UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009.
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to .
 Commission File Number: 000-23017
 ECHO THERAPEUTICS, INC.
 
 Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    41-1649949
(I.R.S. Employer Identification Number)10 Forge Parkway, Franklin, MA
(Address of principal executive offices)
    
    02038
(Zip code)
 (508) 553-8850
 
 þ o
 o o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company þ o þ




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ECHO THERAPEUTICS, INC.
Quarterly report on Form 10-Q for the period ended March 31, 2009
 TABLE OF CONTENTS
 Item
    
    
    
    PagePART I
FINANCIAL INFORMATION1.
    
    Consolidated Financial Statements
    
    
    3Consolidated Balance Sheets as of March 31, 2009 and December 31, 2008
    
    
    3Consolidated Statements of Operations for three months ended March 31, 2009 and 2008
    
    
    4Consolidated Statements of Cash Flows for three months ended March 31, 2009 and 2008
    
    
    5Notes to Consolidated Financial Statements (Unaudited)
    
    
    62.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    164T.
    
    Controls and Procedures
    
    
    23PART II
FINANCIAL INFORMATION2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    235.
    
    Other Information
    
    
    236.
    
    Exhibits
    
    
    24SIGNATURES
    
    
    24




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##### 



PART IFINANCIAL INFORMATION
 
 Item 1. Consolidated Financial Statements.
 
 Echo Therapeutics, Inc.
Consolidated Balance Sheets
 As of,March 31,
    
    
    December 31,2009
    
    
    2008UnauditedASSETSCurrent Assets:Cash and cash equivalents
    
    $
    55,721
    
    
    $
    242,867Prepaid expenses and other current assets
    
    
    22,970
    
    
    
    17,132Total current assets
    
    
    78,691
    
    
    
    259,999Property and Equipment, at cost:Computer equipment
    
    
    242,495
    
    
    
    242,495Office and laboratory equipment
    
    
    609,029
    
    
    
    609,029Furniture and fixtures
    
    
    14,288
    
    
    
    14,288Manufacturing equipment
    
    
    129,320
    
    
    
    129,320Leasehold improvements
    
    
    177,768
    
    
    
    177,7681,172,900
    
    
    
    1,172,900Less-Accumulated depreciation and amortization
    
    
    (1,117,530
    )
    
    
    (1,105,330
    )Net property and equipment
    
    
    55,370
    
    
    
    67,570Other Assets:Restricted cash
    
    
    9,749
    
    
    
    10,250Intangible assets, net of accumulated amortization
    
    
    9,797,571
    
    
    
    9,827,154Deferred financing costs, net of amortization
    
    
    104,393
    
    
    
    141,373Deposits and other assets
    
    
    2,000
    
    
    
    2,000Total other assets
    
    
    9,913,713
    
    
    
    9,980,777Total assets
    
    $
    10,047,774
    
    
    $
    10,308,346LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    1,300,584
    
    
    $
    1,177,719Current portion of notes payable, net of discounts
    
    
    2,183,699
    
    
    
    2,054,062Derivative warrant liability
    
    
    1,331,551
    
    
    
    Accrued expenses
    
    
    193,370
    
    
    
    174,768Total current liabilities
    
    
    5,009,204
    
    
    
    3,406,549Notes Payable, net of current portion and discounts
    
    
    310,667
    
    
    
    300,467Stockholders Equity:Convertible Preferred Stock, $0.01 par value, authorized 10,000,000 shares at
March 31, 2009 and December 31, 2008 :Series A, authorized 2,636,363 shares, issued and outstanding 1,601,160 and
1,570,194 shares at March 31, 2009 and December 31, 2008, respectively
(preference in liquidation of $2,161,566 at March 31, 2009
    
    
    16,012
    
    
    
    15,702Series A-1, authorized 2,000,000 shares, issued and outstanding 793,479 and 778,136
shares at March 31, 2009 and December 31, 2008, respectively (preference in
liquidation
of $793,479 at March 31, 2009)
    
    
    7,935
    
    
    
    7,781Series A-2, authorized 4,400,000 and none, issued and outstanding 201,017 and none
at
March 31, 2009 and December 31, 2008, respectively (preference in liquidation of
$100,509 at March 31, 2009)
    
    
    2,010
    
    
    
    Common stock, $0.01 par value, authorized 60,000,000 shares, issued and outstanding
19,741,838 and 19,095,838 shares at March 31, 2009 and December 31, 2008, respectively
    
    
    197,421
    
    
    
    190,960Additional paid-in capital
    
    
    62,231,334
    
    
    
    64,668,550Accumulated deficit
    
    
    (57,726,809
    )
    
    
    (58,281,663
    )Total stockholders equity
    
    
    4,727,903
    
    
    
    6,601,330Total liabilities and stockholders equity
    
    
    10,047,774
    
    
    $
    10,308,346
  3




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##### 



Echo Therapeutics, Inc.
Consolidated Statements of Operations
 Three Months EndedMarch 31,2009
    
    
    2008Operating Expenses:Research and development
    
    $
    288,216
    
    
    $
    770,207Selling, general and administrative
    
    
    573,364
    
    
    
    1,190,418Total operating expenses
    
    
    861,580
    
    
    
    1,960,625Loss from operations
    
    
    (861,580
    )
    
    
    (1,960,625
    )Other Income (Expense):Interest income
    
    
    389
    
    
    
    10,468Interest expense
    
    
    (178,707
    )
    
    
    (280,233
    )Loss on extinguishment of debt
    
    
    
    
    
    
    (1,212,013
    )Derivatives loss
    
    
    (251,432
    )
    
    
    (538,698
    )Other income (expense), net
    
    
    (429,750
    )
    
    
    (2,020,476
    )Net loss
    
    
    (1,291,330
    )
    
    
    (3,981,101
    )Accretion of dividends on Convertible
Preferred Stock
    
    
    (57,674
    )
    
    
    Net loss applicable to common shareholders
    
    $
    (1,349,004
    )
    
    $
    (3,981,101
    )Net loss per common share, basic and diluted
    
    $
    (0.07
    )
    
    $
    (0.22
    )Basic and diluted weighted average common
shares outstanding
    
    
    19,380,146
    
    
    
    18,314,683
  4




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##### 



Echo Therapeutics, Inc.
Consolidated Statements of Cash Flows
 Three Months Ended March 31,2009
    
    
    2008Cash Flows From Operating Activities:Net loss
    
    $
    (1,291,330
    )
    
    $
    (3,981,101
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    41,783
    
    
    
    57,282Share-based compensation
    
    
    398,463
    
    
    
    486,000Fair value of common stock and warrants issued for services
    
    
    
    
    
    
    180,227Derivative loss
    
    
    251,432
    
    
    
    538,698Loss on extinguishment of debt
    
    
    
    
    
    
    1,212,013Non-cash interest expense
    
    
    176,818
    
    
    
    254,579Changes in assets and liabilities:Prepaid expenses and other current assets
    
    
    (5,838
    )
    
    
    (71,651
    )Accounts payable
    
    
    122,865
    
    
    
    171,877Accrued expenses
    
    
    18,602
    
    
    
    267,673Net cash used in operating activities
    
    
    (287,205
    )
    
    
    (884,403
    )Cash Flows from Investing Activities:Purchase of property and equipment
    
    
    
    
    
    
    (5,600
    )Decrease in restricted cash
    
    
    501
    
    
    
    Net cash provided by (used in) investing activities
    
    
    501
    
    
    
    (5,600
    )Cash Flows From Financing ActivitiesProceeds from the sale of Series A-2 preferred stock
    
    
    99,576
    
    
    
    Proceeds from Secured Senior Convertible Notes and Warrants
    
    
    
    
    
    
    500,000Proceeds from Senior Convertible Promissory Notes
    
    
    
    
    
    
    700,000Deferred financing costs
    
    
    
    
    
    
    (432,309
    )Dividends paid on Series A, A-1 and A-2 preferred stock
    
    
    (18
    )
    
    
    Proceeds from the exercise of warrants
    
    
    
    
    
    
    106,207Net cash provided by financing activities
    
    
    99,558
    
    
    
    873,898Net Decrease in Cash and Cash Equivalents
    
    
    (187,146
    )
    
    
    (16,105
    )Cash and Cash Equivalents, beginning of period
    
    
    242,867
    
    
    
    1,193,163Cash and Cash Equivalents, end of period
    
    $
    55,721
    
    
    $
    1,177,058Supplemental Disclosure of Cash Flow Information and Non Cash Financing Transactions:Cash paid for interest
    
    $
    816
    
    
    $
    613Accretion of dividend on Series A, A-1 and A-2 Convertible Preferred Stock
    
    $
    57,656
    
    
    $
    Beneficial conversion feature on Senior Convertible Notes
    
    $
    
    
    
    $
    121,320Common stock issued for conversion of Senior Convertible Notes and accrued interest
    
    $
    
    
    
    $
    52,041Fair value of warrants issued for deferred financing costs
    
    $
    
    
    
    $
    185,668Fair value of warrants issued in connection with Senior Convertible Notes included in extinguishment loss
    
    $
    
    
    
    $
    626,480Adjustment to fair value of Bridge Notes exchanged for Senior Convertible notes included in extinguishment loss
    
    $
    
    
    
    $
    585,533Fair value of warrants issued in connection with exchange of Senior Convertible Notes for preferred stock
included in extinguishment loss
    
    $
    
    
    
    $
    Intrinsic value of the conversion feature of the Bridge Notes when converted to Senior Convertible Notes
recorded as a reduction of additional paid-in capital
    
    $
    
    
    
    $
    212,938Relative fair value of warrants issued with Secured Notes
    
    $
    
    
    
    $
    219,838Derivative warrant liability reclassified from stockholders equity
    
    $
    1,080,118
    
    
    $
    Senior Convertible Notes issued for accrued interest
    
    $
    6,538
    
    
    $
    
 The accompanying notes are an integral part of these consolidated financial statements.
 5




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##### 



Echo Therapeutics, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Period Ended March 31, 2009 (Unaudited)
 (1) ORGANIZATION, BASIS OF PRESENTATION AND GOING CONCERN
     (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Use of Estimates
  Intangible Assets and Other Long-Lived Assets
  6




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Accounting for the Impairment and Disposal of Long-Lived
Assets
    Share-Based Payments
   Derivative Instruments
  Net Loss per Common Share
 Earnings per Share
 Research and Development Expenses
  Reclassifications
  7




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Recent Accounting Pronouncements
 Disclosures about Derivative Instruments and
Hedging Activities, an amendment of FASB Statement No. 133.
  (3) INTANGIBLE ASSETS
  Estimated
    
    
    
    
    
    
    AccumulatedLife
    
    
    Cost
    
    
    Amortization
    
    
    NetContract related intangible asset:Cato Research discounted contract
    
    3 years
    
    $
    355,000
    
    
    $
    182,429
    
    
    $
    172,571Technology related intangible assets:Patent for the AzoneTS-based product
candidates and formulation
    
    8 years
    
    
    1,305,000
    
    
    
    
    
    
    
    1,305,000Drug Master Files containing formulation,
clinical and safety documentation used by
the FDA
    
    8 years
    
    
    1,500,000
    
    
    
    
    
    
    
    1,500,000Two (2) in-process Durhalieve-related
pharmaceutical products
    
    8 years
    
    
    6,820,000
    
    
    
    
    
    
    
    6,820,000Total technology related intangible assets
    
    
    
    
    
    
    9,625,000
    
    
    
    
    
    
    
    9,625,000Total
    
    
    
    
    
    $
    9,980,000
    
    
    $
    182,429
    
    
    $
    9,797,571
  (4) NOTES PAYABLE
  March 31,
    
    December 31,2009
    
    2008Senior Convertible Notes:Senior convertible notes
    
    $
    337,986
    
    
    $
    331,448Unamortized discount
    
    
    (27,319
    )
    
    
    (30,981
    )310,667
    
    
    
    300,467Senior Secured Notes:Senior secured notes
    
    
    2,209,426
    
    
    
    2,209,426Unamortized discount
    
    
    (25,727
    )
    
    
    (155,364
    )2,183,699
    
    
    
    2,054,062Total notes payable
    
    
    2,494,366
    
    
    
    2,354,529Less current portion of notes payable
    
    
    2,183,699
    
    
    
    2,054,062Notes payable, net of current portion
    
    $
    310,667
    
    
    $
    300,467
 8




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(5) DERIVATIVE INSTRUMENTS
    (6) FAIR VALUES OF ASSETS AND LIABILITIES
 Fair Value Measurements
      9




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##### 



Assets and Liabilities Measured at Fair Value on a Recurring Basis
  March 31, 2009Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Fair ValueLiabilities:Warrants
    
    $
    
    
    
    $
    1,331,551
    
    
    $
    
    
    
    $
    1,331,551
  (7) SERIES A CONVERTIBLE PREFERRED STOCK
  Series A Preferred Stock Exchange
  Series A-1 Preferred Stock and Warrant Financing
  Series A-2 Preferred Stock and Warrant Financing
   10




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(8) COMMON STOCK
  Exercise of Stock Purchase Warrants
  Grant of Restricted Stock and Cancellation of Options
  11




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##### 



(9) STOCK OPTION PLANS
     Share-Based Compensation
   12




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##### 



2009
    
    2008Risk-free interest rate
    
    
    2.71  2.89%
    
    
    
    3.45%Expected dividend yield
    
    
    
    
    
    
    Expected term (employee / director grants)
    
    
    6.75 years
    
    
    
    6 yearsForfeiture rate (excluding fully vested options)
    
    
    11%  33%
    
    
    
    11%Expected volatility
    
    
    152.68  152.68%
    
    
    
    156%
  Weighted-Weighted-
    
    AverageAverage
    
    Remaining
    
    AggregateExercise
    
    Contractual
    
    IntrinsicOptions
    
    Shares
    
    Price
    
    Term
    
    ValueOutstanding at January 1, 2009
    
    
    3,944,530
    
    
    $
    1.87Granted
    
    
    345,000
    
    
    $
    0.44Exercised
    
    
    
    
    
    
    Forfeited or expired
    
    
    (1,250,000
    )
    
    $
    2.39Outstanding at March 31, 2009
    
    
    3,039,530
    
    
    $
    0.89
    
    
    8.68 years
    
    $
    94,350Exercisable at March 31, 2009
    
    
    1,981,649
    
    
    $
    1.04
    
    
    8.52  years
    
    $
    78,934
   Repricing of Certain Nonqualified Stock Options
  Restricted Stock Grants
  13




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##### 



Weighted-AverageGrant-DateNonvested Shares
    
    Shares
    
    
    Fair ValueNonvested at January 1, 2009
    
    
    3,750
    
    
    $
    1.77Granted
    
    
    637,250
    
    
    
    0.40Vested
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Nonvested at March 31, 2009
    
    
    641,000
    
    
    $
    0.40Vested at March 31, 2009
    
    
    289,125
    
    
    $
    1.74
  Grant of Restricted Stock to Officers and Certain Employees
  (10) WARRANTS
  Number ofShares
    
    
    Exercise
    
    
    Date ofExercisable
    
    
    Price
    
    
    ExpirationIssued to investors and placement agent in private placement
    
    
    118,620
    
    
    $
    24.50
    
    
    
    12/8/2009Issued to investor in former subsidiary
    
    
    15,000
    
    
    $
    50.00
    
    
    
    2/23/2010Issued to investors and placement agent in private placement
    
    
    476,830
    
    
    $
    5.80
    
    
    
    3/7/2011Issued to investors in private placement
    
    
    536,250
    
    
    $
    0.21
    
    
    
    1/30/2014Issued to investors and placement agent in private placement
    
    
    599,250
    
    
    $
    1.38
    
    
    
    6/15-7/16/2012Issued to financial advisor
    
    
    6,000
    
    
    $
    1.58
    
    
    
    7/25/2012Issued to financial advisor
    
    
    54,000
    
    
    $
    0.55
    
    
    
    1/30/2014Issued to financial advisor in connection with an acquisition
    
    
    80,750
    
    
    $
    2.18
    
    
    
    9/14/2012Issued to financial advisor in connection with an acquisition
    
    
    344,250
    
    
    $
    0.55
    
    
    
    1/30/2014Issued to financial advisor
    
    
    39,978
    
    
    $
    1.49
    
    
    
    2/11/2013Issued to financial advisor
    
    
    135,035
    
    
    $
    0.55
    
    
    
    1/30/2014Issued to Senior Convertible Note holders
    
    
    849,059
    
    
    $
    1.00
    
    
    
    2/11/2013Issued to Secured Note holders
    
    
    688,300
    
    
    $
    1.89
    
    
    
    3/14/2013Issued to financial advisor
    
    
    26,833
    
    
    $
    0.55
    
    
    
    1/30/2014Issued to Senior Convertible Note holders
    
    
    153,912
    
    
    $
    1.00
    
    
    
    9/30/2013Issued to investors in private placement
    
    
    268,333
    
    
    $
    1.50
    
    
    
    10/28/2013-10/31/2013Issued to investors in private placement
    
    
    70,000
    
    
    $
    0.75
    
    
    
    3/6-3/13/2014Issued to vendor
    
    
    50,000
    
    
    $
    0.70
    
    
    
    3/2/2012Issued to vendor
    
    
    60,000
    
    
    $
    0.60
    
    
    
    3/15/2014Total
    
    
    4,572,400Weighted average exercise price
    
    
    
    
    
    $
    2.35Weighted average duration in years
    
    
    
    
    
    
    
    
    
    3. 82 years
 14




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##### 



Issuances of Warrants to Service Providers
   Issuance of Warrants for Financing
  Re-pricing of Warrants to Financial Advisor and Affiliates
   (11) SUBSEQUENT EVENTS
 Series A-2 Preferred Stock and Warrant Financing and Amended Agreement
   Extension of Maturity Date for Senior Secured Notes
  15




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##### 



Re-pricing of Warrants to Investor
  Grant of Restricted Stock to Employee
  
 ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 The following discussion of our consolidated financial condition and results of operations
should be read in conjunction with the financial statements and the related notes thereto included
in the Companys Form 10-K for the year ended December 31, 2008 and elsewhere in this Form 10-Q .
The matters discussed herein contain forward-looking statements within the meaning of Section 21E
of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Section 27A of the
Securities Act of 1933, as amended, which involve risks and uncertainties. All statements other
than statements of historical information provided herein may be deemed to be forward-looking
statements. Without limiting the foregoing, the words believes, anticipates, plans, expects
and similar expressions are intended to identify forward-looking statements. The factors that could
cause actual future results to differ materially from current expectations include, but are not
limited to, risks related to regulatory approvals and the success of our ongoing studies, including
the efficacy of our Symphony tCGM System, the failure of future development and preliminary
marketing efforts related to our tCGM system, risks and uncertainties relating to our ability to
develop, market and sell diagnostic products based on our skin permeation platform technologies,
including the Prelude SkinPrep System, the availability of substantial additional equity or debt
capital to support our research, development and product commercialization activities, the success
of our research, development, and regulatory approval, marketing and distribution plans and
strategies, including those plans and strategies related to our tCGM System and those discussed in
Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and
elsewhere in this report and the risks discussed in our other filings with the SEC. Readers are
cautioned not to place undue reliance on these forward-looking statements, which reflect
managements analysis, judgment, belief or expectation only as of the date hereof. We undertake no
obligation to publicly revise these forward-looking statements to reflect events or circumstances
that arise after the date hereof.
 Overview
  16




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##### 



Operating Plan
     Research and Development
  17




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##### 



Critical Accounting Policies and Estimates
    Results of Operations
    Comparison of the quarters ended March 31, 2009 and 2008
 Research and Development Expenses
 18




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##### 



Selling, General and Administrative Expenses
 Other Income (Expense)
 Interest Expense 
 Three months endedMarch 31,
    
    March 31,
    
    IncreaseNote Payable Obligation
    
    2009
    
    2008
    
    (Decrease)Senior promissory bridge notes
    
    $
    
    
    
    $
    197,000
    
    
    $
    (197,000
    )Senior convertible notes
    
    
    16,000
    
    
    
    72,000
    
    
    
    (56,000
    )Senior secured notes
    
    
    162,000
    
    
    
    10,000
    
    
    
    152,000Other short-term financing
    
    
    1,000
    
    
    
    1,000
    
    
    
    Total notes payable
    
    $
    179,000
    
    
    $
    280,000
    
    
    $
    (101,000
    )Non-cash Interest included above
    
    $
    177,000
    
    
    $
    255,000
    
    
    $
    (78,000
    )
  Derivative Loss
 19




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##### 



Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Companys Own Stock.
 Loss on Extinguishment of Debt Debtors Accounting for a Modification or Exchange of Debt Instruments,
 Net Loss
 Liquidity and Capital Resources
        20




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##### 




    
    our ability to obtain funding from third parties, including any future collaborative
partners, on reasonable terms;
    
    our progress on research and development programs;
    
    the time and costs required to gain regulatory approvals;
    
    the costs of manufacturing, marketing and distributing our products, if successfully
developed and approved;
    
    the costs of filing, prosecuting and enforcing patents, patent applications, patent
claims and trademarks;
    
    the status of competing products; and
    
    the market acceptance and third-party reimbursement of our products, if successfully
developed and approved.
 Series A-2 Preferred Stock and Warrant Financing
 21




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##### 



22




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##### 



Off-Balance Sheet Arrangements
  Effect of Inflation and Changes in Prices
  
 Item 4T. Controls and Procedures.
 Disclosure Controls and Procedures
  Internal Control over Financial Reporting
  
 PART IIOTHER INFORMATION
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
   
 Item 5. Other Information.
  23




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##### 



Item 6. Exhibits.
  
 SIGNATURES
  ECHO THERAPEUTICS, INC.Date:  May 15, 2009
    By:
    /s/ Patrick T. Mooney, M.D.Patrick T. Mooney, M.D.Chief Executive Officer and Chairman of the BoardBy:
    /s/ Harry G. Mitchell, CPAHarry G. Mitchell, CPAChief Operating Officer, Chief Financial Officer
and Treasurer 24




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EXHIBIT INDEX
 Exhibit No.
    
    Item.4.1
    
    Form of Warrant to Purchase Common Stock is incorporated herein by reference to Exhibit 4.1 of the
Companys Current Report on Form 8-K dated April 14, 2009.4.2
    
    Form of Restricted Stock Agreement is incorporated herein by reference to Exhibit 10.2 to the
Companys Current Report on Form 8-K dated May 20, 2008.10.1
    
    Letter agreement between the Company and Burnham Hill Partners LLC dated January 30, 2009 is
incorporated herein by reference to Exhibit 10.1 to the
Companys Current Report on Form 8-K dated
January 30, 2009.10.2
    
    Letter agreement between the Company and Imperium Master Fund, Ltd. dated March 23, 2009 is
incorporated herein by reference to Exhibit 10.1 to the
Companys Current Report on Form 8-K dated
March 23, 2009.10.3
    
    Amended and Restated Stock and Warrant Purchase Agreement by and among the Company and the Investors
named therein, dated as of April 2, 2009, is incorporated herein by reference to Exhibit 10.1 of the
Companys Current Report on Form 8-K dated April 14, 2009.10.4
    
    Letter agreement between the Company and Imperium Master Fund, Ltd. dated April 23, 2009 is
incorporated herein by reference to Exhibit 10.1 to the
Companys Current Report on Form 8-K dated
April 24, 2009.31.1
    
    Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Chief Operating Officer, Chief Financial Officer and Treasurer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Chief Operating Officer, Chief Financial Officer and Treasurer pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
    
    Certificate of Designation, Rights and Preferences of Series A-2 Preferred Stock is incorporated
herein by reference to Exhibit 99.1 of the Companys Current Report on Form 8-K dated April 14, 2009.
 25