##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    Quarterly Report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Quarterly Period Ended December 31, 2010
 o
    
    Transition Report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Transition Period from ______ to ______.
 Commission File No. 001-32632
 UROPLASTY, INC.
  Minnesota, U.S.A.
(State or other jurisdiction of 
incorporation or organization)
    
    41-1719250
(I.R.S. Employer
Identification No.)
 5420 Feltl Road
Minnetonka, Minnesota, 55343
 (952) 426-6140
 þ o
 o o
  Large Accelerated Filer o
    
    Accelerated Filer o
    
    Non-Accelerated Filer o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company þ
 o þ




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Table of Contents
 INDEX
 UROPLASTY INC. AND SUBSIDIARIES
 PART I. FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    3Condensed Consolidated Balance Sheets
    
    
    3Condensed Consolidated Statements of Operations
    
    
    5Condensed Consolidated Statement of Shareholders Equity and Comprehensive Loss
    
    
    6Condensed Consolidated Statements of Cash Flows
    
    
    7Notes to the Condensed Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    22Item 4. Controls and Procedures
    
    
    22PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    22Item 1A. Risk Factors
    
    
    22Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    22Item 3. Defaults upon Senior Securities
    
    
    22Item 4. (Removed and Reserved)
    
    
    22Item 5. Other Information
    
    
    22Item 6. Exhibits
    
    
    22SIGNATURES
    
    
    23Certifications by the Chief Executive Officer and the Chief Financial Officer pursuant to Section 302Certifications by the Chief Executive Officer and the Chief Financial Officer pursuant to Section 906EX-31.1EX-32.1EX-99.1
  Page 2




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PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 UROPLASTY, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)
 December 31, 2010
    
    
    March 31, 2010AssetsCurrent assets:Cash and cash equivalents
    
    $
    5,044,741
    
    
    $
    2,311,269Short-term investments
    
    
    9,777,894
    
    
    
    3,500,000Accounts receivable, net
    
    
    1,547,665
    
    
    
    1,287,440Inventories
    
    
    592,181
    
    
    
    341,497Income tax receivable
    
    
    
    
    
    
    23,820Other
    
    
    308,137
    
    
    
    237,321Total current assets
    
    
    17,270,618
    
    
    
    7,701,347Property, plant, and equipment, net
    
    
    1,133,179
    
    
    
    1,230,771Intangible assets, net
    
    
    1,911,887
    
    
    
    2,533,095Long-term investments
    
    
    6,009,337
    
    
    
    Deferred tax assets
    
    
    112,907
    
    
    
    108,530Total assets
    
    $
    26,437,928
    
    
    $
    11,573,743
  Page 3




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UROPLASTY, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 December 31, 2010
    
    
    March 31, 2010Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    489,093
    
    
    $
    485,594Current portion  deferred rent
    
    
    35,000
    
    
    
    35,000Income tax payable
    
    
    12,487
    
    
    
    10,000Accrued liabilities:Compensation
    
    
    1,476,238
    
    
    
    903,057Other
    
    
    251,455
    
    
    
    212,028Total current liabilities
    
    
    2,264,273
    
    
    
    1,645,679Deferred rent  less current portion
    
    
    86,079
    
    
    
    112,500Accrued pension liability
    
    
    578,262
    
    
    
    601,037Total liabilities
    
    
    2,928,614
    
    
    
    2,359,216Commitments and Contingencies
    
    
    
    
    
    
    Shareholders equity:Common stock $.01 par value; 40,000,000
shares authorized, 20,634,332 and
14,946,540 shares issued and
outstanding at December 31, 2010 and
March 31, 2010, respectively
    
    
    206,343
    
    
    
    149,465Additional paid-in capital
    
    
    53,794,136
    
    
    
    36,178,126Accumulated deficit
    
    
    (29,937,072
    )
    
    
    (26,617,161
    )Accumulated other comprehensive loss
    
    
    (554,093
    )
    
    
    (495,903
    )Total shareholders equity
    
    
    23,509,314
    
    
    
    9,214,527Total liabilities and shareholders equity
    
    $
    26,437,928
    
    
    $
    11,573,743
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UROPLASTY, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedDecember 31
    
    
    December 312010
    
    
    2009
    
    
    2010
    
    
    2009Net sales
    
    $
    3,492,067
    
    
    $
    3,068,142
    
    
    $
    9,772,389
    
    
    $
    8,880,546Cost of goods sold
    
    
    604,566
    
    
    
    505,399
    
    
    
    1,709,731
    
    
    
    1,592,443Gross profit
    
    
    2,887,501
    
    
    
    2,562,743
    
    
    
    8,062,658
    
    
    
    7,288,103Operating expensesGeneral and administrative
    
    
    861,183
    
    
    
    639,608
    
    
    
    2,608,868
    
    
    
    2,201,199Research and development
    
    
    423,794
    
    
    
    401,481
    
    
    
    1,296,431
    
    
    
    1,365,194Selling and marketing
    
    
    2,871,456
    
    
    
    1,702,900
    
    
    
    6,877,402
    
    
    
    5,728,242Amortization
    
    
    211,058
    
    
    
    211,189
    
    
    
    632,508
    
    
    
    634,5054,367,491
    
    
    
    2,955,178
    
    
    
    11,415,209
    
    
    
    9,929,140Operating loss
    
    
    (1,479,990
    )
    
    
    (392,435
    )
    
    
    (3,352,551
    )
    
    
    (2,641,037
    )Other income (expense)Interest income
    
    
    21,135
    
    
    
    21,468
    
    
    
    52,762
    
    
    
    77,097Interest expense
    
    
    (652
    )
    
    
    (1,291
    )
    
    
    (4,537
    )
    
    
    (10,986
    )Foreign currency exchange gain (loss)
    
    
    503
    
    
    
    (8,335
    )
    
    
    12,867
    
    
    
    (23,030
    )Other, net
    
    
    
    
    
    
    
    
    
    
    (192
    )
    
    
    (183
    )20,986
    
    
    
    11,842
    
    
    
    60,900
    
    
    
    42,898Loss before income taxes
    
    
    (1,459,004
    )
    
    
    (380,593
    )
    
    
    (3,291,651
    )
    
    
    (2,598,139
    )Income tax expense
    
    
    8,927
    
    
    
    6,143
    
    
    
    28,260
    
    
    
    29,030Net loss
    
    $
    (1,467,931
    )
    
    $
    (386,736
    )
    
    $
    (3,319,911
    )
    
    $
    (2,627,169
    )Basic and diluted loss per common share
    
    $
    (0.07
    )
    
    $
    (0.03
    )
    
    $
    (0.18
    )
    
    $
    (0.18
    )Weighted average common shares
outstanding:Basic and diluted
    
    
    20,514,530
    
    
    
    14,946,540
    
    
    
    18,314,157
    
    
    
    14,943,638
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UROPLASTY, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERSEQUITY AND COMPREHENSIVE LOSS
 Nine Months Ended December 31, 2010
(Unaudited)
 AccumulatedAdditional
    
    
    Accumulated
    
    
    Other
    
    
    TotalCommon Stock
    
    
    Paid-in
    
    
    Accumulated
    
    
    Comprehensive
    
    
    ShareholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    Loss
    
    
    EquityBalance at March 31, 2010
    
    
    14,946,540
    
    
    $
    149,465
    
    
    $
    36,178,126
    
    
    $
    (26,617,161
    )
    
    $
    (495,903
    )
    
    $
    9,214,527Proceeds from public
offering, net of costs
of $1,182,941
    
    
    4,600,000
    
    
    
    46,000
    
    
    
    14,871,059
    
    
    
    
    
    
    
    
    
    
    
    14,917,059Share-based consulting
and compensation
    
    
    72,900
    
    
    
    729
    
    
    
    288,093
    
    
    
    
    
    
    
    
    
    
    
    288,822Proceeds from exercise
of warrants
    
    
    886,000
    
    
    
    8,860
    
    
    
    2,190,322
    
    
    
    
    
    
    
    
    
    
    
    2,199,182Proceeds from exercise
of stock options, net of
1,608 shares returned
for payment of related
income taxes
    
    
    128,892
    
    
    
    1,289
    
    
    
    266,536
    
    
    
    
    
    
    
    
    
    
    
    267,825Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,319,911
    )
    
    
    (58,190
    )
    
    
    (3,378,101
    )Balance at December 31,
2010
    
    
    20,634,332
    
    
    $
    206,343
    
    
    $
    53,794,136
    
    
    $
    (29,937,072
    )
    
    $
    (554,093
    )
    
    $
    23,509,314
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UROPLASTY, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
 Nine Months EndedDecember 312010
    
    
    2009Cash flows from operating activities:Net loss
    
    $
    (3,319,911
    )
    
    $
    (2,627,169
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    848,385
    
    
    
    852,370Loss on disposal of equipment
    
    
    192
    
    
    
    183Amortization of premium on marketable securities
    
    
    7,226
    
    
    
    Share-based consulting expense
    
    
    9,739
    
    
    
    Share-based compensation expense
    
    
    279,083
    
    
    
    356,583Deferred income taxes
    
    
    (5,863
    )
    
    
    (5,299
    )Deferred rent
    
    
    (26,421
    )
    
    
    (26,250
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    (261,136
    )
    
    
    71,404Inventories
    
    
    (248,656
    )
    
    
    112,460Other current assets and income tax receivable
    
    
    (48,492
    )
    
    
    (44,238
    )Accounts payable
    
    
    4,474
    
    
    
    (324,094
    )Accrued liabilities
    
    
    610,710
    
    
    
    (221,266
    )Accrued pension liability, net and income tax payable
    
    
    (10,783
    )
    
    
    (20,141
    )Net cash used in operating activities
    
    
    (2,161,453
    )
    
    
    (1,875,457
    )Cash flows from investing activities:Proceeds from maturity of marketable securities
    
    
    4,000,000
    
    
    
    3,000,000Purchases of marketable securities
    
    
    (16,311,352
    )
    
    
    (2,000,000
    )Purchases of property, plant and equipment
    
    
    (128,935
    )
    
    
    (70,354
    )Purchase of intangible assets
    
    
    (11,300
    )
    
    
    Proceeds from sale of property, plant and equipment
    
    
    
    
    
    
    2,000Net cash (used in) provided by investing activities
    
    
    (12,451,587
    )
    
    
    931,646Cash flows from financing activities:Net proceeds from public offering of common stock
    
    
    14,917,059
    
    
    
    Net proceeds from exercise of warrants and options
    
    
    2,467,007
    
    
    
    Net cash provided by financing activities
    
    
    17,384,066
    
    
    
    Effect of exchange rates on cash and cash equivalents
    
    
    (37,554
    )
    
    
    70,644Net increase (decrease) in cash and cash equivalents
    
    
    2,733,472
    
    
    
    (873,167
    )Cash and cash equivalents at beginning of period
    
    
    2,311,269
    
    
    
    3,276,299Cash and cash equivalents at end of period
    
    $
    5,044,741
    
    
    $
    2,403,132Supplemental disclosure of cash flow information:Cash paid during the period for interest
    
    $
    
    
    
    $
    6,145Cash paid during the period for income taxes
    
    
    9,633
    
    
    
    121,655
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UROPLASTY, INC. AND SUBSIDIARIES
 
 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 1. Basis of Presentation
    2. Cash Equivalents and Marketable Securities
     Page 8




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Amortized Cost
    
    
    Unrealized Gains
    
    
    Unrealized Losses
    
    
    Fair ValueShort-term investments:U.S. Government
and Agency debt
securities
    
    $
    5,282,014
    
    
    $
    
    
    
    $
    4,120
    
    
    $
    5,277,894Long-term investments:U.S. Government
and Agency debt
securities
    
    
    6,022,112
    
    
    
    
    
    
    
    12,775
    
    
    
    6,009,337Total
    
    $
    11,304,126
    
    
    $
    
    
    
    $
    16,895
    
    
    $
    11,287,231
  3. Fair Value Measurements
    
    
    Quoted prices for similar assets or liabilities in active markets;
    
    Quoted prices for identical or similar assets in non-active markets;
    
    Inputs other than quoted prices that are observable for the asset or liability; and
    
    Inputs that are derived principally from or corroborated by other observable market
data.
    Quoted Pricesin ActiveMarkets for
    
    
    Significant Other
    
    
    SignificantIdentical
    
    
    Observable
    
    
    UnobservableAssets
    
    
    Inputs
    
    
    InputsAsset Class
    
    Fair Value
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Cash equivalents:Money market funds
    
    $
    3,840,022
    
    
    $
    3,840,022
    
    
    $
    
    
    
    $
    Short-term investments:Certificates of deposit
    
    
    4,500,000
    
    
    
    4,500,000
    
    
    
    
    
    
    
    U.S.
Government and Agency
debt securities
    
    
    5,276,868
    
    
    
    499,540
    
    
    
    4,777,328
    
    
    
    Long-term investments:U.S. Government and
Agency debt securities
    
    
    6,010,363
    
    
    
    
    
    
    
    6,010,363
    
    
    
    Pension plan assets:Vested Benefit
Obligation
(Netherlands Plan)
    
    
    1,252,104
    
    
    
    
    
    
    
    
    
    
    
    1,252,104Deposit Administration
Contract (U.K. Plan)
    
    
    476,784
    
    
    
    
    
    
    
    476,784
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Money market funds.
 Certificates of deposit.
 U.S. Government and U.S. Government Agency debt securities.
 Pension assets.
   4. Accounts Receivable
  5. Inventories
  Page 10




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December 31, 2010
    
    
    March 31, 2010Raw materials
    
    $
    204,048
    
    
    $
    158,942Work-in-process
    
    
    37,928
    
    
    
    28,935Finished goods
    
    
    350,205
    
    
    
    153,620$
    592,181
    
    
    $
    341,497
 6. Intangible Assets
  Grosscarrying
    
    
    Accumulatedamount
    
    
    amortization
    
    
    Net valueDecember 31, 2010
    
    $
    5,510,102
    
    
    $
    3,598,215
    
    
    $
    1,911,887March 31, 2010
    
    $
    5,472,512
    
    
    $
    2,939,417
    
    
    $
    2,533,095
  Remainder of 2011
    
    
    
    
    
    
    
    
    
    $
    211,0002012
    
    
    
    
    
    
    
    
    
    
    844,0002013
    
    
    
    
    
    
    
    
    
    
    844,0002014
    
    
    
    
    
    
    
    
    
    
    6,0002015 and beyond
    
    
    
    
    
    
    
    
    
    
    7,000$
    1,912,000
 7. Deferred Rent and Leasehold Improvements
  8. Comprehensive Loss
  Three Months Ended
    
    
    Nine Months EndedDecember 31
    
    
    December 312010
    
    
    2009
    
    
    2010
    
    
    2009Net loss
    
    $
    (1,467,931
    )
    
    $
    (386,736
    )
    
    $
    (3,319,911
    )
    
    $
    (2,627,169
    )Items of other comprehensive
income (loss):Translation adjustment
    
    
    (39,155
    )
    
    
    (30,808
    )
    
    
    (39,657
    )
    
    
    145,259Unrealized loss on
available for sale
investments
    
    
    (16,895
    )
    
    
    
    
    
    
    (16,895
    )
    
    
    Pension related
    
    
    9,334
    
    
    
    1,475
    
    
    
    (1,638
    )
    
    
    (3,242
    )Comprehensive loss
    
    $
    (1,514,647
    )
    
    $
    (416,069
    )
    
    $
    (3,378,101
    )
    
    $
    (2,485,152
    )
 Page 11




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9. Net Loss per Common Share
  Number of unvestedrestricted stock/
    
    Range ofoptions/warrants
    
    exercise pricesDecember 31, 2010
    
    
    2,155,200

    
    $0.71 to $5.64December 31, 2009
    
    
    4,141,928

    
    $0.71 to $5.19
 10. Credit Facilities
  11. Warrants
  WeightedaverageNumber of
    
    
    exerciseshares
    
    
    priceOutstanding at March 31, 2010
    
    
    2,066,928
    
    
    $
    3.78Warrants expired
    
    
    (1,180,928
    )
    
    
    4.75Warrants exercised
    
    
    (886,000
    )
    
    
    2.49Outstanding at December 31, 2010
    
    
    
  12. Share-based Compensation
   Page 12




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Nine Months Ended
    
    
    Nine Months EndedDecember 31, 2010
    
    
    December 31, 2009Expected life in years
    
    
    5.33
    
    
    
    4.83Risk-free interest rate
    
    
    1.76
    %
    
    
    2.74
    %Expected volatility
    
    
    90.89
    %
    
    
    94.21
    %Expected dividend yield
    
    
    0
    
    
    
    0Weighted-average fair value
    
    $
    3.45
    
    
    $
    0.60
   Weighted
    
    
    Weightedaverage
    
    
    average
    
    
    AggregateNumber of
    
    
    exercise
    
    
    remaining
    
    
    intrinsicshares
    
    
    price
    
    
    life in years
    
    
    valueOutstanding at March 31, 2010
    
    
    2,037,500
    
    
    $
    3.14
    
    
    
    4.00
    
    
    $
    506,000Options granted
    
    
    215,300
    
    
    
    4.88Options exercised
    
    
    (130,500
    )
    
    
    2.11Options surrendered
    
    
    (40,000
    )
    
    
    4.02Outstanding at December 31, 2010
    
    
    2,082,300
    
    
    $
    3.36
    
    
    
    3.81
    
    
    $
    2,208,000Exercisable at December 31, 2010
    
    
    1,769,498
    
    
    $
    3.33
    
    
    
    3.51
    
    
    $
    1,883,000
   Weighted
    
    
    Weightedaverage
    
    
    average
    
    
    AggregateNumber of
    
    
    grant date
    
    
    remaining
    
    
    intrinsicShares
    
    
    fair value
    
    
    life in years
    
    
    valueBalance at March 31, 2010
    
    
    Shares granted
    
    
    72,900
    
    
    $
    4.76Shares vested
    
    
    
    
    
    
    Balance at December 31, 2010
    
    
    72,900
    
    
    $
    4.76
    
    
    
    1.45
    
    
    $
    347,000
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13. Savings and Retirement Plans
    Three Months Ended
    
    
    Nine Months EndedDecember 31
    
    
    December 312010
    
    
    2009
    
    
    2010
    
    
    2009Gross service cost
    
    $
    24,614
    
    
    $
    16,692
    
    
    $
    71,076
    
    
    $
    48,278Interest cost
    
    
    29,136
    
    
    
    24,152
    
    
    
    84,404
    
    
    
    70,205Expected return on assets
    
    
    (12,746
    )
    
    
    1,579
    
    
    
    (37,026
    )
    
    
    4,188Amortization
    
    
    4,285
    
    
    
    (117
    )
    
    
    12,481
    
    
    
    (337
    )Net periodic retirement cost
    
    $
    45,289
    
    
    $
    42,306
    
    
    $
    130,935
    
    
    $
    122,334
  Nine Months EndedDecember 312010
    
    
    2009Discount rate
    
    
    4.70-5.50
    %
    
    
    6.60-6.70
    %Expected return on assets
    
    
    4.70-5.00
    %
    
    
    5.00-6.60
    %Expected rate of increase
in future compensation:General
    
    
    3.00
    %
    
    
    3.00
    %Individual
    
    
    0.00-3.00
    %
    
    
    0.00-3.00
    %
  14. Equity Offering
  Page 14




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15. Foreign Currency Translation
   16. Business Segment Information
   All OtherUnited
    
    
    United
    
    
    ForeignStates
    
    
    Kingdom
    
    
    Countries
    
    
    ConsolidatedThree months ended
December 31, 2010
    
    $
    2,010,062
    
    
    $
    379,356
    
    
    $
    1,102,649
    
    
    $
    3,492,067Three months ended
December 31, 2009
    
    $
    1,514,489
    
    
    $
    372,701
    
    
    $
    1,180,952
    
    
    $
    3,068,142Nine Months Ended
December 31, 2010
    
    $
    5,475,888
    
    
    $
    1,115,749
    
    
    $
    3,180,752
    
    
    $
    9,772,389Nine Months Ended
December 31, 2009
    
    $
    4,477,944
    
    
    $
    1,156,412
    
    
    $
    3,246,190
    
    
    $
    8,880,546
  United
    
    
    United
    
    
    TheStates
    
    
    Kingdom
    
    
    Netherlands
    
    
    Consolidated$
    473,102
    
    
    $
    2,282
    
    
    $
    657,795
    
    
    $
    1,133,179
  17. Income Tax Expense
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##### Table of Contents



18. Recently Issued Accounting Standards
 Fair Value Measurements and Disclosures : Improving Disclosures about Fair
Value Measurements
 19. Subsequent events
  
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 We recommend that you read this Report on Form 10-Q in conjunction with our Annual Report on Form
10-K for the year ended March 31, 2010.
 Forward-looking Statements
 Page 16




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##### Table of Contents



Critical Accounting Policies
   Overview
 ® ®
    Page 17




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##### Table of Contents



Results of Operations
 Three and nine months ended December 31, 2010 compared to three and nine months ended December 31,
2009
 Net Sales
      Page 18




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##### Table of Contents



Gross Profit
 General and Administrative Expenses (G&A):
 Research and Development Expenses (R&D):
 Selling and Marketing Expenses (S&M):
 Amortization of Intangibles
 Other Income (Expense):
  Page 19
    Table of Contents    Income Tax Expense
 Non-GAAP Financial Measures
   Three Months Ended
    
    
    Nine Months EndedDecember 31
    
    
    December 312010
    
    
    2009
    
    
    2010
    
    
    2009Gross ProfitGAAP gross profit
    
    $
    2,887,501
    
    
    $
    2,562,743
    
    
    $
    8,062,658
    
    
    $
    7,288,103% of sales
    
    
    83
    %
    
    
    84
    %
    
    
    83
    %
    
    
    82
    %Share-based compensation
    
    
    4,184
    
    
    
    4,771
    
    
    
    12,851
    
    
    
    23,218Depreciation expense
    
    
    12,007
    
    
    
    14,481
    
    
    
    43,470
    
    
    
    42,780Non-GAAP gross profit
    
    
    2,903,692
    
    
    
    2,581,995
    
    
    
    8,118,979
    
    
    
    7,354,101Operating ExpensesGAAP operating expenses
    
    
    4,367,491
    
    
    
    2,955,178
    
    
    
    11,415,209
    
    
    
    9,929,140Share-based compensation
    
    
    135,947
    
    
    
    60,351
    
    
    
    275,971
    
    
    
    333,365Depreciation expense
    
    
    57,745
    
    
    
    59,462
    
    
    
    172,407
    
    
    
    175,085Amortization expense
    
    
    211,057
    
    
    
    211,189
    
    
    
    632,508
    
    
    
    634,505Non-GAAP operating expenses
    
    
    3,962,742
    
    
    
    2,624,176
    
    
    
    10,334,323
    
    
    
    8,786,185Operating LossGAAP operating loss
    
    
    (1,479,990
    )
    
    
    (392,435
    )
    
    
    (3,352,551
    )
    
    
    (2,641,037
    )Share-based compensation
    
    
    140,131
    
    
    
    65,122
    
    
    
    288,822
    
    
    
    356,583Depreciation expense
    
    
    69,752
    
    
    
    73,943
    
    
    
    215,877
    
    
    
    217,865Amortization expense
    
    
    211,057
    
    
    
    211,189
    
    
    
    632,508
    
    
    
    634,505Non-GAAP operating loss
    
    
    ($1,059,050
    )
    
    
    ($42,181
    )
    
    
    ($2,215,344
    )
    
    
    ($1,432,084
    )
 Page 20




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##### Table of Contents



Liquidity and Capital Resources
 Cash Flows
     Sources of Liquidity
    Commitments and Contingencies.
   Page 21




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Internal Control Over Financial Reporting.
  
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. (REMOVED AND RESERVED)
 
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
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SIGNATURES
  UROPLASTY, INC.Date:  January 27, 2011
    By:
    /s/ DAVID B. KAYSENDavid B. KaysenPresident and Chief Executive OfficerDate: January 27, 2011
    By:
    /s/ MAHEDI A. JIWANIMahedi A. JiwaniChief Financial Officer Page 23