----

----

|   | Delaware(State or other jurisdictionof incorporation or organization) |   | 59-2058100(I.R.S.  EmployerIdentification No.) |   |
|--------|-----------------------------------------------------------------------|--------|----------------------------------------------------------|--------|

----

| Part I. Financial Information: | PAGE                                                                                                           |
|--------------------------------|----------------------------------------------------------------------------------------------------------------|
|                           |                                                                                                           |   |   |
|                           | ITEM 1.  Financial Statements:                                                                       |   |
|                           | a.                                                                                                             | Consolidated Balance Sheets, March 31, 2010 (unaudited) and December 31, 2009 | 3 |
|                           |                                                                                                           |   |   |
|                           | b.                                                                                                             | Consolidated Statements of Operations for the three months ended March 31, 2010 and 2009 (unaudited) | 4 |
|                           |                                                                                                           |   |   |
|                           | c.                                                                                                             | Consolidated Statement of Stockholders’ Equity for the three months ended March 31, 2010 (unaudited) | 5 |
|                           |                                                                                                           |   |   |
|                           | d.                                                                                                             | Consolidated Statements of Cash Flows for the three months ended March 31, 2010 and 2009 (unaudited) | 6 |
|                           |                                                                                                           |   |   |
|                           | e.                                                                                                             | Notes to Consolidated Financial Statements (unaudited) | 7 |
|                           |                                                                                                           |   |   |
|                           | ITEM 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26 |
|                           |                                                                                                           |   |   |
|                           | ITEM 3.  Quantitative and Qualitative Disclosure about Market Risk                                   | 42 |
|                           |                                                                                                           |   |   |
|                           | ITEM 4.  Controls and Procedures                                                                     | 43 |
|                           |                                                                                                           |   |   |
| Part II. Other Information:    |                                                                                                           |
|                           |                                                                                                           |   |   |
|                           | ITEM 1.  Legal Proceedings                                                                           | 43 |
|                           |                                                                                                           |   |   |
|                           | ITEM 4.   Removed and Reserved                                                                  | 44 |
|                           |                                                                                                           |   |   |
|                           | ITEM 5.   Other Information                                                                     | 44 |
|                           |                                                                                                           |   |   |
|                           | ITEM 6.  Exhibits                                                                                    | 44 |
|                           |                                                                                                           |   |   |
|                           |                                                                                                           | Signatures | 45 |
|                           |                                                                                                           |   |   |
|                           |                                                                                                           | Certifications | E-31.1 |

----

PART 

ITEM 

CONSOLIDATED 

|                                                                                                                                                                               |   | March 31, 2010 |            |   | December 31, 2009 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|-----------------|--------|-------------------|--------|
|                                                                                                                                                                               |   | (Unaudited)    |            |   |              |   |
| ASSETS                                                                                                                                                                             |   |           |            |   |              |   |
|                                                                                                                                                                               |   |           |            |   |              |   |
| Current assets:                                                                                                                                                                    |   |           |            |   |              |   |
| Cash and cash equivalents                                                                                                                                                          |   | $              | 2,024,231       |   |              | $      | 2,116,788 |   |
| Restricted cash                                                                                                                                                                    |   |           | 78,000          |   |              |   | 78,000 |   |
| Accounts receivable, net of allowance for doubtful accounts of $430,800 and $400,000, respectively                                                                                 |   |           |  3,177,894 |   |              |   | 3,998,785 |   |
| Inventories, net                                                                                                                                                                   |   |           | 6,675,784       |   |              |   | 7,002,850 |   |
| Prepaid expenses and other current assets                                                                                                                                          |   |           | 301,079         |   |              |   | 345,673 |   |
| Total current assets                                                                                                                                                               |   |           | 12,256,988      |   |              |   | 13,542,096 |   |
|                                                                                                                                                                               |   |           |            |   |              |   |   |   |
| Property and equipment, net                                                                                                                                                        |   |           | 9,167,095       |   |              |   | 9,293,482 |   |
| Patents and licensed technologies, net                                                                                                                                             |   |           | 7,514,556       |   |              |   | 7,751,662 |   |
| Goodwill                                                                                                                                                                           |   |           | 19,569,200      |   |              |   | 19,472,686 |   |
| Other intangible assets, net                                                                                                                                                       |   |           | 1,883,355       |   |              |   | 2,020,625 |   |
| Other assets                                                                                                                                                                       |   |           | 1,551,437       |   |              |   | 1,087,595 |   |
| Total assets                                                                                                                                                                       |   | $              | 51,942,631      |   |              | $      | 53,168,146 |   |
|                                                                                                                                                                               |   |           |            |   |              |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                               |   |           |            |   |              |   |   |   |
|                                                                                                                                                                               |   |           |            |   |              |   |   |   |
| Current liabilities:                                                                                                                                                               |   |           |            |   |              |   |   |   |
| Current portion of notes payable                                                                                                                                                   |   | $              | 31,226          |   |              | $      | 129,696 |   |
| Current portion of long-term debt                                                                                                                                                  |   |           | 2,570,524       |   |              |   | 3,179,469 |   |
| Accounts payable                                                                                                                                                                   |   |           | 4,393,886       |   |              |   | 4,171,707 |   |
| Accrued compensation and related expenses                                                                                                                                          |   |           | 714,942         |   |              |   | 1,133,346 |   |
| Accrued interest payable                                                                                                                                                           |   |           | 80,167          |   |              |   | 499,200 |   |
| Other accrued liabilities                                                                                                                                                          |   |           | 1,272,048       |   |              |   | 1,601,414 |   |
| Deferred revenues                                                                                                                                                                  |   |           | 772,437         |   |              |   | 612,757 |   |
| Total current liabilities                                                                                                                                                          |   |           | 9,835,230       |   |              |   | 11,327,589 |   |
| Long-term liabilities:                                                                                                                                                             |   |           |            |   |              |   |   |   |
| Notes payable                                                                                                                                                                      |   |           | 38,494          |   |              |   | 46,477 |   |
| Long-term debt                                                                                                                                                                     |   |           | 2,165,541       |   |              |   | 760,783 |   |
| Convertible debt                                                                                                                                                                   |   |           | 18,270,382      |   |              |   | 17,369,943 |   |
| Warrants related to convertible debt                                                                                                                                               |   |           | 1,672,906       |   |              |   | 741,525 |   |
| Total liabilities                                                                                                                                                                  |   |           | 31,982,553      |   |              |   | 30,246,317 |   |
|                                                                                                                                                                               |   |           |            |   |              |   |   |   |
| Stockholders’ equity:                                                                                                                                                        |   |           |            |   |              |   |   |   |
| Common stock, $.01 par value, 35,000,000 shares authorized; 2,238,637  and 2,238,153 shares issued and outstanding at March 31, 2010 and December 31, 2009, respectively |   |           |  22,386    |   |              |   | 22,382 |   |
| Additional paid-in capital                                                                                                                                                         |   |           | 139,618,530     |   |              |   | 138,639,143 |   |
| Accumulated deficit                                                                                                                                                                |   |           | (119,756,714    | )      |              |   | (115,840,931 | ) |
| Accumulated other comprehensive income                                                                                                                                             |   |           | 75,876          |   |              |   | 101,235 |   |
| Total stockholders’ equity                                                                                                                                                   |   |           | 19,960,078      |   |              |   | 22,921,829 |   |
| Total liabilities and stockholders’ equity                                                                                                                                   |   | $              | 51,942,631      |   |              | $      | 53,168,146 |   |

----

CONSOLIDATED 

|                                                          |   | For the Three Months Ended March 31, |        |
|---------------------------------------------------------------|--------|--------------------------------------|-------------|
|                                                          |   | 2010                                 |        |   | 2009 |   |
|                                                          |   |                                 |        |   |   |   |
| Revenues:                                                     |   |                                 |        |   |   |   |
| Product sales                                                 |   | $                                    | 4,157,328   |   |   | $ | 5,197,850 |   |
| Services                                                      |   |                                 | 2,529,600   |   |   |   | 2,300,492 |   |
|                                                          |   |                                 | 6,686,928   |   |   |   | 7,498,342 |   |
|                                                          |   |                                 |        |   |   |   |   |   |
| Cost of revenues:                                             |   |                                 |        |   |   |   |   |   |
| Product cost of revenues                                      |   |                                 | 2,199,610   |   |   |   | 2,459,348 |   |
| Services cost of revenues                                     |   |                                 | 1,394,727   |   |   |   | 1,338,252 |   |
|                                                          |   |                                 | 3,594,337   |   |   |   | 3,797,600 |   |
|                                                          |   |                                 |        |   |   |   |   |   |
| Gross profit                                                  |   |                                 | 3,092,591   |   |   |   | 3,700,742 |   |
|                                                          |   |                                 |        |   |   |   |   |   |
| Operating expenses:                                           |   |                                 |        |   |   |   |   |   |
| Selling and marketing                                         |   |                                 | 3,131,934   |   |   |   | 3,900,751 |   |
| General and administrative                                    |   |                                 | 1,951,939   |   |   |   | 2,799,180 |   |
| Engineering and product development                           |   |                                 | 339,277     |   |   |   | 201,697 |   |
|                                                          |   |                                 | 5,423,150   |   |   |   | 6,901,628 |   |
|                                                          |   |                                 |        |   |   |   |   |   |
| Operating loss from continuing operations                     |   |                                 | (2,330,559  | ) |   |   | (3,200,886 | ) |
|                                                          |   |                                 |        |   |   |   |   |   |
| Other income (loss):                                          |   |                                 |        |   |   |   |   |   |
| Interest expense, net                                         |   |                                 | (653,843    | ) |   |   | (402,523 | ) |
| Change in fair value of warrants                              |   |                                 | (931,381    | ) |   |   | 91,222 |   |
|                                                          |   |                                 |        |   |   |   |   |   |
| Net loss                                                      |   | $                                    | ( 3,915,783 | ) |   | $ | ( 3,512,187 | ) |
|                                                          |   |                                 |        |   |   |   |   |   |
|                                                          |   |                                 |        |   |   |   |   |   |
| Basic and diluted net loss per share                          |   | $                                    | (1.75       | ) |   | $ | (2.34 | ) |
|                                                          |   |                                 |        |   |   |   |   |   |
| Shares used in computing basic and diluted net loss per share |   |                                 | 2,238,456   |   |   |   | 1,500,835 |   |

----

CONSOLIDATED 

|                                                          |   |         |      |   |       |   |   |        |   |   | Accumulated   |   |   |   |         |
|---------------------------------------------------------------|--------|--------------|-----------|--------|------------|--------|--------|-------------|--------|--------|---------------|--------|--------|--------|--------------|
|                                                          |   |         |      |   | Additional |   |   |        |   |   | Other         |   |   |   |         |
|                                                          |   | Common Stock |      |   | Paid-In    |   |   | Accumulated |   |   | Comprehensive |   |   |   |         |
|                                                          |   | Shares       |      |   | Amount     |   |   | Capital     |   |   | Deficit       |   |   | Income |         |   | Total |   |
| BALANCE, JANUARY 1, 2010                                      |   |         | 2,238,157 |   |       | $      | 22,382 |        |   | $      | 138,639,143   |   |   | $      | (115,840,931 | ) |   | $ | 101,235 |   |   | $ | 22,921,829 |   |
| Issuance of warrants related to debt financing                |   |         | -         |   |       |   | -      |        |   |   | 769,754       |   |   |   | -            |   |   |   | - |   |   |   | 769,754 |   |
| Stock options issued to consultants for services              |   |         | -         |   |       |   | -      |        |   |   | 73,765        |   |   |   | -            |   |   |   | - |   |   |   | 73,765 |   |
| Amortization of expense for restricted stock                  |   |         | -         |   |       |   | -      |        |   |   | 54,081        |   |   |   | -            |   |   |   | - |   |   |   | 54,081 |   |
| Change in cumulative translation adjustments                  |   |         | -         |   |       |   | -      |        |   |   | -             |   |   |   | -            |   |   |   | (25,359 | ) |   |   | (25,359 | ) |
| Stock-based compensation expense related to employee options  |   |         | -         |   |       |   | -      |        |   |   | 81,791        |   |   |   | -            |   |   |   | - |   |   |   | 81,791 |   |
| Round up for fractional shares due to the reverse stock split |   |         |  480 |   |       |   | 4      |        |   |   | (4            | )      |   |   | -            |   |   |   | - |   |   |   | - |   |
| Net loss for the three months ended March 31, 2010            |   |         | -         |   |       |   | -      |        |   |   | -             |   |   |   | (3,915,783   | ) |   |   | - |   |   |   | (3,915,783 | ) |
| BALANCE, MARCH 31, 2010                                       |   |         | 2,238,637 |   |       | $      | 22,386 |        |   | $      | 139,618,530   |   |   | $      | (119,756,714 | ) |   | $ | 75,876 |   |   | $ | 19,960,078 |   |

----

CONSOLIDATED 

|                                                                              |   | For the Three Months EndedMarch 31, |          |
|-----------------------------------------------------------------------------------|--------|-------------------------------------|---------------|
|                                                                              |   | 2010                                |          |   | 2009 |   |
| Cash Flows From Operating Activities:                                             |   |                                |          |   |   |   |
| Net loss                                                                          |   | $                                   | ( 3,915,783   | ) |   | $ | ( 3,512,187 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities:       |   |                                |          |   |   |   |   |   |
| Depreciation and amortization                                                     |   |                                | 1,157,999     |   |   |   | 995,220 |   |
| Stock options issued to consultants for services                                  |   |                                | 73,765        |   |   |   | 17,419 |   |
| Stock-based compensation expense related to employee options and restricted stock |   |                                |  135,872 |   |   |   |  275,255 |   |
| Provision for bad debts                                                           |   |                                | 53,205        |   |   |   | 26,843 |   |
| Change in estimated fair value of warrant liability                               |   |                                | 931,381       |   |   |   | (91,222 | ) |
|                                                                              |   |                                |          |   |   |   |   |   |
| Changes in operating assets and liabilities:                                      |   |                                |          |   |   |   |   |   |
| Accounts receivable                                                               |   |                                | 767,686       |   |   |   | 559,672 |   |
| Inventories                                                                       |   |                                | 383,335       |   |   |   | (554,449 | ) |
| Prepaid expenses and other assets                                                 |   |                                | 97,631        |   |   |   | (279,526 | ) |
| Accounts payable                                                                  |   |                                | 222,179       |   |   |   | (226,854 | ) |
| Accrued compensation and related expenses                                         |   |                                | (418,404      | ) |   |   | (33,151 | ) |
| Other accrued liabilities                                                         |   |                                | (329,368      | ) |   |   | 89,897 |   |
| Interest accrued on convertible debt                                              |   |                                | 407,643       |   |   |   | - |   |
| Deferred revenues                                                                 |   |                                | 159,680       |   |   |   | 94,328 |   |
| Net cash used in operating activities                                             |   |                                | (273,179      | ) |   |   | (2,638,755 | ) |
|                                                                              |   |                                |          |   |   |   |   |   |
| Cash Flows From Investing Activities:                                             |   |                                |          |   |   |   |   |   |
| Purchases of property and equipment                                               |   |                                | (3,000        | ) |   |   | (29,756 | ) |
| Lasers placed into service                                                        |   |                                | (708,483      | ) |   |   | (889,444 | ) |
| Acquisition costs, net of cash received                                           |   |                                | (96,514       | ) |   |   | (12,578,022 | ) |
| Net cash used in investing activities                                             |   |                                | (807,997      | ) |   |   | (13,497,222 | ) |
|                                                                              |   |                                |          |   |   |   |   |   |
| Cash Flows From Financing Activities:                                             |   |                                |          |   |   |   |   |   |
| Registration costs                                                                |   |                                | (433,215      | ) |   |   | (35,624 | ) |
| Payments on notes payable                                                         |   |                                | (106,452      | ) |   |   | (7,082 | ) |
| Proceeds from term debt                                                           |   |                                | 2,500,000     |   |   |   | - |   |
| Repayments on line of credit                                                      |   |                                | (946,652      | ) |   |   | (1,326,314 | ) |
| Proceeds from convertible debt                                                    |   |                                | -             |   |   |   | 18,000,000 |   |
| Net cash provided by financing activities                                         |   |                                | 1,013,681     |   |   |   | 16,630,980 |   |
| Effect of exchange rate changes on cash                                           |   |                                | (25,062       | ) |   |   | 25,710 |   |
| Net (decrease) increase in cash and cash equivalents                              |   |                                | (92,557       | ) |   |   | 520,713 |   |
|                                                                              |   |                                |          |   |   |   |   |   |
| Cash and cash equivalents, beginning of period                                    |   |                                | 2,116,788     |   |   |   | 3,658,607 |   |
|                                                                              |   |                                |          |   |   |   |   |   |
| Cash and cash equivalents, end of period                                          |   | $                                   | 2,024,231     |   |   | $ | 4,179,320 |   |

----

NOTES 

|   | Note 1 |
|--------|--------|

|   | Basis of Presentation: |
|--------|------------------------|

----

| ·   | The Company has combined the aggregate outstanding obligations under the Convertible Notes into two convertible notes. Each note matures on February 27, 2014 and is identical to the original form of convertible note except as noted below; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The larger note has a principal amount of $16,746,270. The interest rate of this note was increased from 8% to 10%. The incremental 2% increase in the interest rate may be paid in cash, and may not be paid in convertible PIK notes unless and until our stockholders vote to approve payment in the form of a convertible PIK note; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The smaller note has a principal amount of $2,800,406. The conversion price of this note was reduced to $11.26 and the down-round anti-dilution adjustment to the conversion price was removed. The interest rate of this note was increased from 8% to 10%. The full amount of the accrued interest remains payable in cash or convertible PIK notes. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The collateral securing the Convertible Notes was expanded by adding a first-priority lien against all of the Company’s assets other than the assets pledged with first-priority liens to CIT Healthcare and to Clutterbuck Funds. When assets are released from the lien of CIT Healthcare, such assets will become subject to the first-priority lien of Clutterbuck Funds and a second-priority lien of the Holder. Finally, when assets are released from the lien of Clutterbuck Funds, such assets will become subject to the first-priority lien of the Holder. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Three of the Company’s subsidiaries (ProCyte Corporation, Photo Therapeutics, Inc. and SLT Technology, Inc.) have guaranteed the Company’s obligations under the Convertible Notes. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | • | Level 1 - unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date.                                       |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | Level 2 - inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. |
|   | • | Level 3 - unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date.                                  |

----

|                                       |   | Fair Value as of March 31, 2010    |      |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
|--------------------------------------------|--------|------------------------------------|-----------|--------|---------------------------------------------------------------|--------|--------|----------------------------------------------|--------|--------|------------------------------------------|--------|
| Liabilities:                               |   |                               |      |   |                                                          |   |   |                                         |   |   |                                     |   |
| Derivative financial instruments (Note 12) |   | $                                  | 1,672,906 |   |                                                          | $      | -      |                                         |   | $      | -                                        |   |   | $ | 1,672,906 |   |
|                                       |   |                               |      |   |                                                          |   |   |                                         |   |   |                                     |   |   |   |   |   |
|                                       |   | Fair Value as of December 31, 2009 |      |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
| Liabilities:                               |   |                               |      |   |                                                          |   |   |                                         |   |   |                                     |   |   |   |   |   |
| Derivative financial instruments (Note 12) |   | $                                  | 741,525   |   |                                                          | $      | -      |                                         |   | $      | -                                        |   |   | $ | 741,525 |   |

----

----

|                                  |   | Three Months Ended March 31, 2010(unaudited) |    |
|---------------------------------------|--------|----------------------------------------------|---------|
| Accrual at beginning of period        |   | $                                            | 773,628 |   |
| Additions charged to warranty expense |   |                                         | 37,378  |   |
| Expiring warranties                   |   |                                         | (53,313 | ) |
| Claims satisfied                      |   |                                         | (66,601 | ) |
| Accrual at end of period              |   | $                                            | 691,092 |   |

----

|                                        |   | Three Months Ended March 31,(unaudited) |       |
|---------------------------------------------|--------|-----------------------------------------|------------|
|                                        |   | 2010                                    |       |   | 2009 |   |
| Net loss                                    |   | $                                       | (3,915,783 | ) |   | $ | (3,512,187 | ) |
| Change in cumulative translation adjustment |   |                                    | (25,359    | ) |   |   |  25,710 |   |
| Comprehensive loss                          |   | $                                       | (3,941,142 | ) |   | $ | (3,486,477 | ) |

----

| Cash and cash equivalents                 |   | $      | 421,978    |   |
|-------------------------------------------|--------|--------|------------|--------|
| Accounts receivable                       |   |   | 843,007    |   |
| Inventories                               |   |   | 1,883,469  |   |
| Prepaid expenses and other current assets |   |   | 187,232    |   |
| Property and equipment                    |   |   | 80,462     |   |
| Patents and licensed technologies         |   |   | 7,400,000  |   |
| Other intangible assets                   |   |   | 1,500,000  |   |
| Total assets acquired at fair value       |   |   | 12,316,148 |   |
|                                      |   |   |       |   |
| Accounts payable                          |   |   | (936,099   | )      |
| Accrued compensation and related expenses |   |   | (35,906    | )      |
| Other accrued liabilities                 |   |   | (419,186   | )      |
| Deferred revenues                         |   |   | (576,349   | )      |
| Total liabilities assumed                 |   |   | (1,967,540 | )      |
|                                      |   |   |       |   |
| Net assets acquired                       |   | $      | 10,348,608 |   |

----

|                                                        |   | Three Months Ended March 31,(unaudited) |            |
|-------------------------------------------------------------|--------|-----------------------------------------|-----------------|
|                                                        |   | 2010                                    |            |   | 2009 |   |
|                                                        |   |                                    |            |   |   |   |
| Net revenues                                                |   | $                                       | 6,686,928       |   |   | $ | 8,325,751 |   |
| Net loss                                                    |   | $                                       | (3,915,783      | ) |   | $ | (4,225,350 | ) |
| Basic and diluted loss per share                            |   | $                                       | (1.75           | ) |   | $ | (2.82 | ) |
| Shares used in calculating basic and diluted loss per share |   |                                    |  2,238,456 |   |   |   |  1,500,835 |   |

|                               |   | March 31, 2010 |      |   | December 31, 2009 |   |
|------------------------------------|--------|---------------------|-----------|--------|------------------------|--------|
|                               |   | (unaudited)         |      |   |                   |   |
| Raw materials and work in progress |   | $                   | 4,382,804 |   |                   | $      | 4,082,593 |   |
| Finished goods                     |   |                | 2,292,980 |   |                   |   | 2,920,257 |   |
| Total inventories                  |   | $                   | 6,675,784 |   |                   | $      | 7,002,850 |   |

|                                      |   | March 31, 2010 |       |   | December 31, 2009 |   |
|-------------------------------------------|--------|----------------|------------|--------|-------------------|--------|
|                                      |   | (unaudited)    |       |   |              |   |
| Lasers in service                         |   | $              | 16,419,732 |   |              | $      | 16,436,529 |   |
| Computer hardware and software            |   |           | 368,505    |   |              |   | 368,668 |   |
| Furniture and fixtures                    |   |           | 685,638    |   |              |   | 683,573 |   |
| Machinery and equipment                   |   |           | 845,856    |   |              |   | 845,856 |   |
| Leasehold improvements                    |   |           | 262,395    |   |              |   | 262,395 |   |
|                                      |   |           | 18,582,126 |   |              |   | 18,597,021 |   |
| Accumulated depreciation and amortization |   |           | (9,415,031 | )      |              |   | (9,303,539 | ) |
| Property and equipment, net               |   | $              | 9,167,095  |   |              | $      | 9,293,482 |   |

----

|                                                                                                                                                  |   | March 31, 2010 |            |   | December 31, 2009 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|-----------------|--------|-------------------|--------|
|                                                                                                                                                  |   | (unaudited)    |            |   |              |   |
| Patents, owned and licensed, at gross costs of $8,021,670 and $8,019,351, net of accumulated amortization of $1,223,571 and $1,025,400, respectively. |   | $              |  6,798,099 |   |              | $      |  6,993,951 |   |
| Other licensed or developed technologies, at gross costs of $2,332,364, net of accumulated amortization of $1,615,907 and $1,574,653, respectively.   |   |           |  716,457   |   |              |   |  757,711 |   |
|                                                                                                                                                  |   | $              | 7,514,556       |   |              | $      | 7,751,662 |   |

|                                                                                                                             |   | March 31, 2010 |          |   | December 31, 2009 |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|----------------|---------------|--------|-------------------|--------|
|                                                                                                                             |   | (unaudited)    |          |   |              |   |
| Customer Relationships, at gross cost of $2,200,000, net of accumulated amortization of $1,754,167 and $1,669,398, respectively. |   |           |  445,833 |   |              | $      |  530,602 |   |
| Tradename, at gross cost of $2,100,000, net of accumulated amortization of $662,478 and $609,977, respectively.                  |   |           | 1,437,522     |   |              |   |  1,490,023 |   |
|                                                                                                                             |   | $              | 1,883,355     |   |              | $      | 2,020,625 |   |

----

|                                           |   | March 31, 2010 |    |   | December 31, 2009 |   |
|------------------------------------------------|--------|----------------|---------|--------|-------------------|--------|
|                                           |   | (unaudited)    |    |   |              |   |
| Accrued payroll and related taxes              |   | $              | 44,745  |   |              | $      | 260,280 |   |
| Accrued vacation                               |   |           | 226,670 |   |              |   | 129,026 |   |
| Accrued commissions and bonus                  |   |           | 286,388 |   |              |   | 341,685 |   |
| Accrued severance                              |   |           | 157,139 |   |              |   | 402,355 |   |
| Total accrued compensation and related expense |   | $              | 714,942 |   |              | $      | 1,133,346 |   |

|                                     |   | March 31, 2010 |      |   | December 31, 2009 |   |
|------------------------------------------|--------|----------------|-----------|--------|-------------------|--------|
|                                     |   | (unaudited)    |      |   |              |   |
| Accrued professional and consulting fees |   | $              | 350,500   |   |              | $      | 552,990 |   |
| Accrued warranty                         |   |           | 691,092   |   |              |   | 773,627 |   |
| Accrued sales taxes and other expenses   |   |           | 230,456   |   |              |   | 274,797 |   |
| Total other accrued liabilities          |   | $              | 1,272,048 |   |              | $      | 1,601,414 |   |

|                                                                                                                                                 |   | March 31, 2010 |    |   | December 31, 2009 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|---------|--------|-------------------|--------|
|                                                                                                                                                 |   | (unaudited)    |    |   |              |   |
| Note payable – unsecured creditor, interest at 5.43%, payable in monthly principal and interest installments of $49,803 through February 2010. |   | $              | -       |   |              | $      | 98,934 |   |
|                                                                                                                                                 |   |           |    |   |              |   |   |   |
| Note Payable – unsecured creditor, interest at 6%, payable in monthly principal and interest installments of $2,880 through June 2012          |   |           | 69,720  |   |              |   | 77,239 |   |
|                                                                                                                                                 |   |           |    |   |              |   |   |   |
|                                                                                                                                                 |   |           | 69,720  |   |              |   | 176,173 |   |
| Less: current maturities                                                                                                                             |   |           | (31,226 | )      |              |   | (129,696 | ) |
| Notes payable, net of current maturities                                                                                                             |   | $              | 38,494  |   |              | $      | 46,477 |   |

----

|                                |   | March 31, 2010 |       |   | December 31, 2009 |   |
|-------------------------------------|--------|----------------|------------|--------|-------------------|--------|
|                                |   | (unaudited)    |       |   |              |   |
| Term note                           |   | $              | 1,730,246  |   |              | $      | - |   |
| Total borrowings on credit facility |   |           | 3,005,819  |   |              |   | 3,940,252 |   |
| Less: current portion               |   |           | (2,570,524 | )      |              |   | (3,179,469 | ) |
| Total long-term debt                |   | $              | 2,165,541  |   |              | $      | 760,783 |   |

|                                 |   | March 2010 |    |
|--------------------------------------|--------|------------|---------|
|                                 |   |       |    |
| Number of shares underlying warrants |   |       | 102,180 |   |
| Exercise price                       |   | $          | 7.34    |   |
| Fair value of warrants               |   | $          | 769,754 |   |
| Volatility                           |   |       | 87.68   | % |
| Risk-free interest rate              |   |       | 2.48    | % |
| Expected dividend yield              |   |       | 0       | % |
| Expected warrant life                |   | 5 years    |    |

----

|                                    |   | December 2007 |    |   | September 2008 |   |
|-----------------------------------------|--------|---------------|---------|--------|---------------------|--------|
|                                    |   |          |    |   |                |   |
| Number of of shares underlying warrants |   |          | 11,216  |   |                |   | 4,589 |   |
| Exercise price                          |   | $             | 47.04   |   |                | $      | 18.48 |   |
| Fair value of warrants                  |   | $             | 221,716 |   |                | $      | 44,366 |   |
| Volatility                              |   |          | 59.44   | %      |                |   | 60.92 | % |
| Risk-free interest rate                 |   |          | 3.45    | %      |                |   | 2.98 | % |
| Expected dividend yield                 |   |          | 0       | %      |                |   | 0 | % |
| Expected warrant life                   |   | 5 years       |    |   | 5 years             |   |

| Year Ended December 31,                    |   |   |      |
|--------------------------------------------|--------|--------|-----------|
| Nine months of 2010                        |   | $      | 2,614,488 |   |
| 2011                                       |   |   | 3,551,881 |   |
| Total minimum payments                     |   |   | 6,166,369 |   |
|                                       |   |   |      |   |
| Less: interest                             |   |   | (639,024  | ) |
| Less: unamortized warrant discount         |   |   | (791,280  | ) |
|                                       |   |   |      |   |
| Present value of total minimum obligations |   | $      | 4,736,065 |   |

----

|                                |   | March 31, 2010 |       |   | December 31, 2009 |   |
|-------------------------------------|--------|----------------|------------|--------|-------------------|--------|
|                                |   | (unaudited)    |       |   |              |   |
| Total borrowings on credit facility |   | $              | 18,270,382 |   |              | $      | 17,369,943 |   |
| Less: current portion               |   |           | -          |   |              |   | - |   |
| Total long-term debt                |   | $              | 18,270,382 |   |              | $      | 17,369,943 |   |

| ·   | The Company has combined the aggregate outstanding obligations under the Convertible Notes into two convertible notes. Each note matures on February 27, 2014 and is identical to the original form of convertible note except as noted below; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | The larger note has a principal amount of $16,746,270. The interest rate of this note was increased from 8% to 10%. The incremental 2% increase in the interest rate may be paid in cash, and may not be paid in convertible paid in kind (“PIK”) notes unless and until our stockholders vote to approve payment in the form of a convertible PIK note; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The smaller note has a principal amount of $2,800,406. The conversion price of this note was reduced to $11.26 and the down-round anti-dilution adjustment to the conversion price was removed. The interest rate of this note was increased from 8% to 10%. The full amount of the accrued interest remains payable in cash or convertible PIK notes. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The collateral securing the Convertible Note was expanded by adding a first-priority lien against all of the Company’s assets other than the assets pledged with first-priority liens to CIT Healthcare and to Clutterbuck Funds. When assets are released from the lien of CIT Healthcare, such assets will become subject to the first-priority lien of Clutterbuck Funds and a second-priority lien of the Holder. Finally, when assets are released from the lien of Clutterbuck Funds, such assets will become subject to the first-priority lien of the Holder. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Three of the Company’s subsidiaries (ProCyte Corporation, Photo Therapeutics, Inc. and SLT Technology, Inc.) have guaranteed the Company’s obligations under the Convertible Notes. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                 |   | March 31, 2010 |      |   | December 31, 2009 |   |    | March 31, 2009 |             |
|--------------------------------------|--------|----------------|-----------|--------|-------------------|--------|---------|----------------|------------------|
| Number of shares underlying warrants |   |           | 251,528   |   |              |   | 244,251 |           |             |   | 174,367 |   |
| Exercise price                       |   | $              | 21.47     |   |              | $      | 22.108  |           |             | $ | 30.96 |   |
| Fair value of warrants               |   | $              | 1,672,906 |   |              | $      | 741,525 |           |             | $ | 1,459,089 |   |
| Volatility                           |   |           | 82.13     | %      |              |   | 79.23   | %              |             |   | 88.67 | % |
| Risk-free interest rate              |   |           | 3.32      | %      |              |   | 3.39    | %              |             |   | 2.28 |   |
| Expected dividend yield              |   |           | 0         | %      |              |   | 0       | %              |             |   | 0 | % |
| Expected warrant life                |   | 6.92 years     |      |   | 7.17 years        |   |    |           | 7.92 years  |   |

| Warrant liability:                            |   |   |      |
|-----------------------------------------------|--------|--------|-----------|
| Balance as of January 1, 2010                 |   | $      | 741,525   |   |
| Increase/(decrease) in fair value of warrants |   |   | 931,381   |   |
| Balance as of March 31, 2010                  |   | $      | 1,672,906 |   |

|                                   |   |  Number of Options |    |   | Weighted Average Exercise Price |   |
|----------------------------------------|--------|-------------------------|---------|--------|---------------------------------|--------|
| Outstanding, January 1, 2010           |   |                    | 158,304 |   |                            | $      | 57.42 |   |
| Granted                                |   |                    | 15,000  |   |                            |   | 7.23 |   |
| Cancelled                              |   |                    | (15,231 | )      |                            |   | 97.44 |   |
| Outstanding, March 31 2010             |   |                    | 158,073 |   |                            | $      | 48.80 |   |
| Options excercisable at March 31, 2010 |   |                    | 104,701 |   |                            | $      | 63.50 |   |

----

| Assumptions for Option Grants | Three Months Ended March 31,(unaudited) |
|-------------------------------|-----------------------------------------|
|                          | 2010                                    |   | 2009 |
| Risk-free interest rate       | 3.71%                                   |   | 2.42% |
| Volatility                    | 84.37%                                  |   | 86.74% |
| Expected dividend yield       | 0%                                      |   | 0% |
| Expected life                 | 8.1 years                               |   | 8.1 years |
| Estimated forfeiture rate     | 17%                                     |   | 12% |

----

|                                |   |              |            |   |                     |   |         |          |   |   |             |   |   |   |         |
|-------------------------------------|--------|-------------------|-----------------|--------|--------------------------|--------|--------------|---------------|--------|--------|------------------|--------|--------|--------|--------------|
|                                |   | PHYSICIANDOMESTIC |            |   | PHYSICIAN INTERN’L |   |         | OTHERCHANNELS |   |   | SURGICALPRODUCTS |   |   | TOTAL  |         |
| Revenues                            |   | $                 | 3,874,987       |   |                     | $      | 1,230,081    |          |   | $      | 780,791          |   |   | $      | 801,069      |   |   | $ | 6,686,928 |   |
| Costs of revenues                   |   |              | 2,050,797       |   |                     |   | 647,305      |          |   |   | 414,866          |   |   |   | 481,369      |   |   |   | 3,594,337 |   |
| Gross profit                        |   |              | 1,824,190       |   |                     |   | 582,776      |          |   |   | 365,925          |   |   |   | 319,700      |   |   |   | 3,092,591 |   |
| Gross profit %                      |   |              | 47.1            | %      |                     |   | 47.4         | %             |   |   | 46.9             | %      |   |   | 39.9         | % |   |   | 46.2 | % |
|                                |   |              |            |   |                     |   |         |          |   |   |             |   |   |   |         |   |   |   |   |   |
| Allocated operating expenses:       |   |              |            |   |                     |   |         |          |   |   |             |   |   |   |         |   |   |   |   |   |
| Selling, general and administrative |   |              |  2,787,307 |   |                     |   | 274,402      |          |   |   |  185,956    |   |   |   |  38,186 |   |   |   |  3,285,851 |   |
| Engineering and product development |   |              |  115,004   |   |                     |   |  95,193 |          |   |   |  96,063     |   |   |   | 33,017       |   |   |   |  339,277 |   |
|                                |   |              |            |   |                     |   |         |          |   |   |             |   |   |   |         |   |   |   |   |   |
| Unallocated operating expenses      |   |              |  -         |   |                     |   |  -      |          |   |   |  -          |   |   |   |  -      |   |   |   |  1,798,022 |   |
|                                |   |              | 2,902,311       |   |                     |   | 369,595      |          |   |   | 282,019          |   |   |   | 71,203       |   |   |   | 5,423,150 |   |
| Income (loss) from operations       |   |              | (1,078,121      | )      |                     |   | 213,181      |          |   |   | 83,906           |   |   |   | 248,497      |   |   |   | (2,330,559 | ) |
|                                |   |              |            |   |                     |   |         |          |   |   |             |   |   |   |         |   |   |   |   |   |
| Interest expense, net               |   |              | -               |   |                     |   | -            |          |   |   | -                |   |   |   | -            |   |   |   | (653,843 | ) |
| Change in fair value of warrant     |   |              | -               |   |                     |   | -            |          |   |   | -                |   |   |   | -            |   |   |   | (931,381 | ) |
|                                |   |              |            |   |                     |   |         |          |   |   |             |   |   |   |         |   |   |   |   |   |
| Net (loss) income                   |   | $                 | (1,078,121      | )      |                     | $      | 213,181      |          |   | $      | 83,906           |   |   | $      | 248,497      |   |   | $ | (3,915,783 | ) |

----

|                                |   | PHYSICIANDOMESTIC |            |   | PHYSICIAN INTERN’L |   |         | OTHER CHANNELS |   |   | SURGICAL PRODUCTS |   |   | TOTAL  |         |
|-------------------------------------|--------|-------------------|-----------------|--------|--------------------------|--------|--------------|----------------|--------|--------|-------------------|--------|--------|--------|--------------|
| Revenues                            |   | $                 | 4,280,142       |   |                     | $      | 1,420,970    |           |   | $      | 921,788           |   |   | $      | 875,442      |   |   | $ | 7,498,342 |   |
| Costs of revenues                   |   |              | 2,065,509       |   |                     |   | 841,293      |           |   |   | 261,905           |   |   |   | 628,893      |   |   |   | 3,797,600 |   |
| Gross profit                        |   |              | 2,214,633       |   |                     |   | 579,677      |           |   |   | 659,883           |   |   |   | 246,549      |   |   |   | 3,700,742 |   |
| Gross profit %                      |   |              | 51.7            | %      |                     |   | 40.8         | %              |   |   | 71.6              | %      |   |   | 28.2         | % |   |   | 49.4 | % |
|                                |   |              |            |   |                     |   |         |           |   |   |              |   |   |   |         |   |   |   |   |   |
| Allocated operating expenses:       |   |              |            |   |                     |   |         |           |   |   |              |   |   |   |         |   |   |   |   |   |
| Selling, general and administrative |   |              |  3,529,841 |   |                     |   | 320,700      |           |   |   |  86,585      |   |   |   |  66,321 |   |   |   |  4,003,447 |   |
| Engineering and product development |   |              |  56,735    |   |                     |   |  20,606 |           |   |   |  24,347      |   |   |   | 100,009      |   |   |   |  201,697 |   |
|                                |   |              |            |   |                     |   |         |           |   |   |              |   |   |   |         |   |   |   |   |   |
| Unallocated operating expenses      |   |              |  -         |   |                     |   |  -      |           |   |   |  -           |   |   |   |  -      |   |   |   |  2,696,484 |   |
|                                |   |              | 3,586,576       |   |                     |   | 341,306      |           |   |   | 110,932           |   |   |   | 166,330      |   |   |   | 6,901,628 |   |
| Income (loss) from operations       |   |              | (1,371,943      | )      |                     |   | 238,371      |           |   |   | 548,951           |   |   |   | 80,219       |   |   |   | (3,200,886 | ) |
|                                |   |              |            |   |                     |   |         |           |   |   |              |   |   |   |         |   |   |   |   |   |
| Interest expense, net               |   |              | -               |   |                     |   | -            |           |   |   | -                 |   |   |   | -            |   |   |   | (402,523 | ) |
| Change in fair value of warrants    |   |              | -               |   |                     |   | -            |           |   |   | -                 |   |   |   | -            |   |   |   | 91,222 |   |
|                                |   |              |            |   |                     |   |         |           |   |   |              |   |   |   |         |   |   |   |   |   |
| Net (loss) income                   |   | $                 | (1,371,943      | )      |                     | $      | 238,371      |           |   | $      | 548,951           |   |   | $      | 80,219       |   |   | $ | (3,512,187 | ) |

|                                 |   | March 31, 2010 |       |   | December 31, 2009 |   |
|--------------------------------------|--------|----------------|------------|--------|-------------------|--------|
|                                 |   | (unaudited)    |       |   |              |   |
| Assets:                              |   |           |       |   |              |   |
| Total assets for reportable segments |   | $              | 48,395,783 |   |              | $      | 49,890,944 |   |
| Other unallocated assets             |   |           | 3,113,633  |   |              |   | 3,277,202 |   |
| Consolidated total                   |   | $              | 51,509,416 |   |              | $      | 53,168,146 |   |

|     |   | Three Months Ended March 31, (unaudited) |      |
|----------|--------|------------------------------------------|-----------|
|     |   | 2010                                     |      |   | 2009 |   |
| Domestic |   | $                                        | 5,398,273 |   |   | $ | 5,313,822 |   |
| Foreign  |   |                                     | 1,288,655 |   |   |   | 2,184,520 |   |
|     |   | $                                        | 6,686,928 |   |   | $ | 7,498,342 |   |

----

ITEM 

| ·   | Physician Domestic; |
|--------------------|---------------------|

| ·   | Physician International; |
|--------------------|--------------------------|

| ·   | Other Channels; and |
|--------------------|---------------------|

| ·   | Surgical Products. |
|--------------------|--------------------|

----

----

----

|                                         |   | Three Months Ended March 31,(unaudited) |      |
|----------------------------------------------|--------|-----------------------------------------|-----------|
|                                         |   | 2010                                    |      |   | 2009 |   |
| Physician Domestic Revenues                  |   | $                                       | 3,874,987 |   |   | $ | 4,280,142 |   |
| Physician International Revenues             |   |                                    | 1,230,081 |   |   |   | 1,420,970 |   |
| Other Channels Revenues                      |   |                                    | 780,791   |   |   |   | 921,788 |   |
|    Total Dermatology Revenues |   |                                    | 5,885,859 |   |   |   | 6,622,900 |   |
|                                         |   |                                    |      |   |   |   |   |   |
| Surgical Products                            |   |                                    | 801,069   |   |   |   | 875,442 |   |
|                                         |   |                                    |      |   |   |   |   |   |
| Total Revenues                               |   | $                                       | 6,686,928 |   |   | $ | 7,498,342 |   |

----

|                              |   | Three Months Ended March 31, (unaudited) |      |
|-----------------------------------|--------|------------------------------------------|-----------|
|                              |   | 2010                                     |      |   | 2009 |   |
| XTRAC treatments                  |   | $                                        | 2,221,897 |   |   | $ | 2,037,004 |   |
| XTRAC laser sales                 |   |                                     | 128,200   |   |   |   | 638,305 |   |
| Skincare products                 |   |                                     | 1,244,373 |   |   |   | 1,416,154 |   |
| PTL products                      |   |                                     | 240,650   |   |   |   | 188,679 |   |
| Metvixia                          |   |                                     | 39,867    |   |   |   | - |   |
|                              |   |                                     |      |   |   |   |   |   |
| Total Physician Domestic Revenues |   | $                                        | 3,874,987 |   |   | $ | 4,280,142 |   |

|                                                      |   | Three Months Ended March 31,(unaudited) |          |
|-----------------------------------------------------------|--------|-----------------------------------------|---------------|
|                                                      |   | 2009                                    |          |   | 2008 |   |
| Recognized treatment revenue                              |   | $                                       | 2,221,897     |   |   | $ | 2,037,004 |   |
| Change in deferred treatmentrevenue                       |   |                                    |  148,181 |   |   |   |  321,033 |   |
| Net billed revenue                                        |   | $                                       | 2,370,078     |   |   | $ | 2,358,037 |   |
| Procedure volume total                                    |   |                                    | 38,432        |   |   |   | 37,549 |   |
| Less: Non-billed procedures                               |   |                                    | 1,391         |   |   |   | 1,805 |   |
| Net billed procedures                                     |   |                                    | 37,041        |   |   |   | 35,744 |   |
| Avg. price of treatments billed                           |   | $                                       | 63.99         |   |   | $ | 65.97 |   |
| Change in procedures with deferred treatment revenue, net |   |                                    |  2,316   |   |   |   |  4,866 |   |

----

|                                   |   | Three Months Ended March 31, (unaudited) |      |
|----------------------------------------|--------|------------------------------------------|-----------|
|                                   |   | 2010                                     |      |   | 2009 |   |
| International dermatology equipment    |   | $                                        | 632,005   |   |   | $ | 999,084 |   |
| Skincare products                      |   |                                     | 361,571   |   |   |   | 271,684 |   |
| PTL products                           |   |                                     | 236,505   |   |   |   | 150,202 |   |
|                                   |   |                                     |      |   |   |   |   |   |
| Total Physician International Revenues |   | $                                        | 1,230,081 |   |   | $ | 1,420,970 |   |

----

| ·   | We sell refurbished domestic XTRAC laser systems into the international market. The selling price for used equipment is substantially less than new equipment, some of which may be substantially depreciated in connection with its use in the domestic market. We sold 10 used lasers in the three months ended March 31, 2010, at an average price of $21,000. We sold no such lasers in the three months ended March 31, 2009; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In addition to the XTRAC laser system (both new and used), we sell the VTRAC, a lamp-based, alternative UVB light source that has a wholesale sales price that is below our competitors’ international dermatology equipment and below our XTRAC laser. In the three months ended March 31, 2010, we sold 2 VTRAC systems, at an average price of $27,500. In the three months ended March 31, 2009, we sold no VTRAC systems. Additionally, we have a backorder of 17 VTRAC systems as of March 31, 2010 due to delays in the production process. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                      |   | Three Months Ended March 31,(unaudited) |     |
|-------------------------------------------|--------|-----------------------------------------|----------|
|                                      |   | 2010                                    |     |   | 2009 |   |
| Revenues                                  |   | $                                       | 632,005  |   |   | $ | 999,084 |   |
|    Less: part sales        |   |                                    | (188,005 | ) |   |   | (229,184 | ) |
| Laser/lamp revenues                       |   |                                    | 444,000  |   |   |   | 769,900 |   |
|    Laser/lamp systems sold |   |                                    | 16       |   |   |   | 15 |   |
| Average revenue per laser/lamp            |   | $                                       | 27,750   |   |   | $ | 51,327 |   |

----

|                          |   | Three Months Ended March 31, (unaudited) |    |
|-------------------------------|--------|------------------------------------------|---------|
|                          |   | 2010                                     |    |   | 2009 |   |
| Skincare products             |   | $                                        | 481,962 |   |   | $ | 514,621 |   |
| PTL products                  |   |                                     | 298,829 |   |   |   | 407,167 |   |
|                          |   |                                     |    |   |   |   |   |   |
| Total Other Channels Revenues |   | $                                        | 780,791 |   |   | $ | 921,788 |   |

----

|                                        |   | Three Months Ended March 31, (unaudited) |    |
|---------------------------------------------|--------|------------------------------------------|---------|
|                                        |   | 2010                                     |    |   | 2009 |   |
| Revenues                                    |   | $                                        | 801,069 |   |   | $ | 875,442 |   |
|    Laser systems sold        |   |                                     | 10      |   |   |   | 2 |   |
| Laser system revenues                       |   | $                                        | 241,695 |   |   | $ | 63,646 |   |
|    Average revenue per laser |   | $                                        | 24,170  |   |   | $ | 31,823 |   |

|                    |   | Three Months Ended March 31, (unaudited) |      |
|-------------------------|--------|------------------------------------------|-----------|
|                    |   | 2010                                     |      |   | 2009 |   |
| Product:                |   |                                     |      |   |   |   |
| Physician Domestic      |   | $                                        | 689,762   |   |   | $ | 757,768 |   |
| Physician International |   |                                     | 647,305   |   |   |   | 841,293 |   |
| Other Channels          |   |                                     | 414,866   |   |   |   | 261,905 |   |
| Surgical products       |   |                                     | 447,677   |   |   |   | 598,382 |   |
| Total Product costs     |   | $                                        | 2,199,610 |   |   | $ | 2,459,348 |   |
|                    |   |                                     |      |   |   |   |   |   |
| Services:               |   |                                     |      |   |   |   |   |   |
| Physician Domestic      |   | $                                        | 1,361,035 |   |   | $ | 1,307,741 |   |
| Surgical products       |   |                                     | 33,692    |   |   |   | 30,511 |   |
| Total Services costs    |   | $                                        | 1,394,727 |   |   | $ | 1,338,252 |   |
|                    |   |                                     |      |   |   |   |   |   |
| Total Costs of Revenues |   | $                                        | 3,594,337 |   |   | $ | 3,797,600 |   |

----

| Company Profit Analysis |   | Three Months Ended March 31,(unaudited) |      |
|-------------------------|--------|-----------------------------------------|-----------|
|                    |   | 2010                                    |      |   | 2009 |   |
| Revenues                |   | $                                       | 6,686,928 |   |   | $ | 7,498,342 |   |
| Percent decrease        |   |                                    | (10.8     | %) |   |   |   |   |
| Cost of revenues        |   |                                    | 3,594,337 |   |   |   | 3,797,600 |   |
| Percent decrease        |   |                                    | (5.4      | %) |   |   |   |   |
| Gross profit            |   | $                                       | 3,092,591 |   |   | $ | 3,700,742 |   |
| Gross margin percentage |   |                                    | 46.2      | % |   |   | 49.4 | % |

| ·   | Since Photo Therapeutics was acquired on February 27, 2009, costs covering the period ended March 31, 2010 include three months of activity, while costs covering the period ended March 31, 2009 only include one month. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Revenues for the three months ended March 31, 2009 included a milestone payment to us from a licensee of $213,000 under a certain licensing arrangement for the Clear U™ hand-held device. The licensee intends to use the device and its technology as a platform to attempt to address the mass consumer acne market. There were no costs associated with this revenue stream. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We sold approximately $510,000 less in domestic XTRAC lasers in the three months ended March 31, 2010. Certain of these lasers were being depreciated until the time of sale, since they were previously utilized as field placements. The cost of sales associated with these sales decreased $128,800 between the comparable three month periods. The margin on these capital equipment sales was 77% in the three months ended March 31, 2010 compared to 64% in the comparable period in 2009. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | There were increases in certain allocable XTRAC manufacturing overhead costs due to an under-absorption of the overhead costs of approximately $220,000. Additionally there were under-absorbed overhead costs related to the surgical products segment of $45,000. These under-absorptions were due to delays in production during the three months ended March 31, 2010. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We sold 14 XTRAC laser systems and 2 VTRAC lamp-based excimer systems during the three months ended March 31, 2010 and 15 XTRAC laser systems and no VTRAC systems in the comparable period in 2009. Included in the 14 XTRAC lasers systems sold were 10 used laser systems, which have a lower average selling price and gross margin percentage, compared to no used laser systems in the three months ended March 31, 2009. Consequently, gross profit increased as a result of the mix of units sold. The gross margin percentage for the VTRAC is higher than for the XTRAC. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The revenues for Metvixia products of $39,867 have no associated cost of sales. |
|--------------------|---------------------------------------------------------------------------------|

----

| Physician Domestic Segment |   | Three Months Ended March 31,(unaudited) |      |
|----------------------------|--------|-----------------------------------------|-----------|
|                       |   | 2010                                    |      |   | 2009 |   |
| Revenues                   |   | $                                       | 3,874,987 |   |   | $ | 4,280,142 |   |
| Percent decrease           |   |                                    | (9.5      | %) |   |   |   |   |
| Cost of revenues           |   |                                    | 2,050,797 |   |   |   | 2,065,509 |   |
| Percent decrease           |   |                                    | (.7       | %) |   |   |   |   |
| Gross profit               |   | $                                       | 1,824,190 |   |   | $ | 2,214,633 |   |
| Gross margin percentage    |   |                                    | 47.1      | % |   |   | 51.7 | % |

| ·   | We began offering enhanced services to our XTRAC treatment consignment program customers through a membership program which bundles certain features and benefits offered to our customers. These services include enhanced access to our reimbursement team, marketing assistance, and discounts off our other product lines. Consequently procedure volume increased by 4% from 35,744 to 37,041 billed procedures in the three months ended March 31, 2010 compared to the same period in 2009. Price per procedure did not change significantly between the periods. Each incremental treatment procedure carries negligible variable cost. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We sold approximately $510,000 less in domestic XTRAC lasers in the three months ended March 31, 2010. Certain of these lasers were being depreciated until the time of sale, since they were previously utilized as field placements. The cost of sales associated with these sales decreased $128,800 between the comparable three month periods. The margin on these capital equipment sales was 77% in the three months ended March 31, 2010 compared to 64% in the comparable period in 2009. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The revenues for Metvixia products of $39,867 have no associated cost of sales. |
|--------------------|---------------------------------------------------------------------------------|

| ·   | For the three months ended March 31, 2010, PTL product revenues increased $51,971 over the prior year period, while the cost of sales for these products increased $152,903 for the same comparable periods. This cost of sales was due to the acquisition of Photo Therapeutics occurred on February 27, 2009, so there was only one month’s activity in the comparable prior year period. Due to the acquisition, an additional amortization of $185,000 is allocated to the segments based on each segment’s revenues for PTL products. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | There was an increase in certain allocable XTRAC manufacturing overhead costs due to an under-absorption of the overhead costs of approximately $170,000. This increase was due to delays in production during the three months ended March 31, 2010. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Physician International Segment |   | Three Months Ended March 31,(unaudited) |      |
|---------------------------------|--------|-----------------------------------------|-----------|
|                            |   | 2010                                    |      |   | 2009 |   |
| Revenues                        |   | $                                       | 1,230,081 |   |   | $ | 1,420,970 |   |
| Percent decrease                |   |                                    | (13.4     | %) |   |   |   |   |
| Cost of revenues                |   |                                    | 647,305   |   |   |   | 841,293 |   |
| Percent decrease                |   |                                    | (23.1     | %) |   |   |   |   |
| Gross profit                    |   | $                                       | 582,776   |   |   | $ | 579,677 |   |
| Gross margin percentage         |   |                                    | 47.4      | % |   |   | 40.8 | % |

| ·   | We sold 14 XTRAC laser systems and 2 VTRAC lamp-based excimer systems during the three months ended March 31, 2010 and 15 XTRAC laser systems and no VTRAC systems in the comparable period in 2009. Included in the 14 XTRAC lasers systems sold were 10 used laser systems, which have a lower average selling price and gross margin percentage, compared to no used laser systems in the three months ended March 31, 2009. Consequently, gross profit increased as a result of the mix of units sold. The gross margin percentage for the VTRAC is higher than for the XTRAC. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | International part sales, which have a higher margin percentage than system sales, decreased $36,000 for the three months ended March 31, 2010 as compared to the same period in 2009. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Gross profit for the three months ended March 31 2010 was negatively impacted by increases in certain allocable XTRAC manufacturing overhead costs that are charged against the international dermatology equipment segment. These increased costs, which approximately $50,000, related to an under-absorption of manufacturing costs due to delays in production. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | For the three months ended March 31, 2010, PTL product revenues increased $86,303 over the prior year period, while the cost of sales for these products increased $139,982 for the same comparable periods. This cost of sales was due to the acquisition of Photo Therapeutics occurred on February 27, 2009, so there was only one month’s activity in the comparable prior year period. Due to the acquisition there is additional amortization of $185,000 that is allocated to the segments based on each segment’s revenues for PTL products. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Other Channels Segment                   |   | Three Months Ended March 31,(unaudited) |    |
|------------------------------------------|--------|-----------------------------------------|---------|
|                                     |   | 2010                                    |    |   | 2009 |   |
| Revenues                                 |   | $                                       | 780,791 |   |   | $ | 921,788 |   |
|     Percent decrease |   |                                    | (15.3   | %) |   |   |   |   |
|                                     |   |                                    |    |   |   |   |   |   |
| Cost of revenues                         |   |                                    | 414,866 |   |   |   | 261,905 |   |
|     Percent increase |   |                                    | 58.4    | % |   |   |   |   |
| Gross profit                             |   | $                                       | 365,925 |   |   | $ | 659,883 |   |
| Gross margin percentage                  |   |                                    | 46.9    | % |   |   | 71.6 | % |

----

| ·   | Revenues for the three months ended March 31, 2009 included a milestone payment of $213,000 under a certain licensing arrangement for the Clear U™ hand-held device. The licensee intends to use the device and its technology as a platform to attempt to address the mass consumer acne market. There are no costs associated with this revenue stream. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The cost of sales for the PTL business increased mainly due to the fact that it was acquired on February 27, 2009, and consequently the comparable prior year period reflects only one month of activity. In addition, due to the acquisition there is additional amortization of $185,000 that is allocated to the segments based on each segment’s revenues for PTL products. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Copper peptide bulk compound is sold at a substantially lower gross margin than our other skin are products. There were revenues of $79,920 for the three months ended March 31, 2009. There were no comparable revenues in the three months ended March 31, 2010. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Surgical Products Segment |   | Three Months Ended March 31,(unaudited) |    |
|---------------------------|--------|-----------------------------------------|---------|
|                      |   | 2010                                    |    |   | 2009 |   |
| Revenues                  |   | $                                       | 801,069 |   |   | $ | 875,442 |   |
| Percent decrease          |   |                                    | (8.5    | %) |   |   |   |   |
| Cost of revenues          |   |                                    | 481,369 |   |   |   | 628,892 |   |
| Percent decrease          |   |                                    | (23.5   | %) |   |   |   |   |
| Gross profit              |   | $                                       | 319,700 |   |   | $ | 246,550 |   |
| Gross margin percentage   |   |                                    | 39.9    | % |   |   | 28.2 | % |

| ·   | This segment includes product sales of surgical laser systems and laser disposables. Disposables are more profitable than laser systems, but the sale of laser systems generates the subsequent recurring sale of laser disposables. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Revenues for the three months ended March 31, 2010 decreased by $74,373 from the three months ended March 31, 2009. There were 8 additional laser systems sold in the three months ended March 31, 2010 than in the comparable period of 2009. However, the lasers sold in the 2010 period were sold at lower prices than those sold in the comparable period in 2009. The decrease in average price per laser was largely due to the mix of lasers sold and volume discounts. Included in the laser sales for the three months ended March 31, 2010 and 2009 were sales of diode lasers of $190,000, representing 9 systems, and $24,000, representing 1 system respectively, which have substantially lower list sales prices than our other types of surgical lasers. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Beginning in 2010, the various allocable manufacturing costs of the Pennsylvania facility are allocated to surgical products, skincare and PTL products. In prior years, these costs were allocated to surgical products only. During 2009 we relocated our skincare and PTL facilities into our Pennsylvania facility and are now able to spread these fixed costs over many product lines. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Gross profit for the three months ended March 31, 2010 for surgical products was negatively impacted by approximately $45,000 due to delays in laser production that caused an under-absorption of fixed overhead costs. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Additionally, there was a decrease in sales of disposables between the periods, which have a higher gross margin as a percent of revenues than lasers. Fiber and other disposables sales decreased 32% |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | between the comparable three-month periods ended March 31, 2010 and 2009. |
|--------|---------------------------------------------------------------------------|

| ·   | The majority of the decrease related to a $539,000 in salaries, benefits and travel expenses associated with a decrease in the sales and marketing force and decreased revenues which generated lower commission expenses. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In the three months ended March 31, 2009, we expensed $432,000 of legal and transaction costs under ASC Topic 718 incurred in connection with the acquisition of Photo Therapeutics. There was no such corresponding expense in the three months ended March 31, 2010. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | There was a decrease in stock compensation expense of $83,000, mainly due to the termination of an executive officer. Additionally, there was a decrease in general and administrative salary and benefit expenses of approximately $95,000 related to that termination. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | There was also a decrease in marketing expense of $168,000 which resulted from improved control over marketing efforts. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

|                 |   | Three Months Ended March 31, (unaudited) |    |
|----------------------|--------|------------------------------------------|---------|
|                 |   | 2010                                     |    |   | 2009 |   |   | Change |   |
|                 |   |                                     |    |   |   |   |   |   |   |
| Interest expense     |   | $                                        | 654,002 |   |   | $ | 407,038 |   |   | $ | 246,964 |   |
| Interest income      |   |                                     | (159    | ) |   |   | (4,515 | ) |   |   | 4,356 |   |
| Net interest expense |   | $                                        | 653,843 |   |   | $ | 402,523 |   |   | $ | 251,320 |   |
|                 |   |                                     |    |   |   |   |   |   |   |   |   |   |

----

|                             |   | For the three months ended March 31, (unaudited) |       |
|----------------------------------|--------|--------------------------------------------------|------------|
|                             |   | 2010                                             |       |   | 2009 |   |   | Change |   |
|                             |   |                                             |       |   |   |   |   |   |   |
| Net loss                         |   | $                                                | 3,915,783  |   |   | $ | 3,512,187 |   |   | $ | 403,596 |   |
|                             |   |                                             |       |   |   |   |   |   |   |   |   |   |
| Components included in net loss: |   |                                             |       |   |   |   |   |   |   |   |   |   |
| Depreciation and amortization    |   | $                                                | (1,157,999 | ) |   | $ | ( 995,220 | ) |   | $ | ( 162,779 | ) |
| Stock-based compensation         |   |                                             | (209,637   | ) |   |   | (292,674 | ) |   |   | 83,037 |   |
| Interest expense, net            |   |                                             | (653,843   | ) |   |   | (402,523 | ) |   |   | (251,320 | ) |
| Change in fair value of warrants |   |                                             | (931,381   | ) |   |   | 91,222 |   |   |   | (1,022,603 | ) |
|                             |   | $                                                | (2,952,860 | ) |   | $ | (1,599,195 | ) |   | $ | (1,353,665 | ) |

----

| ·   | We have combined the aggregate outstanding obligations under the Convertible Notes into two convertible notes. Each note matures on February 27, 2014 and is identical to the original form of convertible note except as noted below; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The larger note has a principal amount of $16,746,270. The interest rate of this note was increased from 8% to 10%. The incremental 2% increase in the interest rate may be paid in cash, and may not be paid in convertible PIK notes unless and until our stockholders vote to approve payment in the form of a convertible PIK note; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The smaller note has a principal amount of $2,800,406. The conversion price of this note was reduced to $11.25850 and the down-round anti-dilution adjustment to the conversion price was removed. The interest rate of this note was increased from 8% to 10%. The full amount of the accrued interest remains payable in cash or convertible PIK notes. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The collateral securing the Convertible Note was expanded by adding a first-priority lien against all of our assets other than the assets pledged with first-priority liens to CIT Healthcare and to Clutterbuck Funds. When assets are released from the lien of CIT Healthcare, such assets will become subject to the first-priority lien of Clutterbuck Funds and a second-priority lien of the Holder. Finally, when assets are released from the lien of Clutterbuck Funds, such assets will become subject to the first-priority lien of the Holder. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Three of our subsidiaries (ProCyte Corporation, Photo Therapeutics, Inc. and SLT Technology, Inc.) have guaranteed our obligations under the Convertible Notes. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

ITEM 

|                                                       |   |                       |       |   | Pro-forma Information        |   |
|------------------------------------------------------------|--------|----------------------------|------------|--------|------------------------------|--------|
|                                                       |   | As Reported March 31, 2010 |       |   | Common Stock Price Reduction |   |   | Common Stock Price Increase |   |
|                                                       |   |                       |       |   |                         |   |   |   |   |
| Common stock price                                         |   | $                          | 10.31      |   |                         | $      | 8.81 |   |   | $ | 11.81 |   |
|                                                       |   |                       |       |   |                         |   |   |   |   |   |   |   |
| Condensed Consolidated Balance Sheet:                      |   |                       |       |   |                         |   |   |   |   |   |   |   |
| Derivative financial instruments                           |   | $                          | 1,672,906  |   |                         | $      | 1,374,298 |   |   | $ | 1,978,634 |   |
|                                                       |   |                       |       |   |                         |   |   |   |   |   |   |   |
| Change in fair value of derivative financial instruments   |   | $                          | -          |   |                         | $      | (298,608 | ) |   | $ | 305,728 |   |
|                                                       |   |                       |       |   |                         |   |   |   |   |   |   |   |
| Condensed Consolidated Statement of Operations:            |   |                       |       |   |                         |   |   |   |   |   |   |   |
| Increase in fair value of derivative financial instruments |   | $                          | 931,381    |   |                         | $      | 632,773 |   |   | $ | 1,237,109 |   |
|                                                       |   |                       |       |   |                         |   |   |   |   |   |   |   |
| Net loss attributable to common stockholders               |   | $                          | (3,915,782 | )      |                         | $      | (3,617,174 | ) |   | $ | (4,221,510 | ) |

----

ITEM 

PART 

ITEM 

----

ITEM 

ITEM 

| ·   | An amendment to our Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of common stock from 21,428,571 shares to 35,000,000, with 11,194,723 votes for, 194,218 votes against and 8,180 votes abstaining. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | An amendment to our Restated Certificate of Incorporation, as amended, to effect a reverse stock split of the Company’s outstanding common stock at an exchange ratio between 1-for-6 and to authorize the Company’s Board of Directors to implement the reverse stock split at any time prior to the 2010 annual meeting of stockholders by filing an amendment to our Restated Certificate of Incorporation, as amended, with 11,011,616 votes for 380,938 votes against and 4,567 votes abstaining. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

ITEM 

| 3.4              | Certificate of Amendment of Restated Certificate of Incorporation of PhotoMedex, Inc, filed on February 3, 2010 (2)                                                                                                                                           |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.9              | Amendment No. 2 to Securities Purchase Agreement, dated March 19, 2010 between PhotoMedex, Inc. and Perseus Partners VII, L.P.(3)                                                                                                                        |
| 4.10             | Amended and Restated Convertible Promissory Note #1, dated March 19, 2010 between PhotoMedex, Inc. and Perseus Partners VII, L.P. (3)                                                                                                                    |
| 4.11             | Amended and Restated Convertible Promissory Note #2, dated March 19, 2010 between PhotoMedex, Inc. and Perseus Partners VII, L.P. (3)                                                                                                                    |
| 4.12             | Amended and Restated Pledge and Security Agreement, dated March 19, 2010 between PhotoMedex, Inc. and Perseus Partners VII, L.P. (3)                                                                                                                     |
| 4.13             | Term Loan and Security Agreement, dated as of March 19, 2010, between PhotoMedex, Inc. and Clutterbuck Funds LLC(3)                                                                                                                                      |
| 4.14             | Term Note, dated March 19, 2010 between PhotoMedex, Inc. and Clutterbuck Funds LLC(3)                                                                                                                                                                    |
| 4.15             | Warrant, dated March 19, 2010 issued to Clutterbuck Funds LLC(3)                                                                                                                                                                                         |
| 10.43            | Co-Promotion Agreement, dated as of January 7, 2010, between PhotoMedex, Inc. and Galderma Laboratories, L.P.(1)                                                                                                                                              |
| 31.1   | Rule 13a-14(a)/15d-14(a) Certificate of Chief Executive Officer                                                                                                                                                                 |
| 31.2   | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer                                                                                                                                                               |
| 32.1   | Certificate of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 32.2   | Certificate of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |

| (1)   | Filed as part of our Current Report on Form 8-K on January 11, 2010 |
|-----------------|---------------------------------------------------------------------|

| (2)   | Filed as part of our Current Report on Form 8-K on February 3, 2010. |
|-----------------|----------------------------------------------------------------------|

| (3)   | Filed as part of our Current Report on Form 8-K on March 23, 2010. |
|-----------------|--------------------------------------------------------------------|

----

SIGNATURES

|                               |   PHOTOMEDEX, INC. |                                                            |
|------------------------------------|------------------------------|-----------------------------------------------------------------|
|                               |                         |                                                            |   |
| Date   May 17, 2010 | By:                          | /s/ Dennis M. McGrath                                      |   |
|                               |                         | Name  Dennis M. McGrath                                    |   |
|                               |                         | Title    President & Chief Executive Officer |   |

| Date   May 17, 2010 | By:    | /s/ Christina L. Allgeier                  |   |
|------------------------------------|--------|-------------------------------------------------|--------|
|                               |   | Name  Christina L. Allgeier           |   |
|                               |   | Title    Chief Financial Officer |   |

----

----