##### 



Exhibit 13
  UROPLASTY,
    INC. AND SUBSIDIARIES
  Index to
    Consolidated Financial Statements
 March 31,
    2008 and 2007
  TABLE OF
    CONTENTS
   
 Page(s)Reports of Independent Registered Public Accounting Firms


F-2Financial Statements:Consolidated Balance Sheets


F-4Consolidated Statements of Operations


F-6Consolidated Statements of Shareholders
    Equity and Comprehensive
    Loss


F-7Consolidated Statements of Cash Flows


F-8Notes to Consolidated Financial Statements


F-9   F-1




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM              
  
 F-2




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
              
    F-3




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##### Table of Contents



UROPLASTY,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
 March 31,
    2008 and 2007
  2008


2007AssetsCurrent assets:Cash and cash equivalents


$3,880,044



$3,763,702Short-term investments


6,266,037



3,000,000Accounts receivable, net


2,318,604



1,240,141Income tax receivable


50,841



113,304Inventories


558,657



823,601Other


244,517



272,035Total current assets


13,318,700



9,212,783Property, plant, and equipment, net


1,638,953



1,431,749Intangible assets, net


4,200,890



308,093Prepaid pension asset


26,482



-Deferred tax assets


105,298



93,819Total assets


$19,290,323



$11,046,444    F-4




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##### Table of Contents



UROPLASTY,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
 March 31,
    2008 and 2007
  2008


2007Liabilities and Shareholders EquityCurrent liabilities:Current maturities  long-term debt


$84,879



$78,431Deferred rent  current


35,000



35,000Accounts payable


661,624



544,507Accrued liabilities:Compensation


1,471,950



887,253Restructuring reserve


-



221,259Other


486,480



239,158Total current liabilities


2,739,933



2,005,608Long-term debt  less current maturities


413,279



427,382Deferred rent  less current portion


180,979



214,381Accrued pension liability


353,411



596,026Total liabilities


3,687,602



3,243,397Commitments and Contingencies


-



-Shareholders equity:Common stock $.01 par value; 40,000,000 shares authorized,
    14,916,540 and 11,614,330 shares issued and outstanding at
    March 31, 2008 and 2007, respectively


149,165



116,143Additional paid-in capital


35,014,313



23,996,818Accumulated deficit


(19,835,230
)


(16,010,990
)Accumulated other comprehensive 
    income (loss)


274,473



(298,924
)Total shareholders equity


15,602,721



7,803,047Total liabilities and shareholders equity


$19,290,323



$11,046,444    F-5




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##### Table of Contents



UROPLASTY,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 Years ended
    March 31, 2008 and 2007
  2008


2007Net sales


$13,855,811



$8,311,001Cost of goods sold


2,935,135



2,590,535Gross profit


10,920,676



5,720,466Operating expensesGeneral and administrative


3,692,678



3,095,989Research and development


1,798,062



2,276,526Selling and marketing


8,515,598



5,216,765Amortization


843,533



103,51114,849,871



10,692,791Operating loss


(3,929,195
)


(4,972,325
)Other income (expense)Interest income


312,162



119,534Interest expense


(35,266
)


(38,096
)Warrant expense






(29,068
)Foreign currency exchange gain (loss)


(117,990
)


26,610Other, net


1,513



62,791160,419



141,771Loss before income taxes


(3,768,776
)


(4,830,554
)Income tax expense


55,464



146,336Net loss


$(3,824,240
)


$(4,976,890
)Basic and diluted loss per common share


$(0.28
)


$(0.58
)Weighted average common shares outstanding:Basic and diluted


13,839,371



8,591,454    F-6




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##### Table of Contents



UROPLASTY,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE
    LOSS
 Years ended
    March 31, 2008 and 2007
  AccumulatedAdditional



Other

TotalCommon Stock

Paid-in

Accumulated

Comprehensive

ShareholdersShares

Amount

Capital

Deficit

Income (loss)

EquityBalance at March 31, 2006


6,937,786


$
69,378


$
14,831,787


$
(11,034,100
)

$
(460,015
)

$
3,407,050Proceeds from private placement, net of costs of $275,305


1,389,999



13,900



1,795,844



-



-



1,809,744Proceeds from follow-on offering, net of costs of $562,872


2,430,000



24,300



4,272,878



-



-



4,297,178Proceeds from exercise of warrants, net of registration costs of
    $13,473


662,942



6,629



1,305,782



-



-



1,312,411Reclassification of warrant liability to equity upon exercise of
    warrants


-



-



694,424



-



-



694,424Proceeds from exercise of stock options


175,849



1,758



305,379



-



-



307,137Employee Retirement Savings Plan Contribution


17,754



178



44,207



-



-



44,385Share-based compensation


-



-



746,517



-



-



746,517Comprehensive loss


-



-



-



(4,976,890
)


161,091



(4,815,799
)Balance at March 31, 2007


11,614,330



116,143



23,996,818



(16,010,990
)


(298,924
)


7,803,047Issuance of common stock in connection with the purchase of
    intellectual property


1,417,144



14,171



4,644,690



-



-



4,658,861Proceeds from secondary offering, net of issuance costs of
    $526,465


1,466,400



14,664



4,591,271











4,605,935Registration costs private placement


-



-



(38,470
)


-



-



(38,470
)Proceeds from exercise of warrants


50,000



500



149,500



-



-



150,000Proceeds from exercise of stock options


368,666



3,687



631,611



-



-



635,298Share-based consulting and compensation expense


-



-



1,038,893



-



-



1,038,893Comprehensive loss


-



-



-



(3,824,240
)


573,397



(3,250,843
)Balance at March 31, 2008


14,916,540


$
149,165


$
35,014,313


$
(19,835,230
)

$
274,473


$
15,602,721    F-7




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##### Table of Contents



UROPLASTY,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 Years ended
    March 31, 2008 and 2007
  2008


2007Cash flows from operating activities:Net loss


$(3,824,240
)


$(4,976,890
)Adjustments to reconcile net loss to net cash used in operations:Depreciation and amortization


1,072,552



299,849Loss (gain) on disposal of equipment


27



(3,568
)Warrant expense


-



29,068Stock-based consulting expense


49,749



61,972Stock-based compensation expense


989,144



684,545Deferred income taxes


5,262



20,230Deferred rent


(35,000
)


(32,083
)Changes in operating assets and liabilities:Accounts receivable


(947,869
)


(447,709
)Inventories


346,598



21,114Other current assets and income tax receivable


107,204



278,394Accounts payable


86,190



17,229Accrued liabilities


553,757



429,919Accrued pension liability, net


(248,160
)


81,611Net cash used in operating activities


(1,844,786
)


(3,536,319
)Cash flows from investing activities:Proceeds from sale of short-term investments


6,648,447



1,157,867Purchase of short-term investments


(9,914,484
)


(3,020,220
)Purchases of property, plant and equipment


(302,457
)


(196,417
)Proceeds from sales of equipment


1,847



4,294Payments for intangible assets


(77,469
)


-Net cash used in investing activities


(3,644,116
)


(2,054,476
)Cash flows from financing activities:Proceeds from financing obligations


178,374



211,000Repayment of debt obligations


(259,650
)


(177,838
)Net proceeds from issuance of common stock, warrants and option
    exercise


5,352,762



7,726,470Net cash provided by financing activities


5,271,486



7,759,632Effect of exchange rates on cash and cash equivalents


333,758



31,432Net increase in cash and cash equivalents


116,342



2,200,269Cash and cash equivalents at beginning of year


3,763,702



1,563,433Cash and cash equivalents at end of year


$3,880,044



$3,763,702Supplemental disclosure of cash flow information:Cash paid during the year for interest


$32,479



$31,693Supplemental disclosure of non-cash financing and investing
    activities:Employee retirement savings plan contribution issued in common
    shares


-



44,385Property, plant and equipment additions funded by lessor
    allowance and
    classified as deferred rent


-



280,000Purchase of intellectual property funded by issuance of stock


4,658,861



-    F-8




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##### Table of Contents



UROPLASTY,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 March 31,
    2008 and 2007
  1.
    Summary of
    Significant Accounting Policies  Nature of Business.
          Principles of Consolidation.
  Revenue Recognition.
 F-9




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##### Table of Contents



Use of Estimates.
  Disclosures About Fair Value of Financial
    Instruments.
  
    Cash equivalents and short-term investments: The
    carrying amount approximates fair value because of the short
    maturity of these instruments.
    Notes payable: We estimated the fair value of its
    notes payable based on the current rates offered to us for
    similar instruments with the same remaining maturities and
    similar collateral requirements. At March 31, 2008 and
    2007, the fair value of our notes payable approximated their
    carrying value.  Cash and Cash Equivalents.
  Short-term Investments.
  Accounts Receivable.
  Inventories. (first-in,
  2008


2007Raw materials

$
215,378


$
254,988Work-in-process


15,438



20,773Finished goods


327,841



547,840$
558,657


$
823,601    F-10




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##### Table of Contents



Property, Plant, and Equipment.
  2008


2007Land

$
193,586


$
163,383Building


882,824



729,798Leasehold improvements


416,951



690,413Equipment


1,490,400



1,339,8922,983,761



2,923,486Less accumulated depreciation


(1,344,808)



(1,491,737)$
1,638,953


$
1,431,749     Internal Use Software. SOP No. 98-1, Accounting for Costs of Computer Software Developed or
    Obtained for Internal Use, No. 00-02, Accounting for Web Site Development Cost.
  Intangible Assets.
  March 31, 2008GrossEstimated


Carrying


AccumulatedLives (Years)


Amount


Amortization


Net valueLicensed technology


5


$
26,290


$
26,290



-Patents and inventions


6



5,449,230



1,248,340



4,200,890$
5,475,520


$
1,274,630


$
4,200,890March 31, 2007Licensed technology


5


$
26,290


$
26,290



-Patents and inventions


6



712,900



404,807



308,093$
739,190


$
431,097


$
308,093    F-11




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##### Table of Contents



2009

$
844,0002010


840,0002011


839,0002012


839,0002013


839,000$
4,201,000   Impairment of Long-Lived Assets.
  Product Warranty.
  Deferred Rent.
  Foreign Currency Translation.
    Share-Based Compensation.
  Income Taxes.
 F-12




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##### Table of Contents



Basic and Diluted Net Loss per Common Share.
  Number of


Range ofOptions/Warrants


exercise pricesYears ended:March 31, 2008


4,155,028


$
1.82  5.30March 31, 2007


4,336,344


$
1.10  5.30   Advertising Expenses.
  New Accounting Pronouncements.
  Fair Value Measurements
  The Fair Value Option for
    Financial Assets and Financial Liabilities. contract-by-contract
  Business Combinations
  Noncontrolling Interest in Consolidated Financial
    Statements  an amendment of ARB 51
 F-13




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##### Table of Contents



2.
    Notes Payable    2008


2007$100,000 secured note, monthly payments $3,152, inclusive of
    interest, through June 2009, at a fixed interest rate of 8.25%
    per annum.

$
44,746


$
77,280Mortgage note, monthly payments of $3,832 plus interest through
    December 2017, at a fixed interest rate of 4.7% per annum from
    May 2006 through April 2011.


449,956



418,565Note payable, monthly payments of $696 plus interest through
    August 2008 at a fixed rate of 4.4% per annum.


3,456



9,968498,158



505,813Less current maturities


84,879



78,431$
413,279


$
427,382     2009

$
85,0002010


55,0002011


46,0002012


46,0002013


92,000Thereafter


174,000$
498,000     3.
    Shareholders
    Equity  Stock Options.
     F-14




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##### Table of Contents



Weighted Avg.


AggregateNumber of
    Shares


Exercise Price


Intrinsic ValueBalance at March 31, 2006


1,888,327


$
3.80Granted


686,000



2.46Exercised


(175,849)



1.75Surrendered


(228,612)



3.10Balance at March 31, 2007


2,169,866



3.62


$
1,125,000Options granted


320,000



4.21Options exercised


(368,666)



1.72Options surrendered


(83,100)



4.66Balance at March 31, 2008


2,038,100


$
4.01


$
1,006,000Options exercisable at March 31, 2008


1,634,928


$
4.20


$
687,000       WeightedaverageNumber

remainingExercise

of options

life in

Numberprice

outstanding

years

exercisable1.82

135,000

3.41

90,0002.40

10,000

2.99

7,5002.45

300,000

8.13

200,0002.47

10,000

1.14

10,0002.52

10,000

3.66

5,0002.65

95,000

5.84

31,6662.75

30,000

1.56

30,0002.80

3,000

3.09

1,5002.85

45,000

1.74

45,0002.90

10,000

3.58

6,6663.00

100,000

7.63

100,0003.45

40,000

1.91

20,0003.50

10,000

0.51

10,0003.52

2,500

4.99

8333.65

2,500

4.77

8333.75

7,500

2.52

5,8333.80

20,000

2.50

20,0003.95

2,500

4.47

8334.09

97,500

2.91

82,4974.10

500

1.86

500 F-15




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##### Table of Contents



WeightedaverageNumber

remainingExercise

of options

life in

Numberprice

outstanding

years

exercisable4.11

30,000

4.50

9,9994.16

25,000

4.13

8,3334.20

5,000

4.31

1,6674.31

140,000

4.26

46,6685.00

10,000

4.08

2,5005.19

500,000

6.76

500,0005.30

397,100

1.73

397,1002,038,100

4.86

1,634,928     2008


2007Expected life, in years


4.06



6.92Risk-free interest rate


4.51%



4.92%Expected volatility


91.78%



102.5%Expected dividend yield


0%



0%         Warrants.
         F-16




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##### Table of Contents



Other Comprehensive Income (Loss).
  Accumulated


Accumulatedtranslation


additional pensionadjustment


liability


TotalBalance at March 31, 2006

$
(270,929)


$
(189,086)


$
(460,015)Translation adjustment


178,359



-



178,359Pension related


-



(17,268)



(17,268)Balance at March 31, 2007


(92,570)



(206,354)



(298,924)Translation adjustment


504,680



-



504,680Pension related


-



68,717



68,717Balance at March 31, 2008

$
412,110


$
(137,637)


$
274,473   4.
    Commitments
    and Contingencies  Royalties.
  Purchase Requirements.
  Operating Lease Commitments.
  2009

$
173,0002010


145,0002011


143,0002012


142,0002013


142,000Thereafter


154,000$
899,000     Employment Agreements.
 F-17




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##### Table of Contents



Product Liability.
  5.
    Savings and
    Retirement Plans  Employers Accounting for Defined Benefit Pension
    and Other Postretirement Plans Employers Accounting for Pensions Employers Accounting for
    Settlements and Curtailments of Defined Benefit Pension Plans
    and for Termination Benefits Employers Accounting for Postretirement Benefits
    Other than Pensions Employers Disclosures about Pensions and Other
    Postretirement Benefits
         F-18




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##### Table of Contents



2009

$
3602010


7742011


1,2402012


1,7662013


2,3592014 to 2018


371,184$
377,683       2008


2007Changes in benefit obligations:Projected benefit obligation, beginning of year

$
1,770,353


$
2,475,952Service cost


99,599



185,494Interest cost


93,373



124,605Other


(3,313)



21,961Actuarial result


(507,534)



(465,301)Curtailment


-



(98,146)Plan amendment


-



(700,319)Foreign currency translation


207,832



226,107Projected benefit obligation, end of year

$
1,660,310


$
1,770,353Changes in plan assets:Plan assets, beginning of year

$
1,174,328


$
1,406,317Contributions to plan


394,194



43,918Benefits paid


(3,313)



-Management cost


(11,762)



(27,783)Actual return on assets


(357,785)



(385,737)Foreign currency translation


137,719



137,613Plan assets, end of year

$
1,333,381


$
1,174,328     2008


2007Unrecognized net transition cost

$
-


$
-Unrecognized net prior service (benefit)/cost


(572,116)



(514,413)Unrecognized net (gains)/losses


754,710



755,359Additional Other Comprehensive Income

$
182,594


$
240,946  F-19




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##### Table of Contents



2008


2007Projected benefit obligation


1,176,617



1,226,397Accumulated benefit obligation


870,014



893,997Fair value of plan assets


823,206



729,666       2008


2007Projected benefit obligation


483,693



543,956Accumulated benefit obligation


483,695



543,956Fair value of plan assets


510,175



444,662       2008


2007Gross service cost, net of employee contribution

$
80,929


$
185,494Interest cost


93,373



124,605Management cost


11,762



24,375Expected return on assets


(69,192)



(71,557)Curtailment gain


-



(205,441)Amortization


6,866



42,691Net periodic retirement cost

$
123,738


$
100,167     2008


2007Discount rate


6.10-6.70%



4.90-5.30%Expected return on assets


5.00-6.10%



4.90-5.00%Expected rate of increase in future compensation:General


3%



3%Individual


0%-3%



0%-3%    F-20




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##### Table of Contents



6.
    Income Taxes    2008


2007Income tax provision:Current:U.S. and state

$
106,109


$
-Foreign


47,090



122,811Deferred:U.S. and state


(104,809)



-Foreign


7,074



23,525Total income tax expense

$
55,464


$
146,336     2008


2007Statutory federal income tax benefit

$
(1,281,383)


$
(1,643,365)State tax benefit


(98,981)



-Foreign tax


13,954



(57,766)Valuation allowance increase


1,609,511



1,363,043Other


(187,637)



484,424$
55,464


$
146,336     2008


2007Deferred tax assets:Depreciation

$
30,073


$
-Amortization


(1,438,817)



-Pension liability


68,894



106,828Stock options


584,280



246,959Other reserves and accruals


125,838



105,209Deferred profit on intercompany sales


97,781



202,590Net operating loss carryforwards


7,590,271



6,515,2267,058,320



7,176,812Less valuation allowance


(6,953,022)



(7,082,993)$
105,298


$
93,819    F-21




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##### Table of Contents



non-U.S. subsidiaries.
        7.
    Corporate
    Liquidity  scale-up
 F-22