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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB



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|x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------

For the quarterly period ended June 30, 2007

or



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- | ---------------------------------------------------------------

Commission file number: 000-51487



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MICROMED CARDIOVASCULAR, INC.

(Exact name of small business issuer as
specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 90-0265161                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

8965 Interchange Drive

Houston, Texas 77054

(Address of principal executive offices)

(713) 838-9210

(Issuers
telephone number)



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Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.    YES  x    NO ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act).    YES ̈NO  x

Transitional Small Business Disclosure Format (Check one):    YES ̈NO  x

On August 8, 2007, there were outstanding 40,079,208 shares of the Registrants Common Stock, $0.001 par value.



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##### Table of Contents

MICROMED CARDIOVASCULAR, INC.

TABLE OF CONTENTS



|                                                                                                                                                                            |  |         
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------
|                                                                                                                                                                            |  | Page No.
|PART I. FINANCIAL INFORMATION                                                                                                                                               |  | 3       
|                                                                                                                                                                            | 
|Item 1. Financial Statements (Unaudited)                                                                                                                                    |  | 3       
|                                                                                                                                                                            | 
|Consolidated Balance Sheets as of December 31, 2006 and June 30, 2007                                                                                                       |  | 3       
|Consolidated Statements of Operations for the period October 6, 1995 (date of inception) to June 30, 2007, and the three months and six months ended June 30, 2007 and 2006 |  | 4       
|Consolidated Statements of Cash Flows for the period October 6, 1995 (date of inception) to June 30, 2007, and the six months ended June 30, 2007 and 2006                  |  | 5       
|Notes to Consolidated Financial Statements                                                                                                                                  |  | 6       
|                                                                                                                                                                            | 
|Item 2. Managements Discussion and Analysis or Plan of Operation                                                                                                           |  | 12      
|                                                                                                                                                                            | 
|Item 3. Controls and Procedures                                                                                                                                             |  | 17      
|                                                                                                                                                                            | 
|PART II. OTHER INFORMATION                                                                                                                                                  |  | 19      
|                                                                                                                                                                            | 
|Item 4. Submission of Matters to a Vote of Security Holders                                                                                                                 |  | 19      
|                                                                                                                                                                            | 
|Item 5. Other Information                                                                                                                                                   |  | 19      
|                                                                                                                                                                            | 
|Item 6. Exhibits                                                                                                                                                            |  | 19      
|                                                                                                                                                                            | 
|SIGNATURES                                                                                                                                                                  |  | 19      
|                                                                                                                                                                            | 
|Certifications pursuant to Section 13a-14                                                                                                                                   |  |         
|                                                                                                                                                                            | 
|Certifications pursuant to U.S.C. Section 906                                                                                                                               |  |         



2



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##### Table of Contents

PART I. FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

MICROMED CARDIOVASCULAR, INC.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                                                                                                                          |  |               |             |   |                  |   |             |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | - | ---------------- | - | ----------- | -
|                                                                                                                                                                                                                                                          |  | June 30, 2007 |             |   | December 31,2006 |  
|                                                                                                                                                                                                                                                          |  | (Unaudited)   |             |   |                  |  
|ASSETS                                                                                                                                                                                                                                                    |  |               |             |   |                  |   |             |  
|Current assets:                                                                                                                                                                                                                                           |  |               |             |   |                  |   |             |  
|Cash and cash equivalents                                                                                                                                                                                                                                 |  | $             | 5,835,856   |   |                  | $ | 9,830,273   |  
|Accounts receivable, net of allowance for doubtful accounts of $0 and $186,685, respectively                                                                                                                                                              |  |               | 390,105     |   |                  |   | 531,204     |  
|Inventory                                                                                                                                                                                                                                                 |  |               | 2,806,247   |   |                  |   | 2,858,002   |  
|Prepaids and other assets                                                                                                                                                                                                                                 |  |               | 245,342     |   |                  |   | 271,116     |  
|                                                                                                                                                                                                                                                          |  |               |             |   |                  |   |             |  
|Total current assets                                                                                                                                                                                                                                      |  |               | 9,277,550   |   |                  |   | 13,490,595  |  
|Property and equipment, net                                                                                                                                                                                                                               |  |               | 462,703     |   |                  |   | 384,925     |  
|Other assets                                                                                                                                                                                                                                              |  |               | 15,282      |   |                  |   | 13,085      |  
|                                                                                                                                                                                                                                                          |  |               |             |   |                  |   |             |  
|Total assets                                                                                                                                                                                                                                              |  | $             | 9,755,535   |   |                  | $ | 13,888,605  |  
|                                                                                                                                                                                                                                                          |  |               |             |   |                  |   |             |  
|                                                                                                                                                                                                                                                          |  |              
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                                                                      |  |               |             |   |                  |   |             |  
|Current liabilities:                                                                                                                                                                                                                                      |  |               |             |   |                  |   |             |  
|Accounts payable                                                                                                                                                                                                                                          |  | $             | 217,644     |   |                  | $ | 219,245     |  
|Accrued liabilities                                                                                                                                                                                                                                       |  |               | 757,179     |   |                  |   | 1,068,727   |  
|Deferred revenue                                                                                                                                                                                                                                          |  |               | 175,500     |   |                  |   | 175,500     |  
|Current portion of long-term debt                                                                                                                                                                                                                         |  |               | 43,328      |   |                  |   | 420,956     |  
|Note payable                                                                                                                                                                                                                                              |  |               | 182,135     |   |                  |   | 182,389     |  
|                                                                                                                                                                                                                                                          |  |               |             |   |                  |   |             |  
|Total current liabilities                                                                                                                                                                                                                                 |  |               | 1,375,786   |   |                  |   | 2,066,817   |  
|Long-term debt                                                                                                                                                                                                                                            |  |               | 94,730      |   |                  |   |            |  
|Commitments and Contingencies                                                                                                                                                                                                                             |  |               |            |   |                  |   |            |  
|                                                                                                                                                                                                                                                          |  |               |             |   |                  |   |             |  
|Total Liabilities                                                                                                                                                                                                                                         |  |               | 1,470,516   |   |                  |   | 2,066,817   |  
|                                                                                                                                                                                                                                                          |  |               |             |   |                  |   |             |  
|                                                                                                                                                                                                                                                          |  |              
|Stockholders Equity:                                                                                                                                                                                                                                     |  |               |             |   |                  |   |             |  
|Common Stock, $.001 par value, 100,000,000 shares authorized, 40,129,712 shares issued and 40,079,208 shares outstanding at June 30,
2007; 100,000,000 shares authorized, 39,952,404 shares issued and 39,915,402 shares outstanding at December 31, 2006 |  |               | 40,080      |   |                  |   | 39,916      |  
|Additional paid-in capital                                                                                                                                                                                                                                |  |               | 105,945,358 |   |                  |   | 105,377,592 |  
|Accumulated other comprehensive income                                                                                                                                                                                                                    |  |               | 1,163       |   |                  |   |            |  
|Deficit accumulated during development stage                                                                                                                                                                                                              |  |               | (97,701,582 | ) |                  |   | (93,595,720 | )
|                                                                                                                                                                                                                                                          |  |               |             |   |                  |   |             |  
|Total stockholders equity                                                                                                                                                                                                                                |  |               | 8,285,019   |   |                  |   | 11,821,788  |  
|                                                                                                                                                                                                                                                          |  |               |             |   |                  |   |             |  
|Total liabilities and stockholders equity                                                                                                                                                                                                                |  | $             | 9,755,535   |   |                  | $ | 13,888,605  |  
|                                                                                                                                                                                                                                                          |  |               |             |   |                  |   |             |  

The accompanying notes are an integral part of these financial statements.



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##### Table of Contents

MICROMED CARDIOVASCULAR, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



|                                                                      |  |                             |            |   |                           |   |            |                                                      |  |   |            |   |  |      |            |   |  |   |             |  
|--------------------------------------------------------------------- |  | --------------------------- | ---------- | - | ------------------------- | - | ---------- | ---------------------------------------------------- |  | - | ---------- | - |  | ---- | ---------- | - |  | - | ----------- | -
|                                                                      |  | Three Months Ended June 30, |            |   | Six Months Ended June 30, |   |            | Period fromInception(October 6,1995) ThroughJune 30, | 
|                                                                      |  | 2007                        |            |   | 2006                      |   |            | 2007                                                 |  |   | 2006       |   |  | 2007 |           
|Revenues:                                                             |  |                             |            |   |                           |   |            |                                                      |  |   |            |   |  |      |            |   |  |   |             |  
|Clinical reimbursements                                               |  | $                           | 176,462    |   |                           | $ | 199,504    |                                                      |  | $ | 188,645    |   |  | $    | 815,179    |   |  | $ | 17,591,874  |  
|International product sales                                           |  |                             | 342,233    |   |                           |   | 698,327    |                                                      |  |   | 957,609    |   |  |      | 1,178,695  |   |  |   | 10,389,353  |  
|                                                                      |  |                             |            |   |                           |   |            |                                                      |  |   |            |   |  |      |            |   |  |   |             |  
|Total revenues                                                        |  |                             | 518,695    |   |                           |   | 897,831    |                                                      |  |   | 1,146,254  |   |  |      | 1,993,874  |   |  |   | 27,981,227  |  
|                                                                      |  |                             |            |   |                          
|Expenses:                                                             |  |                             |            |   |                           |   |            |                                                      |  |   |            |   |  |      |            |   |  |   |             |  
|Research and development                                              |  |                             | 1,920,699  |   |                           |   | 2,523,196  |                                                      |  |   | 4,026,818  |   |  |      | 3,998,560  |   |  |   | 80,715,458  |  
|General and administrative                                            |  |                             | 669,843    |   |                           |   | 618,312    |                                                      |  |   | 1,436,763  |   |  |      | 1,212,268  |   |  |   | 24,008,618  |  
|                                                                      |  |                             |            |   |                           |   |            |                                                      |  |   |            |   |  |      |            |   |  |   |             |  
|Total operating expenses                                              |  |                             | 2,590,542  |   |                           |   | 3,141,508  |                                                      |  |   | 5,463,581  |   |  |      | 5,210,828  |   |  |   | 104,724,076 |  
|                                                                      |  |                             |            |   |                          
|Loss from operations                                                  |  |                             | (2,071,847 | ) |                           |   | (2,243,677 | )                                                    |  |   | (4,317,327 | ) |  |      | (3,216,954 | ) |  |   | (76,742,849 | )
|Interest income                                                       |  |                             | 91,346     |   |                           |   | 21,694     |                                                      |  |   | 207,938    |   |  |      | 54,290     |   |  |   | 2,161,607   |  
|                                                                      |  |                             |            |   |                          
|Interest expense                                                      |  |                             | (4,630     | ) |                           |   | (43,805    | )                                                    |  |   | (18,225    | ) |  |      | (102,239   | ) |  |   | (1,293,146  | )
|Other income                                                          |  |                             | 14,234     |   |                           |   |           |                                                      |  |   | 21,752     |   |  |      |           |   |  |   | 41,245      |  
|                                                                      |  |                             |            |   |                           |   |            |                                                      |  |   |            |   |  |      |            |   |  |   |             |  
|Net loss                                                              |  |                             | (1,970,897 | ) |                           |   | (2,265,788 | )                                                    |  |   | (4,105,862 | ) |  |      | (3,264,903 | ) |  |   | (75,833,143 | )
|Convertible preferred stock dividends and accretion                   |  |                             |           |   |                           |   |           |                                                      |  |   |           |   |  |      |           |   |  |   | (22,327,217 | )
|                                                                      |  |                             |            |   |                           |   |            |                                                      |  |   |            |   |  |      |            |   |  |   |             |  
|Net loss available to common stockholders                             |  | $                           | (1,970,897 | ) |                           | $ | (2,265,788 | )                                                    |  | $ | (4,105,862 | ) |  | $    | (3,264,903 | ) |  |   | (98,160,360 | )
|                                                                      |  |                             |            |   |                           |   |            |                                                      |  |   |            |   |  |      |            |   |  |   |             |  
|                                                                      |  |                             |            |   |                          
|Basic and diluted net loss per share available to Common stockholders |  | $                           | (0.05      | ) |                           | $ | (0.07      | )                                                    |  | $ | (0.10      | ) |  | $    | (0.11      | ) |  |   |             |  
|                                                                      |  |                             |            |   |                           |   |            |                                                      |  |   |            |   |  |      |            |   |  |   |             |  
|                                                                      |  |                             |            |   |                          
|Weighted average common shares outstanding                            |  |                             | 40,079,187 |   |                           |   | 30,646,643 |                                                      |  |   | 40,007,041 |   |  |      | 29,287,867 |   |  |   |             |  
|                                                                      |  |                             |            |   |                           |   |            |                                                      |  |   |            |   |  |      |            |   |  |   |             |  

The accompanying notes are an integral part of these financial statements.



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MICROMED CARDIOVASCULAR, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                                                               |  |                           |            |   |                                                      |   |            |      |  |   |             |  
|-------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ---------- | - | ---------------------------------------------------- | - | ---------- | ---- |  | - | ----------- | -
|                                                                                                               |  | Six Months Ended June 30, |            |   | Period fromInception(October 6,1995) ThroughJune 30, |  
|                                                                                                               |  | 2007                      |            |   | 2006                                                 |   |            | 2007 | 
|Cash flows from operating activities:                                                                          |  |                           |            |   |                                                      |   |            |      |  |   |             |  
|Net loss                                                                                                       |  | $                         | (4,105,862 | ) |                                                      | $ | (3,264,903 | )    |  | $ | (75,833,143 | )
|Adjustments to reconcile net loss to net cash used in operating activities:                                    |  |                           |            |   |                                                      |   |            |      |  |   |             |  
|Depreciation and amortization                                                                                  |  |                           | 112,368    |   |                                                      |   | 112,906    |      |  |   | 2,925,055   |  
|Conversion of accrued interest on Series C and Series D Preferred                                              |  |                           |           |   |                                                      |   |           |      |  |   | 346,866     |  
|Services contributed by stockholders                                                                           |  |                           |           |   |                                                      |   |           |      |  |   | 300,050     |  
|Issuance of stock/warrants/options to non-employees                                                            |  |                           |           |   |                                                      |   | 29,710     |      |  |   | 140,741     |  
|Employee and consultant stock based compensation                                                               |  |                           | 560,306    |   |                                                      |   | 1,096,026  |      |  |   | 2,262,144   |  
|Amortization of deferred compensation                                                                          |  |                           |           |   |                                                      |   |           |      |  |   | 310,179     |  
|Amortization of warrants                                                                                       |  |                           | 7,174      |   |                                                      |   | 33,304     |      |  |   | 115,923     |  
|Effect of exchange rate changes on cash and cash equivalents                                                   |  |                           | 1,163      |   |                                                      |   |           |      |  |   | 1,163       |  
|(Gain) loss on disposal of fixed assets                                                                        |  |                           |           |   |                                                      |   |           |      |  |   | (6,586      | )
|Bad debt expense                                                                                               |  |                           |           |   |                                                      |   |           |      |  |   | 186,685     |  
|Changes in assets and liabilities:                                                                             |  |                           |            |   |                                                      |   |            |      |  |   |             |  
|Accounts receivable                                                                                            |  |                           | 141,099    |   |                                                      |   | (164,164   | )    |  |   | (576,789    | )
|Inventory                                                                                                      |  |                           | 51,755     |   |                                                      |   | 38,004     |      |  |   | (2,984,972  | )
|Prepaids and other assets                                                                                      |  |                           | 23,576     |   |                                                      |   | 75,831     |      |  |   | (353,336    | )
|Accounts payable and accrued liabilities                                                                       |  |                           | (313,149   | ) |                                                      |   | (251,020   | )    |  |   | 1,193,468   |  
|                                                                                                               |  |                           |            |   |                                                      |   |            |      |  |   |             |  
|Net cash used in operating activities                                                                          |  |                           | (3,521,570 | ) |                                                      |   | (2,294,306 | )    |  |   | (71,972,552 | )
|                                                                                                               |  |                           |           
|Cash flows from investing activities:                                                                          |  |                           |            |   |                                                      |   |            |      |  |   |             |  
|Purchase of property and equipment                                                                             |  |                           | (190,145   | ) |                                                      |   | (16,066    | )    |  |   | (3,142,437  | )
|                                                                                                               |  |                           |            |   |                                                      |   |            |      |  |   |             |  
|Net cash used in investing activities                                                                          |  |                           | (190,145   | ) |                                                      |   | (16,066    | )    |  |   | (3,142,437  | )
|                                                                                                               |  |                           |           
|Cash flows from financing activities:                                                                          |  |                           |            |   |                                                      |   |            |      |  |   |             |  
|Proceeds from bridge loan from stockholders                                                                    |  |                           |           |   |                                                      |   |           |      |  |   | 16,458,987  |  
|Repayments of bridge loans from stockholders                                                                   |  |                           |           |   |                                                      |   |           |      |  |   | (2,015,986  | )
|Proceeds from issuance of notes payable                                                                        |  |                           | 340,880    |   |                                                      |   | 734,893    |      |  |   | 9,769,306   |  
|Repayments of notes payable                                                                                    |  |                           | (624,032   | ) |                                                      |   | (1,326,135 | )    |  |   | (9,342,256  | )
|Proceeds from issuance of warrants and preferred stock, net of offering costs                                  |  |                           |           |   |                                                      |   |           |      |  |   | 43,398,728  |  
|Proceeds from issuance of common stock and options and cash contributed by stockholders, net of offering costs |  |                           | 450        |   |                                                      |   | 13,780,000 |      |  |   | 22,682,066  |  
|                                                                                                               |  |                           |            |   |                                                      |   |            |      |  |   |             |  
|Net cash (used in) provided by financing activities                                                            |  |                           | (282,702   | ) |                                                      |   | 13,188,758 |      |  |   | 80,950,845  |  
|Change in cash and cash equivalents                                                                            |  |                           | (3,994,417 | ) |                                                      |   | 10,878,386 |      |  |   | 5,835,856   |  
|Beginning cash and cash equivalents                                                                            |  |                           | 9,830,273  |   |                                                      |   | 2,871,071  |      |  |   |            |  
|                                                                                                               |  |                           |            |   |                                                      |   |            |      |  |   |             |  
|Ending cash and cash equivalents                                                                               |  | $                         | 5,835,856  |   |                                                      | $ | 13,749,457 |      |  | $ | 5,835,856   |  
|                                                                                                               |  |                           |            |   |                                                      |   |            |      |  |   |             |  

The accompanying notes are an integral part of these financial statements.



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MICROMED CARDIOVASCULAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

The accompanying unaudited consolidated financial statements of MicroMed Cardiovascular, Inc. (referred to herein as the
Company, MicroMed, us, or we), have been prepared on a going concern basis in accordance with U.S. generally accepted accounting principles for interim financial information and pursuant to the rules
and regulations of the Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and footnotes required by U.S. accounting principles generally accepted for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 2007 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2007. The accompanying consolidated financial statements include the accounts of MicroMed and its subsidiaries, MicroMed Technology, Inc. (MicroMed Technology) and
MicroMed Cardiovascular Europe GmbH, a Swiss subsidiary established on March 29, 2007. Intercompany transactions and accounts are eliminated in consolidation. For further information regarding the basis of presentation, refer to the
consolidated financial statements and footnotes thereto included in MicroMeds Annual Report on Form 10-KSB for the year ended December 31, 2006, as filed with the SEC.

Net loss per share is computed using the weighted average number of shares of common stock outstanding during the applicable period. Shares associated
with stock options and warrants were not included because they are antidilutive. There are no differences between basic and diluted net loss per share for all periods presented.

2. Going Concern

The accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. Since inception, the Company has incurred substantial expenses for research and product development and has not yet generated significant revenues from commercial sales. As of June 30, 2007, the
Company had an accumulated deficit of approximately $98 million. Because of its losses, the Company will require additional working capital to develop its business operations. The Company will need to seek additional working capital through
private placements, public offerings or bank financing. The Company will need to seek additional funds within the next 6-12 months from public and private stock offerings, borrowings under credit lines or other sources to finance our future cash
needs. The Company cannot be certain that additional capital will be available on favorable terms, or at all. If adequate funds are unavailable, the Company may be required to scale back or discontinue its product development program or clinical
trials, or obtain funds through strategic alliances that may require the Company to relinquish rights to certain of its technologies.

There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations or (2) obtain additional financing through either private placements, public
offerings or bank financing necessary to support the Companys working capital requirements. To the extent that funds generated from any private placements, public offerings or bank financing are insufficient, the Company will have to raise
additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the company.

These conditions raise substantial doubt about the Companys ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary should the Company be unable to
continue as a going concern.

3. Significant Accounting Policies

Comprehensive Income

The Company utilizes Statement of Financial Accounting Standards
(SFAS) No. 130, Reporting Comprehensive Income. This statement establishes standards for reporting comprehensive income and its components in a financial statement. Comprehensive income, as defined, includes all
changes in equity (net assets) during a period from non-owner sources. Examples of items to be included in comprehensive income, which are excluded from net income, include foreign currency translation adjustments and unrealized gains and losses on
available-for-sale securities.

Foreign Currency Translations

All assets and liabilities of our non-U.S. operations are translated into U.S. dollars at the period-end exchange rates and the resulting translation adjustments are included in comprehensive income. The period-end
translation of the non-functional currency assets and liabilities at the period-end exchange rates result in foreign currency gains and losses, which are included in Other Income.



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##### Table of Contents

Income Taxes

In July 2006, the Financial Accounting Standard Board (FASB) issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxesan Interpretation of FASB Statement No. 109(FIN 48).
FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income
Taxes. FIN 48 prescribes a recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company adopted the provisions of FIN
48 effective January 1, 2007. See Note 9 for further information regarding the effects of adopting FIN 48.

Recently Issued Accounting
Pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157), which
defines fair value, provides a framework for measuring fair value, and expands the disclosures required for fair value measurements. SFAS 157 applies to all accounting pronouncements that require fair value measurements. It does not require any new
fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007. Accordingly, the Company will adopt SFAS 157 commencing in the first quarter of 2008. The Company is currently assessing the potential impact of
SFAS 157 on its consolidated financial statements.

In February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial
Assets and LiabilitiesIncluding an amendment of FASB Statement No. 115(SFAS 159).SFAS 159 permits entities to choose to measure certain financial assets and liabilities at fair value. Unrealized gains and losses,
arising subsequent to adoption, are reported in earnings. SFAS 159 is effective for fiscal years beginning after November 15, 2007. Accordingly, the Company will adopt SFAS 159 commencing in the first quarter of 2008. The Company is currently
assessing the impact of SFAS 159 on its consolidated financial statements.

4. Equity

Common Stock

As of June 30, 2007, the Company had 40,079,208 outstanding shares of common
stock, options to purchase 1,826,094 shares of common stock and warrants to purchase 4,816,244 shares of common stock.

Warrants

On March 20, 2007, the placement agent for our August 2005 Private Placement and its affiliates exercised warrants to purchase 150,000 shares of
common stock obtained in the August 2005 Private Placement in a cashless exercise transaction pursuant to the terms of the warrants, resulting in the issuance of 132,311 shares of common stock.

5. Options

The 1997 Stock Option Plan (the
1997 Plan) initially provided for the granting of options, either incentive or non-statutory, to purchase up to 1,266,500 shares of our common stock. In February 2001, the 1997 Plan was amended to increase the number of shares that could
be issued pursuant to the 1997 Plan to 3,266,500 shares. In September 2002, the 1997 Plan was amended to increase the number of shares that could be issued pursuant to the 1997 Plan to 7,103,689 shares. The 1997 Plan provides that stock options be
granted at fair market value on the date the option is granted, as determined by the board of directors.

Prior to the closing of the
reverse merger of MicroMed Technology, Inc. into a subsidiary of Salmon Express, Inc., following which Salmon Express, Inc. was renamed MicroMed Cardiovascular, Inc., our Board of Directors and stockholders adopted the MicroMed Technology, Inc. 2005
Stock Incentive Plan (the 2005 Stock Incentive Plan). The 2005 Stock Incentive Plan was assumed by the Company in connection with the Merger. The 2005 Stock Incentive Plan provides for the grant of up to 2,189,147 shares of common stock
pursuant to incentive stock options, nonqualified stock options, stock appreciation rights, common stock and units representing the right to receive shares of common stock under certain circumstances (Stock Awards) and other restricted
stock awards and stock units for employees, non-employee directors, consultants and advisors.

On June 13, 2006, the Board of
Directors amended the 2005 Stock Incentive Plan to increase the maximum number of shares of common stock issuable pursuant to awards granted under the Plan to 6,729,147 shares of common stock, all of which may be available for incentive stock
options. The amendment was approved by the stockholders at the annual meeting held on May 31, 2007.

Incentive stock options may not
be granted at less than the fair market value of our common stock at the date of grant. The options can be exercisable at various dates, as determined by the Board of Directors, or a committee designated by the Board of Directors (the
Committee), and will expire no more than 10 years from the date of grant. Stock appreciation rights



7



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of a term of no more than 10 years and stock awards may be granted by the Board of Directors, or the Committee, with terms, conditions and limitations to be
decided by the Board of Directors or the Committee. Options, stock appreciation rights and stock awards may be granted to consultants and non-employee directors, with terms, conditions and limitations to be decided by the Board of Directors or the
Committee. Options granted under the 2005 Stock Incentive Plan are restricted as to transfer and may contain provisions relating to a change of control and various means of payment upon exercise. While grant documentation will govern the expiration
and vesting of the various types of grants available under the 2005 Stock Incentive Plan, replacement options will expire on the earlier of the 10th anniversary of the grant date, and with respect to any exercisable portion of the grant, the
expiration of 90 days following termination of employment for reasons other than death, disability or cause, the first anniversary of termination by reason of death or disability, the date of the termination of employment for cause and the date of
termination for any reason.

The Company records the fair value of options issued to non-employee consultants at the fair value of the
options issued. Any expense is recognized over the service period or at the date of issuance if the options are fully vested and no performance obligation exists.

Options to purchase 140,000 shares of common stock were granted to certain employees on March 7, 2007 at the fair market value on the date of grant. The options vest 25% on the date of grant and 25% at each of
the next three anniversary dates of the date of grant.

Options to purchase 70,000 shares of common stock were granted to certain employees
on April 6, 2007 at the fair market value on the date of grant. The options vest 25% on the date of grant and 25% at each of the next three anniversary dates of the date of grant.

On March 21, 2007, certain employees, a non-employee director, and a non-employee consultant exercised in cashless exercise transactions, vested
options previously granted on August 10, 2005. To cover employee and non-employee minimum statutory withholding taxes related to this exercise of options, the Company withheld 13,526 shares of common stock at the then fair market value.

For the three months ended June 30, 2007 and 2006, we recorded $184,000 and $1,022,000 of stock-based compensation expense,
respectively. For the six months ended June 30, 2007 and 2006, we recorded $458,000 and $1,096,000 of stock-based compensation expense, respectively. Stock-based compensation for all non-vested options outstanding as of June 30, 2007 was
$2.1 million, which will be recognized over a weighted-average period of 2.6 years. Stock-based compensation for all non-vested options outstanding as of June 30, 2006, was $4.8 million, which were recognized over a weighted-average period of
2.33 years. We amortize stock-based compensation expense on a straight-line basis over the expected life of the vesting period. Based on historical data, the Company calculated a 15.0% and 12.0% estimated forfeiture rate at June 30, 2007 and
2006, respectively. To the extent actual forfeitures differ from our current estimates, cumulative adjustments to stock-based compensation expense will be recorded in the period estimates are revised.

The Company estimated the fair value of stock options granted during the three and six months ended June 30, 2007 using the Black-Scholes option
pricing model. The assumptions used under this model are as follows:



|                                          |  |                                 |   |  |                               |  
|----------------------------------------- |  | ------------------------------- | - |  | ----------------------------- | -
|                                          |  | Three Months endedJune 30, 2007 |   |  | Six Months endedJune 30, 2007 |  
|Expected dividend yield                   |  | 0                               | % |  | 0                             | %
|Expected volatility                       |  | 103-130                         | % |  | 60-130                        | %
|Weighted-average expected life (in years) |  | 7                               |   |  | 7                             |  
|Risk-free interest rate                   |  | 4.00-4.38                       | % |  | 4.08-4.38                     | %

The following table summarizes stock option activity for the six months ended June 30, 2007:



|                               |  |                 |   |  |                               |      |                                         |     |                         |          
|------------------------------ |  | --------------- | - |  | ----------------------------- | ---- | --------------------------------------- | --- | ----------------------- | ---------
|                               |  | Number ofShares |   |  | WeightedAverage ExercisePrice |      | WeightedAverageRemainingContractualLife |     | AggregateIntrinsicValue
|Outstanding, December 31, 2006 |  | 2,729,685       |   |  | $                             | 1.43 |                                         |     |                         |          
|Granted                        |  | 210,000         |   |  |                               | 2.30 |                                         |     |                         |          
|Forfeited                      |  | (1,068,591      | ) |  |                               | 1.57 |                                         |     |                         |          
|Exercised                      |  | (45,000         | ) |  |                               | 0.01 |                                         |     |                         |          
|                               |  |                 |   |  |                               |      |                                         |     |                         |          
|Outstanding, June 30, 2007     |  | 1,826,094       |   |  | $                             | 1.48 |                                         | 9.3 |                         | 2,950,708
|                               |  |                 |   |  |                               |      |                                         |     |                         |          
|                               |  |                 |   | 
|Exercisable, June 30, 2007     |  | 549,344         |   |  | $                             | 1.50 |                                         | 8.1 |                         | 824,713  
|                               |  |                 |   |  |                               |      |                                         |     |                         |          



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##### Table of Contents

As of June 30, 2007, there were 12,006,742 options available for grant under the Plan. Options
exercisable as of June 30, 2007 were 549,344. As of June 30, 2007, the weighted average remaining contractual life for options was 9.3 years.

6. Inventory

Inventory consists of raw materials, work in progress, and finished goods. Inventory is stated at the lower of
cost or market using the first-in, first-out (FIFO) method. Cost includes the acquisition cost of raw materials and components and direct labor. A summary of inventory is as follows:



|                                  |  |              |           |                  |   |          
|--------------------------------- |  | ------------ | --------- | ---------------- | - | ---------
|                                  |  | June 30,2007 |           | December 31,2006
|                                  |  | (Unaudited)  |           |                 
|Raw materials .   |  | $            | 124,802   |                  | $ | 125,662  
|Work in progress . |  |              | 1,859,406 |                  |   | 1,945,730
|Finished goods                    |  |              | 822,039   |                  |   | 786,610  
|                                  |  |              |           |                  |   |          
|Total ..        |  | $            | 2,806,247 |                  | $ | 2,858,002
|                                  |  |              |           |                  |   |          

7. Supplemental Disclosure of Cash Flow Information

Supplemental cash flow information is summarized below:



|                                                                           |  |                               |        |                               |   |                                                              |  |   |           
|-------------------------------------------------------------------------- |  | ----------------------------- | ------ | ----------------------------- | - | ------------------------------------------------------------ |  | - | ----------
|                                                                           |  | Six Months EndedJune 30, 2007 |        | Six Months EndedJune 30, 2006 |   | Period from Inception(October 6, 1995) Through June 30, 2007
|Cash paid for interest                                                     |  | $                             | 15,430 |                               | $ | 252,337                                                      |  | $ | 586,252   
|                                                                           |  |                               |        |                               |   |                                                              |  |   |           
|                                                                           |  |                               |       
|Supplemental Disclosure of Noncash financing activity:                     |  |                               |        |                               |   |                                                              |  |   |           
|Conversion of notes payable to Series C Preferred Stock                    |  | $                             |       |                               | $ |                                                             |  | $ | 5,000,000 
|                                                                           |  |                               |        |                               |   |                                                              |  |   |           
|Conversion of notes payable to Series D Preferred Stock                    |  | $                             |       |                               | $ |                                                             |  | $ | 5,194,088 
|                                                                           |  |                               |        |                               |   |                                                              |  |   |           
|Dividends and accretion to redeemable convertible preferred stockholders   |  | $                             |       |                               | $ |                                                             |  | $ | 22,627,219
|                                                                           |  |                               |        |                               |   |                                                              |  |   |           
|Conversion of Bridge Loans from stockholders to common stock               |  | $                             |       |                               | $ |                                                             |  | $ | 4,500,001 
|                                                                           |  |                               |        |                               |   |                                                              |  |   |           
|Conversion of Preferred Stock from stockholders to common stock            |  | $                             |       |                               | $ |                                                             |  | $ | 76,164,733
|                                                                           |  |                               |        |                               |   |                                                              |  |   |           
|Issuance of options below fair market value                                |  | $                             |       |                               | $ |                                                             |  | $ | 698,540   
|                                                                           |  |                               |        |                               |   |                                                              |  |   |           
|Issuance of warrants in connection with financing                          |  | $                             |       |                               | $ | 4,173,042                                                    |  | $ | 11,511,541
|                                                                           |  |                               |        |                               |   |                                                              |  |   |           
|Issuance of common stock into escrow                                       |  | $                             |       |                               | $ |                                                             |  | $ | 1,500     
|                                                                           |  |                               |        |                               |   |                                                              |  |   |           
|Cancellation of shares in connection with Recapitalization                 |  | $                             |       |                               | $ |                                                             |  | $ | 5,077     
|                                                                           |  |                               |        |                               |   |                                                              |  |   |           
|Withholding of stock upon option exercises                                 |  | $                             | 14     |                               | $ |                                                             |  | $ | 49,195    
|                                                                           |  |                               |        |                               |   |                                                              |  |   |           
|Noncash transfer of Rental Assets from Inventory to Property and Equipment |  | $                             |       |                               | $ |                                                             |  | $ | 178,725   
|                                                                           |  |                               |        |                               |   |                                                              |  |   |           
|Exercise of Warrants                                                       |  | $                             | 132    |                               | $ | 2,711                                                        |  | $ | 4,019     
|                                                                           |  |                               |        |                               |   |                                                              |  |   |           



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8. Comprehensive Income

Comprehensive income, net of taxes, is as follows:



|                                                                                  |  |                                 |            |   |                                 |   |            |                                                           |  |   |             |  
|--------------------------------------------------------------------------------- |  | ------------------------------- | ---------- | - | ------------------------------- | - | ---------- | --------------------------------------------------------- |  | - | ----------- | -
|                                                                                  |  | Three Months EndedJune 30, 2007 |            |   | Three Months EndedJune 30, 2006 |   |            | Period fromInception(October 6,1995) ThroughJune 30, 2007 | 
|Net Loss:                                                                         |  | $                               | (1,970,897 | ) |                                 | $ | (2,265,788 | )                                                         |  | $ | (98,160,360 | )
|Other net comprehensive income (loss):                                            |  |                                 |            |   |                                 |   |            |                                                           |  |   |             |  
|Foreign currency translation adjustments (net of taxes of $0 as of June 30, 2007) |  |                                 | (1,200     | ) |                                 |   |           |                                                           |  |   | 1,163       |  
|                                                                                  |  |                                 |            |   |                                 |   |            |                                                           |  |   |             |  
|Total comprehensive income                                                        |  | $                               | (1,972,097 | ) |                                 | $ | (2,265,788 | )                                                         |  | $ | (98,159,197 | )
|                                                                                  |  |                                 |            |   |                                 |   |            |                                                           |  |   |             |  
|                                                                                  |  |                                 |           
|                                                                                  |  | Six Months EndedJune 30, 2007   |            |   | Six Months EndedJune 30, 2006   |   |            | Period fromInception(October 6,1995) ThroughJune 30, 2007 | 
|Net Loss:                                                                         |  | $                               | (4,105,862 | ) |                                 | $ | (3,264,903 | )                                                         |  | $ | (98,160,360 | )
|Other net comprehensive income (loss):                                            |  |                                 |            |   |                                 |   |            |                                                           |  |   |             |  
|Foreign currency translation adjustments (net of taxes of $0 as of June 30, 2007) |  |                                 | 1,163      |   |                                 |   |           |                                                           |  |   | 1,163       |  
|                                                                                  |  |                                 |            |   |                                 |   |            |                                                           |  |   |             |  
|Total comprehensive income                                                        |  | $                               | (4,104,699 | ) |                                 | $ | (3,264,903 | )                                                         |  | $ | (98,159,197 | )
|                                                                                  |  |                                 |            |   |                                 |   |            |                                                           |  |   |             |  



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9. Income Taxes

The Company adopted the provisions of FIN 48 effective January 1, 2007. The implementation of FIN 48 did not result in adjustment to the liability for unrecognized tax benefits, nor did it have impact on the
accumulated deficit as of January 1, 2007. As of January 1, 2007, the gross amount of unrecognized tax benefits was $26.7 million, substantially all of which would have an impact on the Companys effective tax rate if
subsequently recognized. For the six months ended June 30, 2007, the Company recognized an additional $1.2 million of unrecognized tax benefits relating to tax positions taken during the six months.

At June 30, 2007, the Company had federal and state tax net operating loss, or NOL, carryforwards of approximately $56.2 million and $11.2 million,
respectively. The Company has capitalized research and development expense of $12.9 million at June 30, 2007. The Company also had federal and state research and development, or R&D, credit carryforwards of $1.4 million and $0.3
million, respectively at June 30, 2007. The tax credits will begin to expire in 2011, unless previously utilized. We have established a valuation allowance for the full value of our federal net operating loss, federal and state research
and development credits.

Utilization of the NOL and R&D credit carryforwards may be subject to a substantial annual limitation due to
ownership change limitations that have occurred previously or that could occur in the future provided by Sections 382 and 383 of the Internal Revenue Code of 1986, as well as similar state and foreign provisions. These ownership changes may
limit the amount of NOL and R&D credit carryforwards than can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382, results from transactions increasing
the ownership of certain shareholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. Since the Companys formation, the Company has raised capital through the issuance of capital
stock which, combined with the purchasing shareholders subsequent disposition of those shares, may have resulted in a change of control, as defined by Section 382, or could result in a change of control in the future upon subsequent
disposition. The Company has not currently completed a study to assess whether a change in control has occurred or whether there have been multiple changes of control since the Companys formation due to the significant complexity and cost
associated with such study and that there could be additional changes in the future. Any limitation due to ownership change may result in expiration of a portion of the NOL or R&D credit carryforwards before utilization. Further, until
a study is completed and any limitation known, no amounts are being presented as an uncertain tax position under FIN 48. Interest and penalties related to uncertain tax positions will be reflected in income tax expense.

Texas has replaced the FTR taxes with a state margin tax effective January 1, 2007. The new Texas state margin tax will allow 2.25% per
year of the NOL to be used through September 1, 2017 and 7.75% per year to be used through 2027. Because realization of such tax benefits is uncertain, the Company has provided a 100% valuation allowance as of June 30, 2007.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, various states and foreign
jurisdiction. With few exceptions, we are subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years after 1995. Although the timing of any audits and their resolution is highly uncertain,
the Company does not believe it is reasonably possible that the unrecognized tax benefits would materially change in the next twelve months.



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|Item 2. | Managements Discussion and Analysis or Plan of Operation
|------- | ---------------------------------------------------------

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and related notes, and the other financial information included in this
quarterly report, and in our Annual Report on Form 10-KSB for the year ended December 31, 2006. With respect to this discussion, the terms MicroMed, Company, we, us, and our refer to
MicroMed Cardiovascular, Inc. and our wholly-owned subsidiaries.

Forward-Looking Statements

The forward-looking statements contained in this discussion involve risks and uncertainties. Our actual results may differ materially from those discussed
here due to factors such as, among others, limited operating history, difficulty in developing, exploiting and protecting proprietary technologies, intense competition and substantial regulation in the healthcare industry.

Our common stock is currently listed for quotation on the Over-the-Counter Bulletin Board under the symbol MMCV.

Risk Factors

For a detailed discussion of the risk
factors that should be understood by any investor contemplating investment in our stock, please refer to the section entitled, Risk Factors in our 2006 Form 10-KSB, as supplemented by the risk factors set forth below.

Going Concern

From inception through June 30,
2007, we have incurred an accumulated deficit of $98 million. For the six months ended June 30, 2007, we incurred losses in the amount of $4.1 million. We anticipate that we will continue to incur losses for the foreseeable future. Our future
revenues may never exceed operating expenses, thereby making the continued viability of our company dependent upon raising additional capital. As we have not generated positive cash flow from operations, our ability to continue operations is
dependent on our ability to either begin to generate positive cash flow from operations or our ability to raise capital from outside sources.

We have not generated positive cash flow from operations and have relied primarily on external sources of capital to fund operations. At June 30, 2007, we had approximately $5.8 million in cash and cash equivalents. Our net cash used
by operations for the six months ended June 30, 2007, was approximately $3.6 million. We will need to seek additional funds within the next 6-12 months from public and private stock offerings, borrowings under credit lines or other sources to
finance our future cash needs. We cannot be certain that additional capital will be available on favorable terms, or at all. If adequate funds are unavailable, we may be required to scale back or discontinue our product development program or
clinical trials, or obtain funds through strategic alliances that may require us to relinquish rights to certain of our technologies.

If
we are unable to raise sufficient capital from external sources to fund our operations, our ability to continue as a going concern would be uncertain.

Business Overview

We were formed in 1995 to develop the DeBakey VAD for commercial use. We have devoted substantially all
of our efforts to research and product development, and have not yet generated significant revenues from commercial sales. As of June 30, 2007, we had an accumulated deficit of approximately $98 million. We expect to continue to incur
operating losses for at least the next several years. Further, we expect operating expenses to increase as we seek U.S. regulatory clearance for the DeBakey VAD, build a technical support organization for product introduction and market development,
continue engineering and development projects, and increase administrative activities to support our planned growth.

Our operations
involve the manufacture and distribution of the DeBakey VAD. We have received regulatory approval to sell the DeBakey VAD in Europe and are involved in a clinical trial in the U.S., for which we receive reimbursements for our products from hospitals
involved in our clinical trial that are categorized as revenues. We sell our products through distributors internationally and have direct relationships with hospitals in our U.S. trial.



12



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Business Strategy

Our mission is to lead in the innovation of heart failure therapies to improve patient quality of life. Principal elements of our strategy to achieve this are as follows:



| |  |  | Continue commercialization of the DeBakey VAD in Europe and select other international markets. We received CE Mark approval for the
bridge-to-transplant indication in April 2001. We received CE Mark approval for Destination Therapy (DT) and pediatric use during the second quarter of 2004. The CE mark was renewed in April 2006 for five years, and we currently sell our products in
Austria, Italy, Sweden, France and Turkey. We anticipate expanding the sales of our products into Germany, Switzerland, England, Spain, Russia and Belgium in 2007. Because the prescribers, purchasers and end users of the DeBakey VAD are highly
concentrated (relatively few sites perform most of these complex procedures), we believe we will be able to expand market penetration with the DeBakey VAD without an extensive sales and marketing organization through limited direct sales and the use
of distributors in selected countries. We have established a distributor network to support sales and marketing in various international markets. The company has increased the sales force in Europe and opened an office in Switzerland in March 2007.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Leverage relationships to enhance clinical acceptance of the DeBakey VAD. We intend to leverage our relationships with European clinical trial
investigators, Dr. DeBakey, Dr. Noon and our investigators in the U.S. clinical trials and with cardiologists and cardiac surgeons in other major international heart centers to promote the use of the DeBakey VAD in high-volume transplant
centers around the world. We intend to augment this effort with a highly focused direct sales and marketing team, including members of senior management.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Continue marketing the DeBakey VAD Child. We received FDA HDE approval to begin marketing the DeBakey VAD Child device in the United States and CE
Mark approval to market the device in the European Union. and have begun market roll out for this limited market opportunity. To date, we have implanted a total of seven pediatric VADs under our HDE approval.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Complete U.S. Multi-Center Phase III/Pivotal Bridge-to-Transplant Clinical Trial. We initiated the pivotal phase of our US Bridge to Transplant trial
under the current protocol in April 2003. As of June 30, 2007, we have implanted 123 patients in the feasibility and pivotal phase of the bridge to transplant (BTT) trial. The trial design compares the results of non-randomized
implants of the DeBakey VAD to literature controls (published results) for the HeartMate VE device. We have periodically made certain modifications to the device that we believe may result in improved clinical results. Pending the outcomes of the
final patients in the BTT trial, we may ask the FDA to modify our clinical trial protocol to allow implantation of additional patients with the most recent version of the DeBakey VAD or we may submit the Premarket Approval Application (PMA) to the
FDA.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Initiate a new U.S. Multi-Center Phase III/Pivotal Destination Therapy Clinical Trial. Our previous destination therapy (DT) study was a
randomized trial against a single control arm (HeartMate XVE) and included a total of 360 patients. As of November 2006, we had only enrolled 12 patients in this DT study and we terminated the study due to the low enrollment rate. We are in the
process of developing a new DT study.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Explore opportunities to expand clinical indications for the DeBakey VAD to include bridge-to-recovery indication. The cardiology community is
increasingly advocating the importance of mechanical circulatory assistance for a broader subset of heart failure patients than just the bridge-to-transplant and destination therapy segments. We believe that the specific design attributes of the
DeBakey VAD make it better suited than currently marketed pulsatile VADs for broader clinical indications. We intend to use results we obtain from any clinical trial patients that have sufficiently recovered and have successfully had their VAD
removed to provide the feasibility clinical data to support a future clinical trial or an expansion of an ongoing clinical trial to expand the indications for the DeBakey VAD to include use as bridge-to-recovery. As such clinical data becomes
available, we intend to support publication of patient case study reports in appropriate medical journals by physicians.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Research and
Development

Our research and development activities have been primarily focused on the development and clinical trials of the DeBakey
VAD. Since our inception in 1995 and through June 30, 2007, we have incurred research and development costs of approximately $81 million.

Our research and development expenses consist primarily of compensation and other expenses for research and development personnel, costs associated with the clinical trials of our product candidates, facility costs, supplies and materials,
costs for consultants and related contract research and depreciation. We charge all research and development expenses to operations as they are incurred.



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In the future, the rate of spending on the DeBakey VAD system is likely to increase as additional
clinical trials are performed. At this time, due to the risks inherent in the clinical trial process and given the stage of development of our product candidates, we are unable to estimate with any certainty the costs we will incur in the continued
development of our product candidates for commercialization. However, we expect our research and development costs to be substantial and to increase as we continue the development of our current product candidates, as well as continue and expand our
research programs.

The lengthy process of seeking regulatory approvals for our product candidates, and the subsequent compliance with
applicable regulations, require the expenditure of substantial resources. Any failure by us to obtain, or any delay in obtaining, regulatory approvals could cause our research and development expenditures to increase and, in turn, have a material
adverse effect on our results of operations.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in
accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosure of
contingent assets and liabilities. We review our estimates on an on going basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following accounting policies to be critical to the judgments
and estimates used in the preparation of our financial statements:

Revenue Recognition. We recognize revenue from product sales and reimbursements
for products used in our clinical trials in the U.S. Product sales consist of sales our DeBakey VAD products and related equipment to international hospitals involved in heart transplantation, to customers with whom we have distribution agreements
in certain international markets and to hospitals in the United States (for our DeBakey VAD Child product only, which is approved for sale in the United States). Under FDA rules, we are not allowed to sell products in the United States until such
time as we receive a PMA for the products. We are allowed to receive reimbursement of expenses associated with our clinical trials, including our research and development expenses, with such reimbursements included in Revenues under the separate
heading Clinical Trial Reimbursements. Product sales and clinical trial reimbursements are recognized as revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin (SAB) No. 104, Revenue
Recognition, when persuasive evidence of an arrangement exists, fees are fixed or determinable, title has passed (generally upon shipment or implantation for certain instances in Europe), and collection is reasonably assured. We have no
post-delivery obligations nor do our product sales contain multiple elements.

Accounts Receivable. Accounts receivable represent amounts due from
customers for goods shipped. We extend various terms to our customers, with payment terms from 30 to 180 days, depending on the customer and country, and we do not require collateral.

Allowance for Doubtful Accounts. We use the allowance method to account for uncollectible accounts receivable. Our estimate is based on historical collection
experience and a review of the current status of accounts receivable.

We review our accounts receivable balances by customer for accounts greater than 180
days old and make a determination regarding the collectibility of the accounts based on specific circumstances and the payment history that exists with such customers. We also take into account our prior experience, the customers ability to
pay and an assessment of the current economic conditions in determining the net realizable value of its receivables. We also review our allowances for doubtful accounts in aggregate for adequacy following this assessment. Accordingly, we believe
that our allowances for doubtful accounts fairly represent the underlying collectibility risks associated with its accounts receivable.

Inventories. Inventory consists of raw materials, work in progress, and finished goods. Inventory is stated at the lower of cost or market using the first-in, first-out (FIFO) method. Cost includes the acquisition cost of
raw materials and components and direct labor. We periodically review our inventory for excess, obsolescence or quality issues. Should we conclude that we have inventory for which we cannot recover our costs as a result of such review, we would
record a charge to operations.

Foreign Currency Translations.All assets and liabilities of our non-U.S. operations are translated into U.S.
dollars at the period-end exchange rates and the resulting translation adjustments are included in comprehensive income. The period-end translation of the non-functional currency assets and liabilities at the period-end exchange rates result in
foreign currency gains and losses, which are included in Other Income.



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Stock-Based Compensation. We adopted FAS 123R on January 1, 2006. Prior to the adoption, we disclosed such
expenses on a pro forma basis in the notes to our financial statements. For the three and six months ended June 30, 2007, we recorded $184,000 and $458,000 of stock-based compensation expense, respectively. Stock-based compensation for all
non-vested options outstanding as of June 30, 2007, was $2.1 million, which will be recognized over a weighted-average period of 2.6 years. We amortize stock-based compensation expense on a straight-line basis over the expected life of the
vesting period. (See Note 5 Options in the Notes to Consolidated Financial Statements contained in this report.)

Results of Operations

Three Months Ended June 30, 2007 versus 2006

Revenues

Revenues were $519,000 for the three months ended June 30, 2007, as compared to revenues of $898,000 for
the same period in 2006, a decrease of $379,000, or 42%. The decrease was due to a decline in international sales revenue. International sales decreased due to competitive VADs which have gained CE approval, or are in clinical studies and providing
their product free-of-charge.

Research and Development

Research and development expenses were $1,921,000 for the three months ended June 30, 2007 versus $2,523,000 for the three months ended June 30, 2006, a decrease of $602,000 or 24%. Significant components of
the change are as follows (in thousands):



|                                 |  |                                            |       |                                            |   |         |  |   |         |   |  |     |   
|-------------------------------- |  | ------------------------------------------ | ----- | ------------------------------------------ | - | ------- |  | - | ------- | - |  | --- | --
|                                 |  | Three Months EndedJune 30, 2007(Unaudited) |       | Three Months EndedJune 30, 2006(Unaudited) |   | $Change |  |   | %Change |  
|Production                       |  | $                                          | 388   |                                            | $ | 589     |  | $ | (201    | ) |  | (34 | )%
|Engineering and development      |  |                                            | 351   |                                            |   | 317     |  |   | 34      |   |  | 11  | % 
|Quality, clinical and regulatory |  |                                            | 450   |                                            |   | 564     |  |   | (114    | ) |  | (20 | )%
|Sales and marketing              |  |                                            | 732   |                                            |   | 1,053   |  |   | (321    | ) |  | (30 | )%
|                                 |  |                                            |       |                                            |   |         |  |   |         |   |  |     |   
|Total                            |  | $                                          | 1,921 |                                            | $ | 2,523   |  | $ | (602    | ) |  | (24 | )%
|                                 |  |                                            |       |                                            |   |         |  |   |         |   |  |     |   



| |  |  | Productionexpenses decreased by 34%, which corresponds to the decrease in sales.
| | - |  | --------------------------------------------------------------------------------



| |  |  | Engineering and development expenses remained fairly constant as the number of employees was consistent in the current quarter as compared to the same period
in 2006.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Quality, clinical, and regulatory expenses consist of the expenses associated with maintaining our quality systems, the costs of our clinical trials, and the
costs associated with dealing with the FDA, as well as other regulatory agencies around the world. The decrease of 20% in expenses was primarily due to higher costs in 2006 related to recruiting and staffing activities that did not occur in 2007.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Sales and marketingexpenses decreased primarily due to decreases in compensation expenses, offset partially by increased international marketing costs
related to focused marketing efforts in the international market.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

General and Administrative

General and administrative expenses were $670,000 for the three months ended June 30, 2007 versus $618,000 for the three months ended June 30,
2006, an increase of $52,000, or 8%. The increase was primarily due to an increase for tax and audit fees of $90,000, offset by a decrease in insurance costs of $30,000 and a decrease in non-cash option expense of $12,000.

Net Loss

Net loss was $2.0 million for the
three months ended June 30, 2007 versus $2.3 million for the three months ended June 30, 2006, a decrease of $0.3 million or 13%. Net loss per share decreased to $0.05 for the three months ended June 30, 2007, from $0.07 for the same
period of 2006, primarily due to the slight decrease in the net loss and the increase in the weighted average number of shares. The increase in the weighted average number of shares outstanding is attributable to the exercise of warrants for
1,176,239 shares of common stock in August 2006, exercise of warrants for 132,311 shares of common stock in March 2007, and the exercise of options for 31,474 shares of common stock in March 2007.



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##### Table of Contents

Six Months Ended June 30, 2007 versus 2006

Revenues

Revenues were $1.1 million for the six months ended June 30, 2007, as compared to
revenues of $2.0 million for the same period in 2006, a decrease of $0.9 million, or 45%. The decrease was due to a decline of $600,000 in clinical reimbursements and a decrease of $200,000 in international sales revenue. Clinical reimbursements
declined because of a reduction in the number of sites participating in our clinical trials and the suspension of our Destination Therapy trial. International sales decreased due to increased competitive pressure.

Research and Development

Research and development
expenses were $4,027,000 for the six months ended June 30, 2007 compared to $3,999,000 for the six months ended June 30, 2006. Significant components are as follows (in thousands):



|                                 |  |                                          |       |                                          |   |         |  |   |         |   |  |     |   
|-------------------------------- |  | ---------------------------------------- | ----- | ---------------------------------------- | - | ------- |  | - | ------- | - |  | --- | --
|                                 |  | Six Months EndedJune 30, 2007(Unaudited) |       | Six Months EndedJune 30, 2006(Unaudited) |   | $Change |  |   | %Change |  
|Production                       |  | $                                        | 887   |                                          | $ | 1,061   |  | $ | (174    | ) |  | (16 | )%
|Engineering and development      |  |                                          | 683   |                                          |   | 635     |  |   | 48      |   |  | 8   | % 
|Quality, clinical and regulatory |  |                                          | 941   |                                          |   | 879     |  |   | 62      |   |  | 7   | % 
|Sales and marketing              |  |                                          | 1,516 |                                          |   | 1,424   |  |   | 92      |   |  | 6   | % 
|                                 |  |                                          |       |                                          |   |         |  |   |         |   |  |     |   
|Total                            |  | $                                        | 4,027 |                                          | $ | 3,999   |  | $ | 28      |   |  | 1   | % 
|                                 |  |                                          |       |                                          |   |         |  |   |         |   |  |     |   



| |  |  | Productionexpenses declined in connection with lower overall revenues.
| | - |  | ----------------------------------------------------------------------



| |  |  | Engineering and development expenses increased slightly due to increases in travel expenses, subcontracted services, and depreciation expense associated with
equipment purchased in 2007.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Quality, clinical, and regulatory expenses consist of the expenses associated with maintaining our quality systems, the costs of our clinical trials, and the
costs associated with dealing with the FDA, as well as other regulatory agencies around the world. The increase in expenses was primarily due to an increase in compensation expense for the first six months of 2007 as compared to the corresponding
period in 2006.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Sales and marketingexpenses increased primarily due to increased marketing efforts in the international market, including compensation, travel and marketing
efforts in China and other countries.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

General and Administrative

General and administrative expenses were $1.4 million for the six months ended June 30, 2007 versus $1.2 million for the six months ended
June 30, 2006, an increase of $0.2 million or 17%. The increase was primarily due to an increase in compensation expenses.

Net Loss

Net loss was $4.1 million for the six months ended June 30, 2007 versus $3.3 million for the six months ended June 30,
2006, an increase of $0.8 million or 24%. Net loss per share decreased to $0.10 for the six months ended June 30, 2007, from $0.11 for the same period of 2006 due to the increase in the weighted average number of shares. The increase in the
weighted average number of shares outstanding is attributable to the exercise of warrants for 1,176,239 shares of common stock in August 2006, exercise of warrants for 132,311 shares of common stock in March 2007, and the cashless exercise of
options for 31,474 shares of common stock in March 2007.

Liquidity and Capital Resources

As of June 30, 2007, cash and cash equivalents were $5.8 million. From our inception through June 30, 2007, we used approximately
$72 million in cash for our operations. We have funded our cash requirements through the private issuance of equity and debt securities and through credit facilities.

For the six months ended June 30, 2007, we used approximately $3.5 million in cash for operations principally as a result of a net loss of
$4.1 million less non cash expenses related to stock based compensation of $560,000 and depreciation and amortization of $112,000.



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##### Table of Contents

We used about $190,000 of cash in investing activities for the purchase of property and equipment. We
expect to continue to invest in our infrastructure, including property and equipment to support our operations. We anticipate that we will spend less than $100,000 on capital expenditures during the remainder of 2007.

Financing activities for the six months ended June 30, 2007 included proceeds of $341,000 from the issuance of note payables. Financing uses of cash
included repayment of notes payable of $624,000 for the six months ended June 30, 2007.

We currently occupy approximately 17,400
square feet of space under a lease which expired on May 31, 2007. This space supports our immediate operational activities. We are currently in the process of negotiating a new lease agreement for this space and are occupying the space on a
month-to-month agreement.

We expect our cash requirements to increase during the next 12 months as we expand our U.S. clinical trial
efforts, expand our technical support staff, develop our administrative support activities and expand our international marketing efforts. Additionally, if we achieve projected growth in revenues, we anticipate the need for additional investment for
working capital, capital expenditures and infrastructure. The amount and timing of cash requirements will depend on market acceptance of our products, if any, and the resources we devote to developing and supporting our products.

Historically, the company has not generated cash in amounts adequate to meet its operating needs, but has instead relied upon third-party funding We will
need to seek additional funds within the next 6-12 months from public and private stock offerings, borrowings under credit lines or other sources to finance our future cash needs. We cannot be certain that additional capital will be available on
favorable terms, or at all. If adequate funds are unavailable, we may be required to scale back or discontinue our product development program or clinical trials, or obtain funds through strategic alliances that may require us to relinquish rights
to certain of our technologies. If we are unable to arrange additional financing we may not be able to maintain our operations as a going concern. Furthermore, our liquidity could be adversely affected by the factors affecting future operating
results that are discussed in Risk Factors in our 2006 Form 10-KSB.

Off-Balance Sheet Arrangements

As of June 30, 2007, we had no off-balance sheet arrangements.



|Item 3. | Controls and Procedures
|------- | -----------------------

(a) Evaluation of disclosure controls
and procedures

In accordance with Exchange Act Rules 13a-15 and 15d-15, we carried out an evaluation, under the supervision and with
the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation,
our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of June 30, 2007, to provide reasonable assurance that information required to be disclosed in our reports
filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms.

(b) Changes in internal control over financial reporting

There has been no change in our internal controls over financial reporting that occurred during the three months ended June 30, 2007, that has materially affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.

(c) Inherent Limitations on Controls and Procedures

Our management, including the Chief Executive Officer, does not expect that internal controls will prevent all error and all fraud. A control system, no
matter how well designed and operated, can only provide reasonable assurances that the objectives of the control system are met. The design of a control system reflects resource constraints; the benefits of controls must be considered relative to
their costs. Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been or will be detected. As these
inherent limitations are known features of the financial reporting process, it is possible to design into the process safeguards to reduce, though not eliminate, these risks. These inherent limitations include the realities that judgments in
decision-making can be faulty and that breakdowns occur because of simple error or mistake. Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design
of any system of controls is based in part upon certain assumptions about



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##### Table of Contents

the likelihood of future events. While our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives,
there can be no assurance that any design will succeed in achieving its stated goals under all future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with the
policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

We intend to review and evaluate the design and effectiveness of our disclosure controls and procedures on an ongoing basis and to improve our controls and procedures over time and to correct any deficiencies that we
may discover in the future. While our Chief Executive Officer has concluded that, as of June 30, 2007, the design of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act, was effective, future events
affecting our business may cause us to significantly modify our disclosure controls and procedures.



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##### Table of Contents

PART II. OTHER INFORMATION



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

At the annual meeting of stockholders on May 31, 2007, the following proposals were voted upon. Percentages are based on the total of the shares voted For and Against.



|                                                                  |  |                |  |      |   |  |               
|----------------------------------------------------------------- |  | -------------- |  | ---- | - |  | --------------
|Concerning election of directors                                 
|                                                                  |  |                | 
|Nominees                                                          |  | Votes Cast For |  |      |   |  | Votes Withheld
|Matt Borenzewig                                                   |  | 27,547,971     |  | 89.5 | % |  | 2,000,992     
|Norwick B.H. Goodspeed                                            |  | 27,547,971     |  | 89.5 | % |  | 2,000,992     
|Clifford zur Nieden                                               |  | 27,547,971     |  | 89.5 | % |  | 2,000,992     
|                                                                 
|Concerning an amendment to the MicroMed 2005 Stock Incentive Plan
|Votes cast For:                                                   |  | 26,062,650     |  | 85.7 | % |  |               
|Votes cast Against:                                               |  | 1,960          |  | 0.01 | % |  |               
|Abstentions:                                                      |  | 2,003,503      |  | 6.5  | % |  |               
|Broker Non-votes:                                                 |  | 16,255         |  | 0.1  | % |  |               
|                                                                 
|Concerning Ratification of Independent Auditors                  
|Votes cast For:                                                   |  | 27,547,993     |  | 89.5 | % |  |               
|Votes cast Against:                                               |  | 0              |  | 0    | % |  |               
|Abstentions:                                                      |  | 2,000,970      |  | 6.5  | % |  |               
|Broker Non-votes:                                                 |  | 1,497,105      |  | 4.9  | % |  |               



|Item 5. | Other Information
|------- | -----------------

On August
10, 2007, Pamela Westbrook resigned from the Board of Directors of MicroMed Cardiovascular, Inc. Ms. Westbrook served on the Audit Committee of the Board of Directors. Ms. Westbrook informed MicroMed that her resignation is not based on any
disagreement with the company on any matter relating to the companys operations, policies or practices.



|Item 6. | Exhibits
|------- | --------



|     |  |                                                                                                                                                                                         
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of the Chief Executive Officer and Principal Financial Officer pursuant to Section 13a-14 of the Securities Exchange Act .                                                
|     | 
|32.1 |  | Certification of the Chief Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
..

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.



MICROMED CARDIOVASCULAR, INC.By:

/s/ Robert J. BenkowskiName:

Robert J. BenkowskiTitle:

Chief Executive Officer and Principal Financial Officer


Date: August 14, 2007



19