       | —            |       | (228,849               | )          |
| Exercise of  warrants                                                                  | ** ** | **—**         |       | —              |       | 382,738                        |       | 383                 |       | 6,537          |       | —          |       | —            |       | 6,920                  |       |
| Exercise of stock  options                                                             | ** ** | **—**         |       | —              |       | 10,000                         |       | 10                  |       | 4,490          |       | —          |       | —            |       | 4,500                  |       |
| Cancellation of  redeemable stock upon note pay down                                   | ** ** | **—**         |       | —              |       | (52,816                        | )          | —              |       | —         |       | —          |       | —            |       | —                 |       |
| Foreign currency  translation                                                          | ** ** | **—**         |       | —              |       | —                         |       | —              |       | —         |       | —          |       | 1,408             |       | 1,408                  |       |
| Net loss                                                                               | ** ** | **—**         |       | —              |       | —                         |       | —              |       | —         |       | (1,586,412      | )          | —            |       | (1,586,412             | )          |
| Dividends on  convertible preferred stock                                              | ** ** | ** **         |       |                |       |                           |       |                |       |           |       | (280,000        | )          |              |       | (280,000               | )          |
| **Balances  at June 30, 2006**                                                         |       | 2,000,000          |       | 2,000,000           |       | 10,723,205                     |       | 9,895               |       | 12,060,729     |       | (9,367,556      | )          | (11,655           | )          | 4,691,413              |       |
|                                                                                   | ** ** | ** **         |       |                |       |                           |       |                |       |           |       |            |       |              |       |                   |       |
| Dividends on  convertible preferred stock                                              |       | 280,000            |       | 280,000             |       | —                         |       | —              |       | —         |       | —          |       | —            |       | 280,000                |       |
| Conversion of  preferred stock into common stock                                       |       | (952,200           | )          | (952,200            | )          | 2,720,571                      |       | 2,721               |       | 949,479        |       | —          |       | —            |       | —                 |       |
| Issuance of  common stock for services                                                 | ** ** | **—**         |       | —              |       | 240,587                        |       | 241                 |       | 46,057         |       | —          |       | —            |       | 46,298                 |       |
| Issuance of  common stock for license                                                  | ** ** | **—**         |       | —              |       | 214,285                        |       | 214                 |       | 22,629         |       | —          |       | —            |       | 22,843                 |       |
| Issuance of  common stock in exchange for debt and interest                            | ** ** | **—**         |       | —              |       | 743 142                        |       | 743                 |       | 222,201        |       | —          |       | —            |       | 222,944                |       |
| Compensation  expense recorded as a result of stock options issued                     | ** ** | **—**         |       | —              |       | —                         |       | —              |       | 143,388        |       | —          |       | —            |       | 143,388                |       |
| Cancellation of  redeemable stock upon note pay down                                   | ** ** | **—**         |       | —              |       | (158,448                       | )          | —              |       | —         |       | —          |       | —            |       | —                 |       |
| Foreign currency  translation                                                          | ** ** | **—**         |       | —              |       | —                         |       | —              |       | —         |       | —          |       | 26,567            |       | 26,567                 |       |
| Net loss                                                                               | ** ** | **—**         |       | —              |       | —                         |       | —              |       | —         |       | (2,440,573      | )          | —            |       | (2,440,573             | )          |
| **Balances at June 30, 2007**                                                          |       | 1,327,800          |       | $                   | 1,327,800  |                           | 14,483,342 |                | $          | 13,814         |       | $               | 13,444,483 |              | $          | (11,808,129            | )          | $ | 14,912 |   | $ | 2,992,880 |   |

 

See accompanying notes toconsolidated financial statements.

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**CORGENIXMEDICAL CORPORATIONAND SUBSIDIARIES**Consolidated Statements of Cash Flows
| **Years ended June 30, 2007 and 2006**               | ** ** | **2007**   | ** ** | **2006**  | ** ** |
|------------------------------------------------------------------------------------|------------|------------|------------|-----------|------------|
| Cash flows from  operating activities:                                             |       |       |       |      |       |
| Net loss                                                                           |       | $          | (2,440,573 | )         | $          | (1,586,412 | ) |
| Adjustments to reconcile net loss to net cash used  in operating activities:       |       |       |       |      |       |
| Depreciation and amortization                                                      |       | 362,326    |       | 108,474   |       |
| Accretion of discount on notes payable                                             |       | 841,896    |       | 1,155,870 |       |
| Amortization of deferred financing costs                                           |       | 404,664    |       | 429,625   |       |
| Equity instruments issued for services                                             |       | 46,298     |       | 105,401   |       |
| Common stock issued for interest                                                   |       | 52,156     |       | 136,601   |       |
| Compensation expense recorded for stock options  issued                            |       | 143,388    |       | —    |       |
| Gain on disposal of equipment                                                      |       | (6,729     | )          | —    |       |
| Bad debt expense                                                                   |       | 64,000     |       | 64,000    |       |
| Changes in operating assets and liabilities:                                       |       |       |       |      |       |
| Accounts receivable, net                                                           |       | 110,861    |       | (535,021  | )          |
| Inventories                                                                        |       | (918,079   | )          | (419,523  | )          |
| Prepaid expenses and other assets, net of warrants  issued for finance costs       |       | (365,880   | )          | (573,116  | )          |
| Accounts payable                                                                   |       | 300,360    |       | 54,101    |       |
| Accrued payroll and related liabilities                                            |       | 18,092     |       | 34,121    |       |
| Accrued interest and other liabilities                                             |       | 491,869    |       | 31,320    |       |
| Net cash used in operating activities                                              |       | (895,351   | )          | (994,559  | )          |
|                                                                               |       |       |       |      |       |
| Cash flows used  in investing activities:                                          |       |       |       |      |       |
| Proceeds from sale of equipment                                                    |       | 43,051     |       | —    |       |
| Additions to equipment                                                             |       | (299,055   | )          | (93,166   | )          |
| Net cash used in investing activities                                              |       | (256,004   | )          | (93,166   | )          |
|                                                                               |       |       |       |      |       |
| Cash flows from  financing activities:                                             |       |       |       |      |       |
| Proceeds from issuance of preferred stock, net of  financing costs                 |       | —     |       | 1,771,151 |       |
| Proceeds from issuance of common stock and exercise  of stock options and warrants |       | —     |       | 11,420    |       |
| Proceeds from issuance of notes payable, net of  original issue discount           |       | —     |       | 1,363,635 |       |
| Payments on notes payable                                                          |       | (467,547   | )          | (198,833  | )          |
| Payments on capital lease obligations                                              |       | (189,689   | )          | (24,049   | )          |
|                                                                               |       |       |       |      |       |
| Net cash provided (used) by financing activities                                   |       | (657,236   | )          | 2,923,324 |       |
|                                                                               |       |       |       |      |       |
| Net increase (decrease) in cash and cash equivalents                               |       | (1,808,591 | )          | 1,835,599 |       |
|                                                                               |       |       |       |      |       |
| Impact of  exchange rate changes on cash                                           |       | 14,169     |       | 930       |       |
|                                                                               |       |       |       |      |       |
| Cash and cash  equivalents at beginning of year                                    |       | 3,118,494  |       | 1,281,965 |       |
|                                                                               |       |       |       |      |       |
| Cash and cash  equivalents at end of year                                          |       | $          | 1,324,072  |      | $          | 3,118,494 |   |
| Supplemental  cash flow disclosures:                                               |       |       |       |      |       |
| Cash paid for  interest                                                            |       | $          | 456,475    |      | $          | 182,104 |   |
| Noncash  investing and financing activities –                                 |       |       |       |      |       |
| Equipment acquired under capital leases                                            |       | $          | 834,516    |      | $          | — |   |
| Issuance of stock for debt                                                         |       | $          | 170,788    |      | $          | 348,003 |   |
| Issuance of stock for license                                                      |       | $          | 22,843     |      | $          | — |   |
| Placement warrants issued in connection with debt  financing                       |       | $          | —     |      | $          | 360,969 |   |
| Conversion of redeemable common stock to note  payable                             |       | $          | —     |      | $          | 250,000 |   |
| Imputed dividends on convertible preferred stock                                   |       | $          | —     |      | $          | 2,280,000 |   |
| Landlord buildout of new facility                                                  |       | $          | 1,207,705  |      | $          | — |   |
| Stock paid for interest                                                            |       | $          | 52,156     |      | $          | — |   |
| Restricted asset  applied to note                                                  |       | $          | 250,000    |      | $          | — |   |

 

See accompanying notes toconsolidated financial statements.

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**CORGENIX MEDICAL CORPORATION AND SUBSIDIARIES**

Notesto Consolidated Financial Statements

June 30, 2007 and 2006

**(1)       Summary of Significant AccountingPolicies**

***(a)***                     Business and Basis of Presentation

Corgenix (formerly known asREAADS Medical Products) develops, manufactures and markets diagnostic productsfor the serologic diagnosis of certain vascular diseases and autoimmunedisorders using proprietary technology. The Company markets its products to hospitals and free-standinglaboratories worldwide through a network of sales representatives, distributorsand private label (OEM) agreements.  TheCompany’s corporate offices and manufacturing facility are located inWestminster, Colorado.

The consolidated financialstatements include the accounts of the Company and its wholly-ownedsubsidiaries, Corgenix, Inc. and Corgenix (UK) Limited (“Corgenix UK”).  Corgenix UK was established as a UnitedKingdom company during 1996 to market the Company’s products in Europe.  Transactions are generally denominated in U.S.dollars.

***(b)******                    ******Principles ofConsolidation***

The consolidated financial statementsinclude the financial statements of Corgenix Medical Corporation and its whollyowned subsidiaries.  Inter-companybalances and transactions have been eliminated in consolidation.

***(c)***                      Use of Estimates

The preparation of financialstatements in conformity with accounting principles generally accepted in theU.S. requires management to make estimates and assumptions that affect thereported amounts of assets and liabilities and disclosure of contingent assetsand liabilities at the date of the financial statements and the reportedamounts of revenue and expenses during the reporting period.  Actual results could differ significantlyfrom those estimates.

***(d)***                     Cash and Cash Equivalents

The Company considers allhighly liquid debt instruments purchased with maturities of three months orless at purchase to be cash equivalents.

***(e)***                      Trade Accounts Receivable

Trade accounts receivable arerecorded at the invoiced amount and do not bear interest.  The allowance for doubtful accounts is theCompany’s best estimate of the amount of probable credit losses in the Company’sexisting accounts receivable.  TheCompany determines the allowance based on historical write-off experience.  The Company reviews its allowance fordoubtful accounts monthly.  Past duebalances over 90 days and over a specified amount are reviewed individually forcollectibility. Account balances are charged off against the allowance afterall means of collection have been exhausted and the potential for recovery isconsidered remote.  The Company does nothave any off-balance-sheet credit exposure related to customers.

57

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***(f)***                        Inventories

Inventories are recorded at thelower of cost or market, using the first-in, first-out method.  A provision is recorded to reduce excess andobsolete inventories to their estimated net realizable value, whennecessary.  No such provision wasrecorded as of and for the two years ended June 30, 2007.  Components of inventories as of June 30 are asfollows:

|                 | ** ** | **2007**  | ** ** | **2006** | ** ** |
|-----------------|------------|-----------|------------|----------|------------|
| Raw materials   |       | $         | 412,883    |     | $          | 294,820 |   |
| Work-in-process |       | 1,355,174 |       | 582,091  |       |
| Finished goods  |       | 790,399   |       | 758,638  |       |
|            |       | $         | 2,558,456  |     | $          | 1,635,549 |   |

 

***(g)***                     Equipment and Software

Equipment and software arerecorded at cost.  Equipment undercapital leases is recorded initially at the present value of the minimum leasepayments.  No equipment was acquiredunder capital leases in 2006.  Equipmentacquired under capital leases amounted to $834,516 in fiscal 2007.  Depreciation and amortization expense, whichtotaled $362,326 and $108,474 for the years ended June 30, 2007 and 2006,respectively, is calculated primarily using the straight-line method overthe estimated useful lives of the respective assets which range from 3 to 7years.  Capitalized software costs arerelated to the Company’s web site development, which is being amortized overthree years, beginning in October 2002 and its accounting software, which isbeing amortized over five years, beginning in March 2007.

***(h)***                     Intangible Assets

Intangible assets consist ofpurchased patents and goodwill. Purchased patentsand licenses are amortizedusing the straight-line method over the shorter of 15 years or the remaininglife of the patent or license.  TheCompany adopted the provisions of Statement of Financial Accounting Standards(SFAS) No. 142, Goodwill and Other Intangible Assets (SFAS No. 142) on July 1,2002.  Pursuant to SFAS No. 142, goodwilland intangible assets acquired in a purchase business combination and determinedto have indefinite lives and licenses acquired with no definite term are notamortized, but instead are tested for impairment at least annually inaccordance with the provisions of this statement.  Identifiable intangibles with estimateduseful lives continue to be amortized over their respective estimated usefullives and reviewed for impairment in accordance with SFAS No. 144, Accountingfor Impairment or Disposal of Long Lived Assets.

On March 1, 2007, we executed an exclusive licenseagreement (the “License Agreement”) with Creative Clinical Concepts, Inc. (“CCC”).  The License Agreement provides that CCClicense to us certain products and assets related to determining theeffectiveness of aspirin and / or anti-platelet therapy (collectively, “AspirinEffectiveness Technology,” or the “Licensed Products”).  The Aspirin Effectiveness Technology includesUS trademark registration number 2,688,842, which includes the term “AspirinWorks”®and related designs.

The License Agreement imposes caps on the total amountof cash, common stock, and warrant payments from us to CCC from the date ofexecution through to and including the third anniversary payment.  Under that cap limitation, the totalanniversary payments will not exceed $200,000 in cash, $300,000 in value ofshares of common stock (as valued on the date of issue), and 300,000 warrantsto purchase shares of common stock at an exercise price of $0.35 per share.

The License Agreement also requires that, for allsales of the Licensed Products subsequent to the execution of the agreement, wepay CCC a quarterly royalty fee equal to seven percent of net sales of theLicensed Products 

58

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during the immediately preceding quarter.  The License Agreement’s caps on payments fromus to CCC do not apply to royalty payments.

***(i)***                        Advertising Costs

Advertising costs are expensedwhen incurred.  Advertising costsincluded in selling and marketing expenses totaled $63,775 and $57,801 infiscal 2007 and 2006, respectively.

***(j)***                        Income Taxes

Income taxes are accounted forunder the asset and liability method. Deferred tax assets and liabilities are recognized for net operatingloss and other credit carry forwards and the future tax consequencesattributable to differences between the financial statement carrying amounts ofexisting assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities aremeasured using enacted tax rates expected to apply to taxable income in theyears in which the tax effect of transactions are expected to be realized.  The effect on deferred tax assets andliabilities of a change in tax rates is recognized in the consolidatedstatements of operations in the period that includes the enactment date.

Deferred tax assets are reducedby a valuation allowance for the portion of such assets for which it is morelikely than not the amount will not be realized.  Deferred tax assets and liabilities areclassified as current or noncurrent based on the classification of theunderlying asset or liability giving rise to the temporary difference or theexpected date of utilization of the carry forwards.

***(k)***                     Revenue Recognition

Revenue is recognized uponshipment of products.  Sales discountsand allowances are recorded at the time product sales are recognized and areoffset against sales revenue. When revenue is received by a customer in advanceof shipment of products, in exchange for a discount, it is credited to deferredrevenue and taken into revenue upon eventual shipment of the products.

***(l)*****        *Research and Development***

Research and development costsand any costs associated with internally developed patents, formulas or otherproprietary technology are expensed as incurred.  Research and development expense for theyears ended June 30, 2007 and 2006 totaled $812,531 and $574,021 respectively.  Revenue from research and developmentcontracts represents amounts earned pursuant to agreements to perform researchand development activities for third parties and is recognized as earned underthe respective agreement.  Becauseresearch and development services are provided evenly over the contract period,revenue is recognized ratably over the contract period.  Research and development agreements in effectin 2007 and 2006 provided for fees to the Company based on time and materialsin exchange for performing specified research and development functions.  Contract research and development revenueswere $136,278 and $62,934 for the years ended June 30, 2007 and 2006,respectively.  Research and developmentcontracts are generally short term with options to extend, and can be cancelledunder specific circumstances.

***(m)***                  Long-Lived Assets

The Company reviews long-livedassets, including intangibles, for impairment whenever events or changes incircumstances indicate that the carrying amount of such assets may not berecoverable.  Events relating torecoverability may include significant unfavorable changes in businessconditions, recurring losses, or a forecasted inability to achieve break-evenoperating results over an extended period. The Company evaluates 

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the recoverability oflong-lived assets based upon forecasted undiscounted cash flows.  Should an impairment in value be indicated,the carrying value of intangible assets will be adjusted, based on estimates offuture discounted cash flows resulting from the use and ultimate disposition ofthe asset.

***(n)***                     Stock-Based Compensation

*Adoptionof SFAS 123(R)*

Effective July 1, 2006, theCompany adopted the provisions of Statement of Financial Accounting StandardNo. 123 (revised 2005), “*Share-Based Payment”*(SFAS123(R)”) using the modified prospective transition method.  In addition, the Securities and ExchangeCommission issued Staff Accounting Bulletin No. 107 “*Share-BasedPayment*(“SAB 107”) in March 2006, which provides supplemental SFAS123(R) application guidance based on the views of the SEC.  Under the modified prospective transitionmethod, compensation cost recognized in the fiscal year ended June 30, 2007,includes: (a) compensation cost for all share-based payments granted prior to,but not yet vested as of July 1, 2006, based on the grant date fair valueestimated in accordance with the original provisions of SFAS No. 123, and (b)compensation cost for all share-based payments granted beginning July 1, 2006,based on the grant date fair value estimated in accordance with the provisionsof SFAS 123(R).  In accordance with themodified prospective transition method, results for prior periods have not beenrestated.

The adoption of SFAS 123(R)resulted in stock compensation expense for the year ended June 30, 2007 of$143,388 charged to general and administrative expenses.  This expense increased basic and diluted lossper share by $0.01.  The Company did notrecognize a tax benefit from the stock compensation expense because the stockoptions are incentive stock options.

The Black-Scholesoption-pricing model was used to estimate the option fair values.  The option-pricing model requires a number ofassumptions, of which the most significant are expected stock price volatility,the expected pre-vesting forfeiture rate and the expected option term (theamount of time from the grant date until the options are exercised orexpire).  Expected volatility wascalculated based upon actual historical stock price movements over recentperiods equal to the expected option term. Expected pre-vesting forfeitures were estimated based on actualhistorical pre-vesting forfeitures over recent periods for the expected optionterm.  The expected option term wascalculated using the “simplified” method permitted by SAB 107.

*Pro-Forma StockCompensation Expense forFiscalYear  EndedJune  30, 2006*

For the fiscal year ended June 30, 2006,the Company applied the intrinsic value method of accounting for stock optionsas prescribed by APB 25.  Since alloptions granted to employees during the fiscal year ended June 30, 2006 had anexercise price equal to the closing market price of the underlying common stockon the grant date, no compensation expense was recognized.  If compensation expense had been recognizedbased on the estimated fair value of each option granted in accordance with theprovisions of SFAS 123 as amended by Statement of Financial Accounting Standard148, our net loss and net loss per share would have been inreased to thefollowing pro-forma amounts:
|                                                                                                                        | ** ** | **2006** | ** ** |
|------------------------------------------------------------------------------------------------------------------------|------------|----------|------------|
| Net loss  attributable to common shareholders as reported                                                              |       | $        | (3,866,412 | ) |
| Deduct total  stock-based employee compensation expense determined under fair-value method  for all awards, net of tax |       | (120,162 | )          |
| Pro forma net  loss                                                                                                    |       | $        | (3,986,574 | ) |
| Net loss per  share, basic and diluted as reported                                                                     |       | $        | (0.41      | ) |
| Net loss per share,  basic and diluted pro forma                                                                       |       | $        | (0.42      | ) |

 

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Pro-forma compensation expense under SFAS123, among other computational differences, does not consider potential pre-vestingforfeitures.  Because of thesedifferences, the pro-forma stock compensation expense presented above for theprior fiscal year ended June 30, 2006 under SFAS 123(R) are not directlycomparable.  In accordance with themodified prospective transition method of SFAS 123(R), the prior fiscal year’scomparative results have not been restated.

***(o)***                     Earnings Per Share

Basic earnings (loss) per shareis computed by dividing net loss attributable to common stockholders by theweighted average number of common shares outstanding.  Diluted earnings (loss) per share is computedby dividing net loss attributable to common stockholders by the weightedaverage number of common shares outstanding increased for potentially dilutivecommon shares outstanding during the period. The dilutive effect of stock options and their equivalents is calculatedusing the treasury stock method.  Optionsand warrants to purchase common stock totaling 34,236,238 and 32,923,526 sharesfor fiscal years 2007 and 2006 respectively, are not included in thecalculation of weighted average common shares-diluted below as their effectwould be to lower the net loss per share and thus be anti-dilutive.  Redeemable common stock is included in thecommon shares outstanding for purposes of calculating net income (loss) pershare.

|                                                               | ** ** | **2007**   | ** ** | **2006**  | ** ** |
|---------------------------------------------------------------|------------|------------|------------|-----------|------------|
|                                                          |       |       |       |      |       |
| Net loss  attributable to common stockholders                 |       | $          | (2,434,127 | )         | $          | (3,866,412 | ) |
|                                                          |       |       |       |      |       |
| Common and common equivalent shares outstanding:              |       |       |       |      |       |
| Historical common shares outstanding at beginning of  year    |       | 10,723,205 |       | 8,172,435 |       |
| Weighted average common equivalent shares issued  during year |       | 1,744,274  |       | 1,310,124 |       |
|                                                          |       |       |       |      |       |
| Weighted average common shares – basic and diluted       |       | 12,467,479 |       | 9,482,559 |       |
|                                                          |       |       |       |      |       |
| Net loss per share –  basic and diluted                  |       | $          | (.20       | )         | $          | (.41 | ) |

 

***(p)****                    ****Warrants***

The Company has recordedcontingent stock purchase warrants in accordance with Emerging Issues TaskForce Bulletin 96-18: *Accounting for EquityInstruments That Are Issued to Other Than Employees for Acquiring, or inConjunction with Selling, Goods or Services*.  At the grant date, the minimum number ofwarrants which may eventually be issued are recorded at their fair value, whichis adjusted in subsequent periods for revisions of the minimum number ofwarrants to be issued and the then current fair value of the warrants.

***(q)***                     Foreign Currency Transactions

The accounts of the Company’sforeign subsidiary are generally measured using the local currency as thefunctional currency.  For thoseoperations, assets and liabilities are translated into U.S. dollars atperiod-end exchange rates.  Income andexpense accounts are translated at average monthly exchange rates.  Adjustments resulting from such translationare accumulated in other comprehensive income as a separate component ofstockholders’ equity.

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***(r)******                ******Liquidity***

The Company has incurredoperating losses and negative cash flow from operations for most of itshistory. Losses incurred since its inception have aggregated $9,528,129, andthere can be no assurance that the Company will be able to generate positivecash flows to fund its operations in the future or to pursue its strategicobjectives.  Historically, the Companyhas financed its operations primarily through long-term debt and the sales ofcommon, redeemable common, and preferred stock. The Company has also financed operations through sales of diagnosticproducts and agreements with strategic partners.  Accounts receivable decreased 10.1% to$1,225,677, from $1,362,768 as of June 30, 2007, primarily as a result ofaccelerated collection procedures.

We have developed and are continuing to strive to implement anoperating plan intended to eventually achieve sustainable profitability andpositive cash flow from operations.  Keycomponents of this plan include accelerating revenue growth and the cash to bederived  from existing product lines aswell as new diagnostic products, expansion of our strategic alliances withother biotechnology and diagnostic companies, improving operating efficienciesto reduce cost of sales, thereby improving gross margins, and lowering overalloperating expenses.  Management has beensuccessful in increasing revenues in the current fiscal year ended June 30,2007 by $732154 or 11.5%., and is forecasting continued revenue growth for thefiscal year ended June 30, 2008. However, management has not yet achieved the necessary level ofoperating efficiencies to lower our cost of sales and operating expenses, andconsequently, we have scaled back expenditures, periodically delayed payments onaccounts payable, and, in November of 2006, entered into a twelve monthprincipal deferral agreement with our convertible debt holders in order tomaintain financial liquidity.  Thisdeferral was previously reported in filings to the SEC.  There are significant risks associated withthe operating plan and we might be forced to further modify the plan ifcircumstances change, in order to achieve the goals of sustained profitabilityand positive cash flow from operations.

Although the operating plan is intended to achieve sustainableprofitability and positive cash flow from operations, it is possible that wemay not be successful in our efforts. Even with our operating plan, we expect to continue incurring operating lossesfor the first three to six months of fiscal 2008, as it will take time for ourstrategic and operating initiatives to have a positive effect on our businessoperations and cash flow.  In view ofthis, in July 2007, we reported that we have entered into subscription andother agreements to complete a private placement with certain institutional andother accredited investors.  As of July31,we had sold $725,000 in interests in this placement.  *.*

Should any other significant negative events occur,our financial liquidity position will most likely be negatively impacted by ournot achieving positive cash flow from operations.  Given all of these circumstances, as notedabove, we have secured additional equity financing.  It is also possible that we may alsoexperience future defaults under the agreements with our convertible debtholders and/or redeemable common shareholder, e.g., for non payment of amountsdue, in which case they would be entitled to accelerate the amounts payable tothem.  We do not believe that anydefaults will occur in fiscal 2008. In order to help satisfy our workingcapital requirements we have raised additional funds through the sale of equitysecurities. In addition, if we are not able to achieve the hoped-for salesincreases, we may need to enter into collaborative agreements with thirdparties or evaluate the possible divestiture of product lines.  In addition, we may be required to reduce oursales and marketing activities, reduce the scope of or eliminate our researchand development programs, or relinquish rights to technologies or products thatwe might otherwise seek to develop or commercialize.

***(s)******           Recently IssuedAccounting Pronouncements***

*FAS 155 Disclosure, “Accounting for Certain Hybrid FinancialInstruments.” *In February 2006, the FASB issued Statement of Financial AccountingStandards No. 155 Accounting for Certain Hybrid Financial Instruments (“SFAS155”).  SFAS 155 amends FASB StatementsNo. 133, Accounting for Derivative Instruments and Hedging Activities (“Statement133”), and No. 140, Accounting for Transfers and Servicing Financial Assets andExtinguishments of Liabilities (“Statement 140”).  SFAS 155 resolves issues addressed inStatement 133 Implementation Issue No. D1, “Application of Statement 133 toBeneficial Interests in Securitized 

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Financial Assets.”  SFAS 155 permits fair value remeasurement forany hybrid financial instrument that contains an embedded derivative thatotherwise would require bifurcation, clarifies which interest-only strips andprincipal-only strips are not subject to the requirements of Statement 133, andestablishes a requirement to evaluate interests in securitized financial assetsto identify interests that are freestanding derivatives or that are hybridfinancial instruments that contain an embedded derivative requiring bifurcation.  It also clarifies that concentrations ofcredit risk in the form of subordination are not embedded derivatives andamends Statement 140 to eliminate the prohibition on a qualifyingspecial-purpose entity from holding a derivative financial instruments thatpertains to a beneficial interest other than another derivative financialinstrument.  This Statement is effectivefor all financial instruments acquired or issued after the beginning of anentity’s first fiscal year that begins after September 15, 2006.  The Company has not yet determined the impactof the adoption of SFAS 155 on our financial statements, if any.

*SFAS No. 156Disclosure*, Accounting for Servicing of FinancialAssets-An Amendment to FASB Statement No. 140”  In March 2006, the FASB issued Statementof Financial Accounting Standards No. 156, Accounting for Servicing ofFinancial Assets-an amendment to FASB Statement No. 140 (“SFAS 156”).  SFAS 156 requires that all separatelyrecognized servicing rights be initially measured at fair value, ifpracticable.  In addition, SFAS 156permits an entity to choose between two measurement methods (amortizationmethod or fair value measurement method) for each class of separatelyrecognized servicing assets and liabilities. SFAS 156 is effective for the Company as of January 1, 2007.  The Company does not believe that theadoption of SFAS 156 will have a material impact on its consolidatedfinancial statements.

*FASBInterpretation No. 48 Disclosure*, Accounting forUncertainty in Income Taxes-an interpretation of FASB Statement No. 109.  In July 2006, the FASB issued FinancialInterpretation No. 48, Accounting for Uncertainty in Income Taxes-aninterpretation of FASB Statement No. 109 (“FIN 48”).  FIN 48 clarifies the application of SFAS 109by defining a criterion that an individual tax position must meet for any partof the benefit of that position to be recognized in an enterprise’s financialstatements and also provides guidance on measurement, de-recognition,classification, interest and penalties, accounting in interim periods anddisclosure.  FIN 48 is effective for theCompany as of July 1, 2007.  At thistime, we have not completed our review and assessment of the impact of adoptionof FIN 48.

*FAS 157Fair Value Measurements. *InSeptember, 2006, the FASB issued Statement of Financial Accounting StandardsNo. 157 Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a framework and gives guidanceregarding the methods used for measuring fair value, and expands disclosuresabout fair value measurements.  SFAS 157is effective for financial statements issued for fiscal years beginning afterNovember 15, 2007, and interim periods within those fiscal years.  We are currently assessing the impact thatSFAS 157 will have on our results of operations and financial position.

*SFAS 158Employers’ Accounting for Defined Benefit Pension and Other PostretirementPlans.** *In September 2006, the FASB issuedStatement of Financial Accounting Standards No. 158 Employers’ Accountingfor Defined Benefit Pension and Other Postretirement Plans (“SFAS 158”).  SFAS 158 requires employers to fullyrecognize the obligations associated with single-employer defined benefitpension, retiree healthcare and other postretirement plans in their financialstatements.  The provisions of SFAS 158are effective as of the end of the fiscal year ending June 30, 2007.  The Company does not believe that theadoption of SFAS 158 will have a material impact on its consolidatedfinancial statements.

*SAB 108Considering the Effects of Prior Year Misstatements when QuantifyingMisstatements in Current Year Financial Statements.*  In September 2006, the SEC staff issued StaffAccounting Bulletin No. 108, Considering the Effects of Prior YearMisstatements when Quantifying Misstatements in Current Year FinancialStatements (“SAB 108”) . SAB 108 requires public companies to quantify errorsusing both a balance sheet and income statement approach and evaluate whethereither approach results in quantifying a misstatement as material, when allrelevant quantitative and qualitative factors are considered.  The guidance in SAB 108 is effective for 

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the fiscal yearending June 30, 2007.  We do notbelieve that the adoption of SAB 108 will have a material impact on our consolidatedfinancial statements.

SFAS 159 The FairValue Option for Financial Assets and Financial Liabilities – Including anAmendment of FASBStatement No. 115.  In November 2007, the FASB issued Statementof Financial Accounting Standards No. 159, The Fair Value Option for FinancialAssets and Financial Liabilities – including an Amendment of FASB Statement No.115 (“SFAS 159”).  SFAS 159 is effectivefor fiscal years beginning after November 15, 2007.  SFAS 159 permits an entity to choose tomeasure many financial instruments and certain other items at fair value atspecified election dates.  Subsequentunrealized gains and losses on items for which the fair value option has beenelected will be reported in earnings. The Company does not believe that the adoption of SFAS 159 will have amaterial impact on its consolidated financial statements.

**(2)**                     Notes Payable

Notes payable consist of thefollowing at June 30, 2007 and 2006:
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | ** ** | **June 30, 2007** | ** ** | **June 30, 2006** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------|------------|-----------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |       |                        |       |                        |       |
| Convertible term note payable to institutional  investors, net of discount of $223,838 with interest at the greater of 12%,  as adjusted by a stock trading formula, or prime plus 3% (11.25% as of June  30, 2007), interest only from June 1, 2006 through October 1, 2006 and, via a  note modification dated November 30, 2006, December 1, 2006 through November  1, 2007 and then due in monthly installments of $39,430.56 plus interest from  December 1, 2007 through November 1, 2009, collateralized by all assets of  the company and a partial guaranty by an officer of the Company |       | $                           | 720,992    |                        | $          | 695,740 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |       |                        |       |                        |       |
| Convertible term note payable to institutional  investors, net of discount of $496,504 with interest at the greater of 12%,  as adjusted by a stock trading formula, or prime plus 3% (11.25% as of June  30, 2007), interest only from December 28, 2006 through June, 2006 and, via a  note modification dated November 30, 2006, December 1, 2006 through November  1, 2007 and then due in monthly installments of $50,000 plus interest through  November 1, 2009, collateralized by all assets of the Company                                                                               |       | 703,496                     |       | 415,187                     |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |       |                        |       |                        |       |
| Term note payable to institutional investors, with  interest at the greater of 12% or prime plus 3% (12% as of June 30, 2007),  interest only payments commencing June 1, 2006 until May 19, 2008, collaterialized  by all assets of the Company                                                                                                                                                                                                                                                                                                                                                  |       | 500,000                     |       | 500,000                     |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |       |                        |       |                        |       |
| Restricted, non-amortizing term note payable to  institutional investors, with interest at prime (8.25% at June 30, 2007),  interest only payments commencing June 1, 2006 until the earlier of May 19,  2008 or the date the proceeds to the company are no longer restricted,  collateralized by all assets of the Company                                                                                                                                                                                                                                                                      |       | 0                           |       | 250,000                     |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |       |                        |       |                        |       |
| Note payable, unsecured, to redeemable common  stockholders, with interest at prime plus 2.0% (10.25% at June 30, 2007) due  in monthly installments with principal payments ranging from $5,000 to  $10,000 plus interest through August 2008                                                                                                                                                                                                                                                                                                                                                    |       | 90,000                      |       | 200,000                     |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |       |                        |       |                        |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |       | 2,014,488                   |       | 2,060,927                   |       |
| Current portion,  net of current portion of discount                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |       | (1,014,437                  | )          | (770,151                    | )          |
| Notes payable,  excluding current portion and net of long-term portion of discount                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |       | $                           | 1,000,051  |                        | $          | 1,290,776 |   |

 

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The convertible notes payable restrict thepayment of dividends on the Company’s common stock.

Aggregate maturities of notespayable by year, as of June 30, 2007, are as follows:

| Years ending June 30:           | ** ** | ** ** | ** ** |
|------------------------------------------------|------------|------------|------------|
| 2008                                           |       | $          | 1,202,017  |   |
| 2009                                           |       | 1,087,167  |       |
| 2010                                           |       | 445,646    |       |
| Less unaccreted  discount on convertible notes |       | (720,342   | )          |
| Net maturities                                 |       | $          | 2,014,488  |   |

 

**(3)**                     Equity

***(a)***               Employee Stock Purchase Plan

Effective January 1, 1999, theCompany adopted an Employee Stock Purchase Plan to provide eligible employeesan opportunity to purchase shares of its common stock through payrolldeductions, up to 10% of eligible compensation. The plan is registered under Section 423 of the Internal Revenue Code of1986.  Each quarter, participant accountbalances are used to purchase shares of stock at the lesser of  85% of the fair value of shares on the firstbusiness day (grant date) and last business day (exercise date) of eachquarter.  No right to purchase sharesshall be granted if, immediately after the grant, the employee would own stockaggregating 5% or more of the total combined voting power or value of all classesof stock.  A total of 200,000 commonshares have been registered with the Securities and Exchange Commission (SEC)for purchase under the plan.  In fiscal2006, 30,509 shares were issued under the plan. In fiscal 2006, 16,145 shares were issued under the plan.

There was no compensation expenserecognized for the 15% discount on shares purchased under this plan in fiscal2007. In fiscal 2006, the compensation expense recognized for the 15% discounton shares purchased under this plan amounted to $1,697.

***(b)***               Incentive Stock Option Plan

*Stock Options asof June 30, 2007*

The Company’s Amended and Restated 1999Incentive Stock Plan and the 2006 Incentive Compensation Plan (the “Plan”)provides for two separate components. The Stock Option Grant Program, administered by the Compensation Committee(the “Committee”) appointed by the Company’s Board of Directors, provides forthe grant of incentive and non-statutory stock options to purchase common stockto employees, directors or other independent advisors designated by theCommittee.  The Restricted Stock Programadministered by the Committee, provides for the issuance of Restricted StockAwards to employees, directors or other independent advisors designated by theCommittee.

The following table summarizes stockoptions outstanding and changes during the fiscal years ended June 30, 2006 and2007:

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| ** **                            | ** ** | **Outstanding Options** | ** ** |
|---------------------------------------|------------|------------------------------|------------|
| ** **                            | ** ** | **Number of  Shares**   | ** ** | **Weighted  Average  Exercise  Price** | ** ** | **Weighted  Average  Remaining  Contractual  Term (in  months)** | ** ** | **Aggregate  Intrinsic  Value** | ** ** |
| Options  outstanding at June 30, 2005 |       | 1,077,300                    |       | 0.41 |   | 59.74 |   | $ | — |   |
| Granted                               |       | 220,000                      |       | 0.41 |   | 77.30 |   |   |   |
| Exercised                             |       | (10,000                      | )          | 0.45 |   | 82.00 |   |   |   |
| Cancelled, expired or forfeited       |       | (25,000                      | )          | 0.30 |   | 74.00 |   |   |   |
| Options  outstanding at June 30, 2006 |       | 1,262,300                    |       | 0.40 |   | 59.74 |   | $ | — |   |
| Granted                               |       | 1,085,000                    |       | 0.37 |   | 74.90 |   |   |   |
| Exercised                             |       | —                       |       | — |   | — |   |   |   |
| Cancelled, expired or forfeited       |       | (41,700                      | )          | 0.98 |   | 12.25 |   |   |   |
| Options  outstanding at June 30, 2007 |       | 2,305,600                    |       | 0.38 |   | 64.38 |   | $ | — |   |
| Options exercisable at  June 30, 2007 |       | 1,172,267                    |       | 0.39 |   | 51.12 |   | $ | — |   |

 

The total intrinsic value, or the difference between the exercise priceand the market price on the date of exercise, of all options exercised duringthe twelve-month period ended June 30, 2007, was zero as no options wereexercised.  Consequently, no cash wasreceived, nor did the Company realize any tax deductions related to exercise ofstock options during the year.

Stock options outstanding and currently exercisable at June 30, 2007 areas follows:
| **Outstanding options**       | ** ** | **Exercisable options** | ** ** |
|------------------------------------|------------|------------------------------|------------|
| **Range of  exercise  price** | ** ** | **Number**                   | ** ** | **Weighted  average  remaining  contractual  life (months)** | ** ** | **Weighted  average  exercise  price** | ** ** | **Number** | ** ** | **Weighted  average  exercise  price** | ** ** |
|                               |       |                         |       |   |   |   |   |   |   |   |   |
| $0.625 — $1.375               |       | 83,500                       |       | 7.98 |   | 0.79 |   | 83,500 |   | 0.79 |   |
| $0.30 — $0.46                 |       | 2,222,100                    |       | 62.47 |   | 0.36 |   | 1,088,767 |   | 0.36 |   |
|                               |       |                         |       |   |   |   |   |   |   |   |   |
|                               |       | 2,305,600                    |       | 64.38 |   | $ | 0.38 |   | 1,172,267 |   | $ | 0.39 |   |
|                                    |            |                              |            |  |  |  |  |  |  |  |  |  |  |

 

Total estimated unrecognized compensation cost from unvested stockoptions as of June 30, 2007, was approximately $351,019, which is expected tobe recognized over a weighted average period of approximately 67.64 months.

The weighted average per share fair value range of stock options grantedduring the twelve-month periods ending June 30, 2007 and 2006 was $0.018-$0.33and $0.24-$0.36, respectively.  The fairvalue was estimated as of the grant date using the Black-Scholes option pricingmodel with the following assumptions:
| ** **               | ** ** | **Fiscal Year  Ended June 30,** | ** ** |
|--------------------------|------------|----------------------------------------------------------|------------|
| ** **               | ** ** | **2007**                                                 | ** ** | **2006** | ** ** |
| Volatility               |       | 111.5                                                    | %          | 111.5 | % |
| Expected option  term    |       | 7 years                                                  |       | 7 years |   |
| Risk-free  interest rate |       | 4.39                                                     | %          | 4.39 | % |
| Expected dividend yield  |       | 0                                                        | %          | 0 | % |

 

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In addition to the stock options discussed above, the Company recognizedshare-based compensation expense related to Restricted Stock awards of $3,333and $13,332 for the three months and fiscal year ended June 30, 2007.  No such share-based compensation expense wasrecognized for the quarter and  fiscalyear ended June 30, 2006.  The followingtable summarizes Non-vested Restricted Stock and the related activity as of andfor the fiscal year ended June 30, 2007:
|                              | ** ** | ** ** | ** ** | **Weighted**        | ** ** |
|------------------------------|------------|------------|------------|---------------------|------------|
| ** **                   | ** ** | ** ** | ** ** | **Average**         | ** ** |
| ** **                   | ** ** | ** ** | ** ** | **Grant-Date**      | ** ** |
| ** **                   | ** ** | **Shares** | ** ** | **Fair Value** | ** ** |
| Non-vested at  July 1, 2006  |       | 100,000    |       | $                   | 0.40       |   |
| Granted                      |       | —     |       | —              |       |
| Vested                       |       | 33,333     |       | 0.40                |       |
| Non-vested at June 30,  2007 |       | 66,667     |       | $                   | 0.40       |   |

 

As of June 30, 2007, there were also31,930,638 warrants issued to institutional investors, consultants, andemployees outstanding and exercisable ranging in prices from****$.23 to $.68 per****share with aweighted average exercise price of $.38 per share. ** **Of these warrants, 115,000 wereissued in fiscal 2007 and 20,457,140 were issued in fiscal 2006. Fair value wasdetermined using the Black Scholes option — pricing model with the followingassumptions: no expected dividends, volatility of 111.5% in fiscal 2007 and111.5% to 159.9% in fiscal 2006, risk-free interest rate of 4.39% in fiscal2007 and 3.30 % to 4.39% in fiscal 2006, and expected lives of seven years infiscal 2007 and 2006.

***(c)***             Preferred Stock

On December 28, 2005 the Company issued to Barron Partners,L.P., or Barron, a New York based private partnership, two million shares ofSeries A Convertible Preferred Stock. The shares of Series A Convertible Preferred Stock were sold at $1.00per share for gross proceeds of $2,000,000. Each share of preferred stock is convertible initially into 2.8571428571shares of the Company’s common stock.  Inaddition, Corgenix issued warrants to Barron to acquire up to an additional15,000,000 shares of Corgenix common stock, of which 5,000,000 are exercisableat $0.40 per share, 5,000,000 are exercisable at $0.50, and 5,000,000 areexercisable at $0.60.  The warrants areexercisable for five years from the date of issuance.

Theexercise prices of the warrants, and the conversion rate and price of theshares of preferred stock, are subject to adjustment upon the occurrence ofcertain specified events, including issuance of additional shares of commonstock or subdivision or combining of shares of common stock.

Theconversion right as contained in the preferred stock certificate ofdesignations and the exercise rights contained in the warrants provide that aholder will not convert an amount of preferred stock or exercise warrants tothe extent that the number of shares held by the holder, when added to thenumber of shares of common stock beneficially owned by such holder or issuableif the holder exercised one or more of its warrants immediately prior toconversion, would exceed 4.9% of the Company’s issued and outstanding commonstock.

Thetransaction with Barron also included a Registration Rights Agreement in whichthe Company agreed to file a registration statement on Form SB-2 covering theshares of common stock issuable upon the exercise of the warrants or theconversion of the preferred stock, which was declared effective on April 21,2006.

Atthe closing, the Company reimbursed Barron $15,000 for due diligence expenses.In addition, Ascendiant Securities, LLC acted as a financial advisor to theCompany.  As compensation for itsservices, the Company paid to Ascendiant a success fee equal to 8% of theinitial gross proceeds ($160,000), which fee was paid from escrow when thosefunds were released to Corgenix from escrow. If and when the Barron warrants are 

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exercised,then Corgenix would pay Ascendiant 8% of those gross proceeds. Three warrantswere issued to Ascendiant, each for the purchase of up to 552,380 shares, or 8%of the securities issued in the transaction, at $.40, $.50, and $.60 with netexercise rights.  The estimated fairvalue of the warrants upon issuance exceeded the $2,000,000 investment in theconvertible preferred stock.  Theestimated fair value of the warrants was calculated using the Black-Scholesoption-pricing model with the following assumptions: no expected dividendyield, 111.5% volatility, risk free interest rate of 4.39% and an expected lifeof five years.  Since the convertiblepreferred stock was immediately convertible, the entire value of the calculateddiscount (value of the warrants) was deemed to be imputed dividends on theconvertible preferred stock.

Asconstituted on December 28, 2005, the Company had 40 million shares ofcommon stock authorized, of which approximately 9.3 million shares were issuedand outstanding, and approximately 30.7 million were reserved for issuance toaccommodate the exercise or conversion of warrants, options, and convertibledebt that is currently outstanding.  Ifall of the shares of preferred stock and warrants issued to Barron in therecent financing were converted or exercised at that point, then approximately20.7 million shares of common stock would be needed to satisfy such activity.

Aspecial meeting of the shareholders of the Company was held on March 24,2006 to vote upon an amendment to the articles of incorporation increasingthe number of authorized shares of Common Stock from 40 million to 100 million(the “Share Increase Amendment”).  TheShare Increase Amendment was adopted by the Company’s shareholders at thespecial meeting.  As a result, the $2,000,000plus accrued interest was released to the Company, and the preferred stockcertificates were issued from escrow to Barron. In addition, because the Share Increase Amendment was adopted andapproved by the Company’s shareholders, the Company has reserved and keepsavailable shares of common stock for the purpose of enabling the Company toissue the shares of common stock underlying the preferred stock and warrantsissued to Barron.

Corgenixgranted to Barron the right to participate in any subsequent financings by theCompany on a pro rata basis at one hundred percent (100%) of the offeringprice; provided that any such right to participate shall be effective if andonly if the right of first refusal in favor of the Company’s currentconvertible debt investors has not been exercised.

The December 28, 2005 Convertible Preferredfinancing agreements with Barron Partners, L.P., or Barron, stated that if theCompany’s EBITDA for the audited fiscal year ended June 30, 2006, ascalculated based upon the audited financial statements filed with the Company’sForm 10-KSB filed with the Securities and Exchange Commission, was less than$1,150,000, then the Company must issue to Barron such number of additionalshares of preferred stock equal to 2,000,000 multiplied by the percentage bywhich EBITDA is less than $1,150,000, expressed as a positive number; providedthat in no event will the number of additional shares of preferred stock issueddue to this EBITDA adjustment exceed 14% of the number of shares of PreferredStock originally issued to Barron, or 280,000 shares. For example if EBITDA was$920,000 (20% decline) then the Company would issue to the Investor anadditional 14% (i.e., 280,000) shares of preferred stock; provided that at thetime Barron continues to hold all 2,000,000 shares of preferred stockoriginally issue on the Closing.  EBITDAis defined in the Preferred Stock Purchase Agreement as net income of theCompany, before interest, taxes, depreciation, amortization and one timecharges, including, but not limited to, loss on the extinguishment ofdebt.  EBITDA for the fiscal year endedJune 30, 2006 was $443,591, therefore, on October 4, 2006, the Companyissued 280,000 additional shares of preferred stock to Barron.

TheCompany agreed that a majority of the members of the board of directors, and amajority of the compensation and audit committees, would be qualifiedindependent directors, as defined by the NASD, within 90 days afterDecember 28, 2006. As of March 30, 2006, these requirements have beenfulfilled.

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**(4)**                     Commitments and Contingencies

***(a)***                     Leases

The Company is obligated undervarious noncancellable operating and capital leases primarily for its operatingfacilities and certain office equipment. The leases generally require the Company to pay related insurance costs,maintenance costs and taxes.  Rentexpense on operating leases is reflected on a straight-line basis over thelease term.  Future minimum lease paymentsunder noncancelable leases, with initial or remaining terms in excess of oneyear, as of June 30, 2007, are as follows:

|                                                  | ** ** | **Capital** | ** ** | **Operating** | ** ** |
|--------------------------------------------------|------------|-------------|------------|---------------|------------|
| ** **                                       | ** ** | **Leases**  | ** ** | **Leases**    | ** ** |
| Years ending  June 30:                           |       |        |       |          |       |
| 2008                                             |       | $           | 279,180    |          | $          | 444,227 |   |
| 2009                                             |       | 272,033     |       | 441,611       |       |
| 2010                                             |       | 173,805     |       | 442,079       |       |
| 2011                                             |       | 48,222      |       | 452,191       |       |
| 2012                                             |       | 8,779       |       | 417,760       |       |
| Thereafter                                       |       | —      |       | 150,035       |       |
| Total future  minimum lease Payments             |       | $           | 782,019    |          | $          | 2,347,903 |   |
|                                             |       |        |       |          |       |
| Less amounts  representing interest              |       | (116,117    | )          |          |       |
| Present value of  minimum capital lease payments |       | 665,902     |       |          |       |
| Less current  portion                            |       | (223,127    | )          |          |       |
| Capital lease  obligations less current portion  |       | $           | 442,775    |          |       |   |

 

Rent expense totaled $271,915and $248,880 for the years ended June 30, 2007 and 2006, respectively.

***(b)***                     Employment Agreements

The Company has employmentagreements with five key employees, all of whom are also stockholders.  In addition to salary and benefit provisions,these agreements include defined commitments by the Company should the employeesterminate their employment with or without cause.

***(c)***                      Redeemable Common Stock andWarrants

OnJuly 1, 2002, as part of the Medical & Biological Laboratories Co., Ltd.(MBL) Agreement, MBL purchased shares of the Company’s common stock for$500,000, which MBL can require the Company to repurchase at the same price inthe event that a previously existing distribution agreement with RhiGene, Inc.is terminated.  For no additionalconsideration, MBL was also issued warrants to purchase an additional 880,282 sharesof Common Stock at a price of $.568 per share, which is equal to an aggregateamount of $500,000.  These warrants weredue to expire on July 3, 2007 and may be exercised in whole or in part at anytime prior to their expiration.  Theestimated fair value of the warrant upon issuance was calculated as $401,809using the Black-Scholes option-pricing model with the followingassumptions:  no expected dividend yield,143% volatility, risk free interest rate of 4.2% and an expected life of fiveyears**. **Thegross proceeds of $500,000 were allocated $277,221 to redeemable common stockand $222,779 to the related warrants based on the relative fair values of therespective instruments to the fair value of the aggregate transaction.  Issuance costs and the discount attributed tothe redeemable common stock upon issuance were accreted over the 33-monthperiod to the first date whereupon the put option may be exercised, which wasthe expiration date of the distribution agreement between the Company andRhiGene, Inc. (March 31, 2006). Furthermore, pursuant to the agreement with MBL, as long as MBL holds atleast 50% of the common stock purchased under the MBL agreement, MBL must giveits written consent with respect to the payment of any dividend, the repurchaseof 

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anyof the Company’s equity securities, the liquidation or dissolution of theCompany or the amendment of any provision of the Company’s Articles ofIncorporation or Bylaws which would adversely affect the rights of MBL underthe stock purchase transaction documents. MBL was granted standard anti-dilution rights with respect to stockissuances not registered under the Securities Act.  MBL also received standard piggybackregistration rights along with certain demand registration rights.

On March 31, 2005, our distribution agreement with RhiGeneexpired, and the Company signed a new distribution and OEM Supply Agreementwith MBL International, Inc. (“MBLI”), a wholly owned subsidiary of MBL, whichgrants the Company non-exclusive rights to distribute MBL’s complete diagnosticline of autoimmune testing products in the U.S. and exclusive distributionrights to the OEM Label products worldwide excluding the U.S., Japan, Korea andTaiwan.  In addition, on August 1, 2005,the Company and MBL executed an Amendment to the Common Stock Purchase Agreementand Common Stock Purchase Warrant wherein one-half or 440,141of the originalredeemable shares are exchanged for a three-year promissory note payable withinterest at prime (8.25% as of June 30, 2007) plus two percent with paymentscommencing before September 1, 2005.  Theshares being exchanged for the promissory note will be returned to the Companyquarterly on a pro rata basis as payments are made on the promissory note.  As of June 30, 2007, 211,264 redeemableshares have been returned to the Company under this agreement.  The remaining 440,141 shares will beredeemable by the Company at $0.568 per share as of August 1, 2008 for anyshares still owned at that time by MBL and only to the extent that MBL has notrealized at least $250,000 in gross proceeds upon the sales of its redeemableshares in the open market for the time period August 1, 2006 through August 30,2008.  Finally, the warrants originallyissued to MBL to purchase 880,282 shares have been extended to August 31, 2008,and re-priced from $0.568 per share to $0.40 per share.

***(d)***                     Litigation

On January 4,2007, we filed a complaint in the U.S. District Court for the District ofColorado against Biosafe Laboratories, Inc., a corporation organized andexisting under the laws of the State of Illinois.  The complaint stated, among other things,that Corgenix and Biosafe were parties to a non-binding Letter of Intent datedSeptember 12, 2006 (the “LOI”), under which the companies explored thepossibility of a licensing arrangement between them for the sale of some ofBiosafe’s products.  Upon execution ofthis non-binding LOI, we paid to Biosafe a deposit of $250,000 (the “RefundableDeposit”).  The LOI specifically requiredBiosafe to refund $225,000 of that deposit to us in the event that a bindingagreement was not reached between the parties . A binding agreement was neverreached between the two companies and even though Biosafe was obligated torefund the Refundable Deposit to us and demand was made by us for saidRefundable Deposit, Biosafe refused to return the Refundable Deposit.  We brought suit against Biosafe, and soughtrelief in the form of, but not limited to, the refund of the RefundableDeposit, in addition to all damages sustained.

On February 20,2007, Biosafe disputed the above claims and filed a counterclaim against us,which stated, among other things, that we failed to go forward with theexecution of the binding agreement after the tems of said agreement were fullynegotiated and drafted and that the required funding had been secured.  It also claimed that we failed to disclose,in a timely fashion, that we needed Board of Director approval prior toexecution of the binding agreement, and overall did not deal with Biosafe ingood faith and with fair dealing. Biosafe’s counterclaim claimed damages of$1,000,000.

On March 12, 2007,we filed our reply to the above counterclaims denying the validity of all ofthe counter claims by Biosafe and again requesting that judgment be entered inour favor and that we be awarded our $225,000 deposit and any other costs.

On June 22, 2007,Corgenix and Biosafe executed a Settlement Agreement (the “Agreement”).  The Agreement brought to an end litigationbetween the Company and Biosafe relating to theRefundable Deposit.  The Agreement 

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required that Biosafe payus the sum of $125,000.00 no later than July 2, 2007.  This amount was in fact paid to us on July 2,2007.  The Agreement also required boththe Company and Biosafe to dismiss, with prejudice, all claims related to theLetter of Intent.  The Agreement providedthat each party bear its own costs and attorneys fees.

**(5)**                     Income Taxes

Income tax expense differedfrom the amounts computed by applying the U.S. federal income tax rate of 35%to pretax income as a result of the following:
| ** **                                            | ** ** | **2007** | ** ** | **2006** | ** ** |
|-------------------------------------------------------|------------|----------|------------|----------|------------|
| Computed  expected tax benefit                        |       | $        | (850,000   | )        | $          | (580,000 | ) |
| Reduction  (increase) in income taxes resulting from: |       |     |       |     |       |
| Permanent differences:                                |       |     |       |     |       |
| Amortization of debt discount                         |       | 295,000  |       | 405,000  |       |
| Deferred financing costs                              |       | 52,000   |       | 52,000   |       |
| Other                                                 |       | (32,000  | )          | 18,000   |       |
| Impact of foreign loss not deductible in the U.S      |       | —   |       | —   |       |
| Change in valuation allowance                         |       | 570,000  |       | 192,000  |       |
| Section 382 Limitation Freeup                         |       | (92,000  | )          | (92,000  | )          |
| Other                                                 |       | 57,000   |       | 5,000    |       |
|                                                  |       | $        | —     |     | $          | — |   |

Deferred tax assets related to the Company’soperati:ons are comprised of the following at June 30, 2007.
| Deferred tax assets  (liabilities):                                                |   |       |    |
|------------------------------------------------------------------------------------|--------|------------|---------|
| Current-                                                                           |   |       |    |
| Salary and other accruals                                                          |   | $          | 230,000 |   |
| Bad debt allowance                                                                 |   | 35,000     |    |
| Section 263A inventory capitalization                                              |   | 60,000     |    |
| Non-Current-                                                                       |   |       |    |
| Tax effect of net operating loss carry forward and R  & D credit carry forward |   | 1,840,000  |    |
| Long-lived assets                                                                  |   | 20,000     |    |
| Net deferred tax  assets                                                           |   | 2,185,000  |    |
| Less valuation  allowance                                                          |   | (2,185,000 | )       |
|                                                                               |   |       |    |
| Net deferred tax assets                                                            |   | $          | —  |   |

 

At June 30, 2007, the Companyhas a net operating loss carry forward for income tax purposes of approximately$3,600,000 expiring during the period from 2014 to 2027.  Research and experimentation tax credit carryforwards approximate $450,000.The utilization of net operating losses may alsobe limited due to a change in ownership under Internal Revenue Code Section382.

A valuation allowance in theamount of the deferred tax asset has been recorded due to management’sdetermination that it is not more likely than not that the tax assets will beutilized.

**(6)**                     Concentration of Credit Risk

The Company’s customers areprincipally located in the U.S., although there are a few significant foreigncustomers.  The Company performs periodiccredit evaluations of its customers’ financial condition but generally does notrequire collateral for receivables.  TheCompany’s largest customer, a company headquartered in the U.S., represented 

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approximately 16.0% and 5.7% ofsales in the years ended June 30, 2007 and 2006, respectively, andapproximately 14.4% and 14.8% of accounts receivable at June 30, 2007 and 2006,respectively.

**(7)**                     Reportable Segments

The Company has two segments ofbusiness, North American and international operations.  North American operations transacts all salesin North America (U.S., Canada and Mexico). International operations transacts all other sales.  The following table sets forth selectedfinancial data for these segments for the years ended June 30, 2007 and 2006.
| ** **                           | ** ** | **Year ended June 30, 2007** | ** ** |
|--------------------------------------|------------|--------------------------------------------------|------------|
| ** **                           | ** ** | **North America**                           | ** ** | **International** | ** ** | **Total** | ** ** |
|                                 |       |                                             |       |   |   |   |   |
| Net sales –  external customers |       | $                                                | 6,528,984  |   | $ | 1,922,388 |   | $ | 8,451,372 |   |
| Net sales –  intercompany       |       | (1,083,439                                       | )          | — |   | $ | (1,083,439 | ) |
| Total net sales                      |       | $                                                | 5,445,545  |   | $ | 1,922,388 |   | $ | 7,367,933 |   |
|                                 |       |                                             |       |   |   |   |   |
| Depreciation and  amortization       |       | $                                                | 358,755    |   | $ | 3,571 |   | $ | 362,326 |   |
|                                 |       |                                             |       |   |   |   |   |
| Interest expense                     |       | $                                                | 1,726,535  |   | $ | 2,832 |   | $ | 1,729,367 |   |
|                                 |       |                                             |       |   |   |   |   |
| Net income  (loss)                   |       | $                                                | (3,039,249 | ) | $ | 598,676 |   | $ | (2,440,573 | ) |
| Segment assets                       |       | $                                                | 8,156,103  |   | $ | 732,573 |   | $ | 8,888,676 |   |

 
| ** **                           | ** ** | **Year ended June 30, 2006** | ** ** |
|--------------------------------------|------------|--------------------------------------------------|------------|
| ** **                           | ** ** | **North America**                           | ** ** | **International** | ** ** | **Total** | ** ** |
| Net sales –  external customers |       | $                                                | 5,958,442  |   | $ | 1,688,280 |   | $ | 7,646,722 |   |
| Net sales –  intercompany       |       | (1,010,943                                       | )          | — |   | $ | (1,010,943 | ) |
| Total net sales                      |       | $                                                | 4,947,499  |   | $ | 1,688,280 |   | $ | 6,635,779 |   |
|                                 |       |                                             |       |   |   |   |   |
| Depreciation and  amortization       |       | $                                                | 105,390    |   | $ | 3,084 |   | $ | 108,474 |   |
|                                 |       |                                             |       |   |   |   |   |
| Interest expense                     |       | $                                                | 1,987,926  |   | $ | 3,940 |   | $ | 1,991,866 |   |
|                                 |       |                                             |       |   |   |   |   |
| Net income  (loss)                   |       | $                                                | (2,171,721 | ) | $ | 585,309 |   | $ | (1,586,412 | ) |
| Segment assets                       |       | $                                                | 7,625,303  |   | $ | 588,313 |   | $ | 8,213,616 |   |

 

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**SIGNATURES**

In accordance withthe requirements of the Securities Exchange Act of 1934, the registrant causedthis report to be signed on its behalf by the undersigned, thereunto dulyauthorized.
|                    | CORGENIX MEDICAL CORPORATION    |
|--------------------|---------------------------------|
|               |                            |
| September 14, 2007 |                            |   |
|               |                            |   |
|               | By:                             | /s/ William H. Critchfield |   |   | By: | /s/ Douglass T. Simpson |   |
|               | William H. Critchfield          |   | Douglass T. Simpson |
|               | Senior Vice President and Chief |   | President and Chief Executive Officer |
|               | Financial Officer               |   |   |   |   |
|               |                            |   |   |   |
|               |                            | By: | /s/ Luis R. Lopez |   |
|               |                            | Luis R. Lopez |
|               |                            | Chief Medical Officer and Chairman of   the Board |
|               |                            |   |   |   |
|               |                            | By: | /s/ Robert Tutag |   |
|               |                            | Robert Tutag |
|               |                            | Director |
|               |                            |   |   |   |
|               |                            | By: | /s/ Charles H. Scoggin |   |
|               |                            | Charles H. Scoggin |
|               |                            | Director |
|               |                            |   |   |   |
|               |                            | By: | /s/ Larry G. Rau |   |
|               |                            | Larry G. Rau |
|               |                            | Director |
|               |                            |   |   |   |
|               |                            | By: | /s/ Dennis Walczewski |   |
|               |                            | Dennis Walczewski |
|               |                            | Director |
|               |                            |   |   |   |
|               |                            | By: | /s/ C. David Kikumoto |   |
|               |                            | C. David Kikumoto |   |
|               |                            | Director |   |
|                    |                                 |  |  |  |  |  |  |

 

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