----

----

| DELAWARE                                                       |   | 04-3005815                           |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.) |

| Large accelerated filer  o |   | Accelerated filer  o |   | Non-accelerated filer  o( Do not check if a smallerreporting company) |   | Smaller reporting company  x |
|--------------------------------------|--------|--------------------------------|--------|---------------------------------------------------------------------------------|--------|----------------------------------------|

----

----

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APOGEE TECHNOLOGY, INC.

| PART I - FINANCIAL INFORMATION                                                                                                                                                                                                              |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                        |   |
| Item 1 - Financial Statements                                                                                                                                                                                                               | 3      |
| Consolidated Balance Sheets at March 31, 2010 (unaudited) and December 31, 2009 (audited)                                                                                                                                                   |   |
|                                                                                                                                                                                                                                        |   |
| Consolidated Statements of Operations and Accumulated Deficit for the Three Months Ended March 31, 2010 and March 31, 2009 and for the period from October 1, 2008 (date re-entering development stage) through March 31, 2010 (unaudited). | 4      |
|                                                                                                                                                                                                                                        |   |
| Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and March 31, 2009 and for the period from October 1, 2008 (date re-entering development stage) through March 31, 2010 (unaudited).                         | 5      |
|                                                                                                                                                                                                                                        |   |
| Notes to Consolidated Financial Statements (unaudited)                                                                                                                                                                                      | 6      |
|                                                                                                                                                                                                                                        |   |
| Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                                                                                                        | 24     |
|                                                                                                                                                                                                                                        |   |
| Item 3 - Quantitive and Qualitative Disclosures about Market Risk                                                                                                                                                                           | 33     |
|                                                                                                                                                                                                                                        |   |
| Item 4T - Controls and Procedures                                                                                                                                                                                                           | 33     |
|                                                                                                                                                                                                                                        |   |
|                                                                                                                                                                                                                                        |   |
| PART II - OTHER INFORMATION                                                                                                                                                                                                                 |   |
|                                                                                                                                                                                                                                        |   |
| Item 1 - Legal Proceedings                                                                                                                                                                                                                  | 34     |
|                                                                                                                                                                                                                                        |   |
| Item 1A - Risk Factors                                                                                                                                                                                                                      | 35     |
|                                                                                                                                                                                                                                        |   |
| Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                                                                        | 37     |
|                                                                                                                                                                                                                                        |   |
| Item 3 - Defaults Upon Senior Securities                                                                                                                                                                                                    | 37     |
|                                                                                                                                                                                                                                        |   |
| Item 4T - Submission of Matters to a Vote of Security Holders                                                                                                                                                                               | 39     |
|                                                                                                                                                                                                                                        |   |
| Item 5 - Other Information                                                                                                                                                                                                                  | 39     |
|                                                                                                                                                                                                                                        |   |
| Item 6 - Exhibits                                                                                                                                                                                                                           | 39     |
|                                                                                                                                                                                                                                        |   |
| Signatures                                                                                                                                                                                                                                  | 41     |

----

Index

FINANCIAL INFORMATION

APOGEE TECHNOLOGY, INC. AND SUBSIDIARY

|                                                                                                                                   |   | MARCH 31,   |        |   | DECEMBER 31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|-------------|--------|--------------|--------|
|                                                                                                                                   |   | 2010        |        |   | 2009         |   |
|                                                                                                                                   |   | (Unaudited) |        |   | (Audited)    |   |
| ASSETS                                                                                                                                 |   |        |        |   |         |   |
|                                                                                                                                   |   |        |        |   |         |   |
| Current assets                                                                                                                         |   |        |        |   |         |   |
| Cash                                                                                                                                   |   | $           | 3,990       |   |         | $      | 4,704 |   |
| Prepaid expenses and other current assets                                                                                              |   |        | 967         |   |         |   | 2,694 |   |
|                                                                                                                                   |   |        |        |   |         |   |   |   |
| Total current assets                                                                                                                   |   |        | 4,957       |   |         |   | 7,398 |   |
|                                                                                                                                   |   |        |        |   |         |   |   |   |
| Property and equipment, net                                                                                                            |   |        | 39,492      |   |         |   | 44,042 |   |
|                                                                                                                                   |   |        |        |   |         |   |   |   |
| Other assets                                                                                                                           |   |        |        |   |         |   |   |   |
| Patents, net                                                                                                                           |   |        | 185,075     |   |         |   | 118,570 |   |
|                                                                                                                                   |   |        |        |   |         |   |   |   |
|                                                                                                                                   |   | $           | 229,524     |   |         | $      | 170,010 |   |
|                                                                                                                                   |   |        |        |   |         |   |   |   |
|                                                                                                                                   |   |        |        |   |         |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ DEFICIENCY                                                                                         |   |        |        |   |         |   |   |   |
|                                                                                                                                   |   |        |        |   |         |   |   |   |
| Current liabilities                                                                                                                    |   |        |        |   |         |   |   |   |
| Accounts payable and accrued expenses                                                                                                  |   |        | 3,400,804   |   |         |   | 3,092,189 |   |
| Officer loans and notes payable                                                                                                        |   |        | 1,234,731   |   |         |   | 1,060,542 |   |
| Shareholder loans and notes payable                                                                                                    |   |        | 1,230,752   |   |         |   | 1,206,283 |   |
| Other loans and notes payable                                                                                                          |   |        | 836,766     |   |         |   | 796,320 |   |
|                                                                                                                                   |   |        |        |   |         |   |   |   |
| Total current liabilities                                                                                                              |   |        | 6,703,053   |   |         |   | 6,155,334 |   |
|                                                                                                                                   |   |        |        |   |         |   |   |   |
| Stockholders’ deficiency                                                                                                         |   |        |        |   |         |   |   |   |
| Preferred stock, par value $0.0001 per share; 5,000,000 shares authorized, none issued and outstanding                                 |   |        | —     |   |         |   | — |   |
| Common stock, $0.01 par value; 40,000,000 shares authorized, 12,132,332 issued and outstanding at March 31, 2010 and December 31, 2009 |   |        | 121,323     |   |         |   | 121,323 |   |
| Additional paid-in capital                                                                                                             |   |        | 18,941,719  |   |         |   | 18,973,783 |   |
| Accumulated deficit                                                                                                                    |   |        | (21,891,704 | )      |         |   | (21,891,704 | ) |
| Accumulated deficit during development stage                                                                                           |   |        | (3,644,867  | )      |         |   | (3,188,726 | ) |
|                                                                                                                                   |   |        |        |   |         |   |   |   |
| Total stockholders’ deficiency                                                                                                   |   |        | (6,473,529  | )      |         |   | (5,985,324 | ) |
|                                                                                                                                   |   | $           | 229,524     |   |         | $      | 170,010 |   |

----

Index

APOGEE TECHNOLOGY, INC. AND SUBSIDIARY

|                                                           |   | THREE MONTHS ENDEDMARCH 31, |        |   | Cumulative from Re-entering Development Stage on OCTOBER 1, 2008 to |   |
|----------------------------------------------------------------|--------|-----------------------------|-------------|--------|---------------------------------------------------------------------|--------|
|                                                           |   | 2010                        |        |   | 2009                                                                |   |   | MARCH 31, 2010 |   |
|                                                           |   |                        |        |   |                                                                |   |   |   |   |
| Revenues                                                       |   |                        |        |   |                                                                |   |   |   |   |
| Product sales                                                  |   | $                           | —     |   |                                                                | $      | — |   |   | $ | — |   |
| Royalties                                                      |   |                        | —     |   |                                                                |   | — |   |   |   | — |   |
|                                                           |   |                        |        |   |                                                                |   |   |   |   |   |   |   |
| Costs and expenses                                             |   |                        |        |   |                                                                |   |   |   |   |   |   |   |
| Product sales                                                  |   |                        | —     |   |                                                                |   | — |   |   |   | — |   |
| Research and development                                       |   |                        | 122,571     |   |                                                                |   | 274,670 |   |   |   | 1,304,681 |   |
| Selling, general and administrative                            |   |                        | 206,259     |   |                                                                |   | 331,614 |   |   |   | 1,756,679 |   |
|                                                           |   |                        |        |   |                                                                |   |   |   |   |   |   |   |
|                                                           |   |                        | 328,830     |   |                                                                |   | 606,284 |   |   |   | 3,061,360 |   |
|                                                           |   |                        |        |   |                                                                |   |   |   |   |   |   |   |
| Loss from operations                                           |   |                        | (328,830    | )      |                                                                |   | (606,284 | ) |   |   | (3,061,360 | ) |
|                                                           |   |                        |        |   |                                                                |   |   |   |   |   |   |   |
| Other income (expense)                                         |   |                        |        |   |                                                                |   |   |   |   |   |   |   |
|                                                           |   |                        |        |   |                                                                |   |   |   |   |   |   |   |
| Interest and other expense                                     |   |                        | (127,811    | )      |                                                                |   | (84,617 | ) |   |   | (585,805 | ) |
| Interest and other income                                      |   |                        | 500         |   |                                                                |   | 106 |   |   |   | 2,298 |   |
|                                                           |   |                        |        |   |                                                                |   |   |   |   |   |   |   |
|                                                           |   |                        | (127,311    | )      |                                                                |   | (84,511 | ) |   |   | (583,507 | ) |
|                                                           |   |                        |        |   |                                                                |   |   |   |   |   |   |   |
| Net loss                                                       |   | $                           | (456,141    | )      |                                                                | $      | (690,795 | ) |   | $ | (3,644,867 | ) |
|                                                           |   |                        |        |   |                                                                |   |   |   |   |   |   |   |
| Accumulated deficit - beginning                                |   | $                           | (25,080,430 | )      |                                                                | $      | (22,881,079 | ) |   | $ | — |   |
|                                                           |   |                        |        |   |                                                                |   |   |   |   |   |   |   |
| Accumulated deficit - ending                                   |   |                        | (25,536,571 | )      |                                                                |   | (23,571,874 | ) |   |   | (3,644,867 | ) |
|                                                           |   |                        |        |   |                                                                |   |   |   |   |   |   |   |
| Basic and diluted loss per common share                        |   | $                           | (0.04       | )      |                                                                | $      | (0.06 | ) |   | $ | (0.30 | )  |
|                                                           |   |                        |        |   |                                                                |   |   |   |   |   |   |   |
| Weighted average common shares outstanding - basic and diluted |   |                        | 12,132,332  |   |                                                                |   | 12,132,332 |   |   |   | 12,132,332  |   |

----

Index

APOGEE TECHNOLOGY, INC. AND SUBSIDIARY

|                                                                        |   | THREE MONTHS ENDED MARCH 31, |     |   | Cumulative from Re-entering Development Stage on OCTOBER 1, 2008 toMARCH 31, 2010 |   |
|-----------------------------------------------------------------------------|--------|-----------------------------------|----------|--------|-----------------------------------------------------------------------------------|--------|
|                                                                        |   | 2010                              |     |   | 2009                                                                              |   |   |   |
|                                                                        |   |                              |     |   |                                                                              |   |   |   |   |
| Cash flows from operations                                                  |   |                              |     |   |                                                                              |   |   |   |   |
| Net loss                                                                    |   | $                                 | (456,141 | )      |                                                                              | $      | (690,795 | ) |   | $ | (3,644,867 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |   |                              |     |   |                                                                              |   |   |   |   |   |   |   |
| Provision for doubtful accounts                                             |   |                              | —  |   |                                                                              |   | — |   |   |   | (9,377 | ) |
| Depreciation and amortization                                               |   |                              | 16,174   |   |                                                                              |   | 25,645 |   |   |   | 171,634 |   |
| Stock compensation expense for employees and directors                      |   |                              | (46,903  | )      |                                                                              |   | 23,495 |   |   |   | 44,751 |   |
| Original issue discount                                                     |   |                              | 30,443   |   |                                                                              |   | 25,049 |   |   |   | 151,830 |   |
| Patent impairment                                                           |   |                              | —  |   |                                                                              |   | 17,267 |   |   |   | 205,674 |   |
| Disposal of sensor equipment                                                |   |                              |     |   |                                                                              |   |   |   |   |   |   |   |
| Changes in operating assets and liabilities:                                |   |                              | —  |   |                                                                              |   | — |   |   |   | 3,731 |   |
| Accounts receivable                                                         |   |                              | —  |   |                                                                              |   | — |   |   |   | 9,377 |   |
| Prepaid expenses and other current assets                                   |   |                              | 1,725    |   |                                                                              |   | (15,950 | ) |   |   | 34,146 |   |
| Accounts payable and accrued expenses                                       |   |                              | 308,616  |   |                                                                              |   | 142,623 |   |   |   | 1,528,571 |   |
|                                                                        |   |                              |     |   |                                                                              |   |   |   |   |   |   |   |
| Net cash used in operating activities                                       |   |                              | (146,086 | )      |                                                                              |   | (472,666 | ) |   |   | (1,504,530 | ) |
|                                                                        |   |                              |     |   |                                                                              |   |   |   |   |   |   |   |
| Cash flows from investing activities                                        |   |                              |     |   |                                                                              |   |   |   |   |   |   |   |
| Patent costs                                                                |   |                              | (78,128  | )      |                                                                              |   | (6,000 | ) |   |   | (121,824 | ) |
|                                                                        |   |                              |     |   |                                                                              |   |   |   |   |   |   |   |
| Net cash used by investing activities                                       |   |                              | (78,128  | )      |                                                                              |   | (6,000 | ) |   |   | (121,824 | ) |
|                                                                        |   |                              |     |   |                                                                              |   |   |   |   |   |   |   |
| Cash flows from financing activities                                        |   |                              |     |   |                                                                              |   |   |   |   |   |   |   |
| Cash overdraft                                                              |   |                              | —  |   |                                                                              |   | (49,236 | ) |   |   | (4,284 | ) |
| Proceeds for shareholder loans and notes payable                            |   |                              | 18,000   |   |                                                                              |   | 95,000 |   |   |   | 464,665 |   |
| Proceeds from officer loans and notes payable                               |   |                              | 175,500  |   |                                                                              |   | 98,900 |   |   |   | 484,400 |   |
| Proceeds from other loans and notes payable                                 |   |                              | 30,000   |   |                                                                              |   | 336,500 |   |   |   | 685,563 |   |
|                                                                        |   |                              |     |   |                                                                              |   |   |   |   |   |   |   |
| Net cash provided by financing activities                                   |   |                              | 223,500  |   |                                                                              |   | 481,164 |   |   |   | 1,630,344 |   |
|                                                                        |   |                              |     |   |                                                                              |   |   |   |   |   |   |   |
| Increase (decrease) in cash                                                 |   |                              | (714     | )      |                                                                              |   | 2,498 |   |   |   | 3,990 |   |
|                                                                        |   |                              |     |   |                                                                              |   |   |   |   |   |   |   |
| Cash  — beginning                                           |   |                              | 4,704    |   |                                                                              |   | — |   |   |   | — |   |
|                                                                        |   |                              |     |   |                                                                              |   |   |   |   |   |   |   |
| Cash  — ending                                              |   | $                                 | 3,990    |   |                                                                              | $      | 2,498 |   |   | $ | 3,990 |   |
|                                                                        |   |                              |     |   |                                                                              |   |   |   |   |   |   |   |
| Supplemental Cash Flow Information:                                         |   |                              |     |   |                                                                              |   |   |   |   |   |   |   |
| Cash paid for interest                                                      |   | $                                 | —  |   |                                                                              | $      | — |   |   | $ | — |   |
| Warrants issued in connection with notes payable – non-cash           |   | $                                 | 14,839   |   |                                                                              | $      | 45,065 |   |   | $ | 150,143 |   |
| Income taxes                                                                |   | $                                 | —  |   |                                                                              | $      | — |   |   | $ | — |   |

----

Index

| 1. | The Company and Basis of Presentation |
|----|---------------------------------------|

----

Index

----

Index

| 2.               Summary of Significant Accounting Policies |
|----------------------------------------------------------------------------------------------------------------------------------------|

----

Index

----

Index

| Stock Options                    |   | Shares    |   | Weighted-AverageExercisePrice |   | Weighted-AverageRemainingContractualTerm |   |
|----------------------------------|--------|-----------|--------|-------------------------------|--------|------------------------------------------|--------|
| Outstanding at December 31, 2009 |   | 2,929,500 |   | $                             | 4.5383 |                                     |   |   |
| Granted                          |   | —   |   |                          |   |                                     |   |
| Exercised                        |   | —   |   |                          |   |                                     |   |
| Cancelled or expired             |   | 9,000     |   | 1.0167                        |   |                                     |   |
| Outstanding at March 31, 2010    |   | 2,920,500 |   | $                             | 4.5492 |                                     | 3.8664 |   |
|                             |   |      |   |                          |   |                                     |   |
| Vested at March 31, 2010         |   | 2,646,500 |   | $                             | 4.9202 |                                     | 3.5025 |   |
|                             |   |      |   |                          |   |                                     |   |
| Exercisable at March 31, 2010    |   | 2,646,500 |   | $                             | 4.9202 |                                     | 3.5025 |   |

|                    |   | Options Outstanding |      |   | Options Exercisable |   |
|-------------------------|--------|---------------------|-----------|--------|---------------------|--------|
|                    |   |                |      |   | Weighted            |   |   |   |   |   |   |   |   |   |   |
|                    |   |                |      |   | Average             |   |   | Weighted |   |   |   |   |   | Weighted |   |
|                    |   |                |      |   | Remaining           |   |   | Average |   |   |   |   |   | Average |   |
| Range of Exercise       |   | Number              |      |   | Contractual         |   |   | Exercise |   |   | Number |   |   | Exercise |   |
| Prices                  |   | Outstanding         |      |   | Term                |   |   | Price |   |   | Exercisable |   |   | Price |   |
|                    |   |                |      |   |                |   |   |   |   |   |   |   |   |   |   |
| $0.45 — 1.69      |   |                | 1,042,900 |   |                |   | 6.0290 |   |   | $ | 1.0411 |   |   |   | 768,900 |   |   | $ | 1.0411 |   |
| $2.71 — 6.59      |   |                | 1,282,600 |   |                |   | 2.0139 |   |   | $ | 5.4065 |   |   |   | 1,282,600 |   |   | $ | 5.4065 |   |
| $8.45 — 12.15     |   |                | 595,000   |   |                |   | 4.0692 |   |   | $ | 8.8849 |   |   |   | 595,000 |   |   | $ | 8.8849 |   |
|                    |   |                |      |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total at March 31, 2010 |   |                | 2,920,500 |   |                |   | 3.8664 |   |   | $ | 4.9202 |   |   |   | 2,646,500 |   |   | $ | 4.9202 |   |

----

Index

----

Index

| 3. | Property and Equipment |
|----|------------------------|

| Property and Equipment        |   | March 31, |     |   | December 31, |   |
|-------------------------------|--------|-----------|----------|--------|--------------|--------|
|                          |   | 2010      |     |   | 2009         |   |
|                          |   |      |     |   |         |   |
| Equipment                     |   | $         | 162,790  |   |         | $      | 162,790 |   |
| Software                      |   |      | 32,943   |   |         |   | 32,943 |   |
| Furniture and fixtures        |   |      | 22,047   |   |         |   | 22,047 |   |
| Leasehold improvements        |   |      | 92,892   |   |         |   | 92,892 |   |
|                          |   |      |     |   |         |   |   |   |
|                          |   | $         | 310,672  |   |         | $      | 310,672 |   |
|                          |   |      |     |   |         |   |   |   |
| Less accumulated depreciation |   |      | (271,180 | )      |         |   | (266,630 | ) |
|                          |   |      |     |   |         |   |   |   |
|                          |   | $         | 39,492   |   |         | $      | 44,042 |   |

| Description            |   | Depreciable Lives |   |
|------------------------|--------|-------------------|--------|
|                   |   |              |   |
| Equipment              |   | 5 years           |   |
| Software               |   | 3 years           |   |
| Furniture and fixtures |   | 7 years           |   |
| Leasehold improvements |   | Term of lease     |   |

| 4. |   Asset Impairment |
|----|------------------------------|

|              |   | Gross Carrying Value |    |   | Accumulated Amortization |   |    | AccumulatedImpairment |   |   | Net Book Value |   |
|-------------------|--------|----------------------|---------|--------|--------------------------|--------|---------|-----------------------|--------|--------|----------------|--------|
|              |   |                 |    |   |                     |   |    |                  |   |   |           |   |
| December 31, 2009 |   | $                    | 436,099 |   |                     |   | (71,855 | )                     |   |   | (245,674       | )      |   | $ | 118,570 |   |
| March 31, 2010    |   | $                    | 514,227 |   |                     |   | (83,478 | )                     |   |   | (245,674       | )      |   | $ | 185,075 |   |

----

Index

|   | Estimated amortization is as follows: |
|--------|---------------------------------------|

| Year ended December 31,         |   |
|---------------------------------|--------|
| Nine months ended December 2010 |   |   | 42,087 |   |
| 2011                            |   |   | 53,711 |   |
| 2012                            |   |   | 53,711 |   |
| 2013                            |   |   | 19,941 |   |
| 2014                            |   |   | 15,625 |   |

| 5. | Accounts Payable and Accrued Expenses |
|----|---------------------------------------|

|    Accounts Payable  |   | March 31, |      |   | December 31, |   |
|------------------------------------------|--------|-----------|-----------|--------|--------------|--------|
|                                     |   | 2010      |      |   | 2009         |   |
|                                     |   |      |      |   |         |   |
| Legal and accounting                     |   | $         | 1,796,000 |   |         | $      | 1,691,000 |   |
| Consulting expenses                      |   |      | 75,000    |   |         |   | 70,000 |   |
| Interest owed to Promissory Note holders |   |      | 509,000   |   |         |   | 412,000 |   |
| Corporate insurance expenses             |   |      | —   |   |         |   | 4,000 |   |
| Director and Advisory Committee fees     |   |      | 114,000   |   |         |   | 100,000 |   |
| Rent expenses                            |   |      | 84,000    |   |         |   | 70,000 |   |
| Other expenses                           |   |      | 461,000   |   |         |   | 420,000 |   |
|                                     |   |      |      |   |         |   |   |   |
|                                     |   | $         | 3,039,000 |   |         | $      | 2,767,000 |   |

|    Accrued Expenses  |   | March 31, |    |   | December 31, |   |
|------------------------------------------|--------|-----------|---------|--------|--------------|--------|
|                                     |   | 2010      |    |   | 2009         |   |
|                                     |   |      |    |   |         |   |
| Accrued audit expenses                   |   | $         | 51,000  |   |         | $      | 100,000 |   |
| Accrued legal expenses                   |   |      | 19,000  |   |         |   | 25,000 |   |
| Accrued consulting expenses              |   |      | 57,000  |   |         |   | 46,000 |   |
| Accrued payroll and payroll taxes        |   |      | 222,000 |   |         |   | 134,000 |   |
| Other accrued expenses                   |   |      | 12,000  |   |         |   | 20,000 |   |
|                                     |   |      |    |   |         |   |   |   |
|                                     |   | $         | 361,000 |   |         | $      | 325,000 |   |

| 6. | Promissory Notes, Loans and Warrants |
|----|--------------------------------------|

----

Index

|                   |   |   |      | Promissory Notes and Loans Due ToDavid Spiegel |               |                 |   |   |                 |   |
|------------------------|--------|--------|-----------|------------------------------------------------|--------------------|----------------------|--------|--------|----------------------|--------|
|                   |   |   |      |                                           |               |                 |   |   |                 |   |
| Date ofPromissory Note |   | Amount |      | MaturityDate                                   |               | InitialInterest Rate |   |   | CurrentInterest Rate |   |
|                   |   |   |      |                                           |               |                 |   |   |                 |   |
| December 11, 2007      |   | $      | 150,000   |                                           | March 10, 2008     |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| February 21, 2008      |   |   | 100,000   |                                           | August 19, 2008    |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| March 20, 2008         |   |   | 100,000   |                                           | September 16, 2008 |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| April 1, 2008          |   |   | 50,000    |                                           | September 28, 2008 |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| May 15, 2008           |   |   | 50,000    |                                           | November 11, 2008  |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| June 16, 2008          |   |   | 65,000    |                                           | December 13, 2008  |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| June 18, 2008          |   |   | 50,000    |                                           | December 15, 2008  |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| July 15, 2008          |   |   | 50,000    |                                           | January 11, 2009   |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| July 28, 2008          |   |   | 50,000    |                                           | January 24, 2009   |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| August 12, 2008        |   |   | 35,000    |                                           | February 8, 2009   |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| August 27, 2008        |   |   | 35,000    |                                           | February 23, 2009  |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| September 5, 2008      |   |   | 35,000    |                                           | March 4, 2009      |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| October 27, 2008       |   |   | 35,000    |                                           | April 25, 2009     |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| January 6, 2009        |   |   | 80,000    |                                           | July 5, 2009       |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| March 19, 2009         |   |   | 64,000    |                                           | September 15, 2009 |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| May 19, 2009           |   |   | 35,000    |                                           | November 15, 2009  |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| June 10, 2009          |   |   | 25,000    |                                           | December 7, 2009   |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| July 1, 2009           |   |   | 32,000    |                                           | December 28, 2009  |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| November 5, 2009       |   |   | 103,000   |                                           | May 4, 2010        |                 |   | 8.00   | %                    |   |   | 8.00 | % |
| December 21, 2009      |   |   | 68,000    |                                           | June 19. 2010      |                 |   | 8.00   | %                    |   |   | 8.00 | % |
| December 29, 2009      |   |   | 4,665     |                                           | July 24, 2010      |                 |   | 8.00   | %                    |   |   | 8.00 | % |
| April 16, 2010*        |   |   | 10,000    |                                           | October 13, 2010   |                 |   | 8.00   | %                    |   |   | 8.00 | % |
| June 4, 2010*          |   |   | 8,000     |                                           | December 1, 2010   |                 |   | 8.00   | %                    |   |   | 8.00 | % |
|                   |   | $      | 1,235,665 |                                           |               |                 |   |   |                 |   |   |   |   |

----

Index

|                   |   |   |    | Promissory Notes and Loans Due ToHerbert M. Stein |               |                 |   |   |                 |   |
|------------------------|--------|--------|---------|---------------------------------------------------|--------------------|----------------------|--------|--------|----------------------|--------|
|                   |   |   |    |                                              |               |                 |   |   |                 |   |
| Date ofPromissory Note |   | Amount |    | MaturityDate                                      |               | InitialInterest Rate |   |   | CurrentInterest Rate |   |
|                   |   |   |    |                                              |               |                 |   |   |                 |   |
| December 11, 2007      |   | $      | 250,000 |                                              | March 10, 2008     |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| February 21, 2008      |   |   | 100,000 |                                              | August 19, 2008    |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| March 20, 2008         |   |   | 50,000  |                                              | September 16, 2008 |                 |   | 8.00   | %                    |   |   | 12.00 | % |

| April 1, 2008     |   |   | 50,000    |   | September 28, 2008 |   |   | 8.00   | %      |   |   | 12.00  | %      |
|-------------------|--------|--------|-----------|--------|--------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| May 15, 2008      |   |   | 50,000    |   | November 11, 2008  |   |   | 8.00   | %      |   |   | 12.00  | %      |
| June 16, 2008     |   |   | 35,000    |   | December 13, 2008  |   |   | 8.00   | %      |   |   | 12.00  | %      |
| June 18, 2008     |   |   | 40,000    |   | December 15, 2008  |   |   | 8.00   | %      |   |   | 12.00  | %      |
| July 15, 2008     |   |   | 30,000    |   | January 11, 2009   |   |   | 8.00   | %      |   |   | 12.00  | %      |
| July 28, 2008     |   |   | 50,000    |   | January 24, 2009   |   |   | 8.00   | %      |   |   | 12.00  | %      |
| August 12, 2008   |   |   | 35,000    |   | February 8, 2009   |   |   | 8.00   | %      |   |   | 12.00  | %      |
| August 27, 2008   |   |   | 35,000    |   | February 23, 2009  |   |   | 8.00   | %      |   |   | 12.00  | %      |
| September 5, 2008 |   |   | 35,000    |   | March 4, 2009      |   |   | 8.00   | %      |   |   | 12.00  | %      |
| October 27, 2008  |   |   | 25,000    |   | April 25, 2009     |   |   | 8.00   | %      |   |   | 12.00  | %      |
| February 2, 2009  |   |   | 30,000    |   | August 1, 2009     |   |   | 8.00   | %      |   |   | 12.00  | %      |
| February 17, 2009 |   |   | 10,000    |   | August 16, 2009    |   |   | 8.00   | %      |   |   | 12.00  | %      |
| March 19, 2009    |   |   | 25,900    |   | September 15, 2009 |   |   | 8.00   | %      |   |   | 12.00  | %      |
| April 13, 2009    |   |   | 33,000    |   | October 10, 2009   |   |   | 8.00   | %      |   |   | 12.00  | %      |
| May 18, 2009      |   |   | 12,000    |   | November 14, 2009  |   |   | 8.00   | %      |   |   | 12.00  | %      |
| July 1, 2009      |   |   | 20,000    |   | December 28, 2009  |   |   | 8.00   | %      |   |   | 12.00  | %      |
| November 5, 2009  |   |   | 42,500    |   | May 4, 2010        |   |   | 8.00   | %      |   |   | 8.00   | %      |
| December 21, 2009 |   |   | 83,500    |   | June 19, 2010      |   |   | 8.00   | %      |   |   | 8.00   | %      |
| January 25, 2010  |   |   | 79,000    |   | July 24, 2010      |   |   | 8.00   | %      |   |   | 8.00   | %      |
| February 22, 2010 |   |   | 66,000    |   | August 21, 1010    |   |   | 8.00   | %      |   |   | 8.00   | %      |
| April 16, 2010*   |   |   | 30,500    |   | October 13, 2010   |   |   | 8.00   | %      |   |   | 8.00   | %      |
| June 4, 2010**    |   |   | 27,000    |   | December 1, 2010   |   |   | 8.00   | %      |   |   | 8.00   | %      |
|              |   | $      | 1,244,400 |   |               |   |   |   |   |   |   |   |   |

|                   |   |   |    | Promissory Notes and Loans Due ToRobert Schacter et al |               |                 |   |   |                 |   |
|------------------------|--------|--------|---------|--------------------------------------------------------|--------------------|----------------------|--------|--------|----------------------|--------|
|                   |   |   |    |                                                   |               |                 |   |   |                 |   |
| Date ofPromissory Note |   | Amount |    | MaturityDate                                           |               | InitialInterest Rate |   |   | CurrentInterest Rate |   |
|                   |   |   |    |                                                   |               |                 |   |   |                 |   |
| September 5, 2008      |   | $      | 140,000 |                                                   | March 4, 2009      |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| October 27, 2008       |   |   | 100,000 |                                                   | April 25, 2009     |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| January 8, 2009        |   |   | 100,000 |                                                   | July 7, 2009       |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| February 2, 2009       |   |   | 50,000  |                                                   | August 1, 2009     |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| February 17, 2009      |   |   | 50,000  |                                                   | August 16, 2009    |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| March 19, 2009         |   |   | 50,000  |                                                   | September 15, 2009 |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| April 13, 2009         |   |   | 20,000  |                                                   | October 10, 2009   |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| June 10, 2009          |   |   | 25,000  |                                                   | December 7, 2009   |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| November 5, 2009       |   |   | 50,000  |                                                   | May 4, 2010        |                 |   | 8.00   | %                    |   |   | 8.00 | % |
|                   |   | $      | 585,000 |                                                   |               |                 |   |   |                 |   |   |   |   |

----

Index

|                   |   |   |    | Promissory Notes and Loans Due ToOthers |               |                 |   |   |                 |   |
|------------------------|--------|--------|---------|-----------------------------------------|--------------------|----------------------|--------|--------|----------------------|--------|
|                   |   |   |    |                                    |               |                 |   |   |                 |   |
| Date ofPromissory Note |   | Amount |    | MaturityDate                            |               | InitialInterest Rate |   |   | CurrentInterest Rate |   |
|                   |   |   |    |                                    |               |                 |   |   |                 |   |
| July 28, 2008          |   | $      | 20,000  |                                    | March 4, 2009      |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| October 27, 2008       |   |   | 6,000   |                                    | April 25, 2009     |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| January 6, 2009        |   |   | 500     |                                    | July 5, 2009       |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| February 17, 2009      |   |   | 37,000  |                                    | August 16, 2009    |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| March 19, 2009         |   |   | 500     |                                    | September 15, 2009 |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| April 13, 2009*        |   |   | 61,500  |                                    | October 10, 2009   |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| May 18, 2009           |   |   | 32,500  |                                    | November 14, 2009  |                 |   | 8.00   | %                    |   |   | 12.00 | % |
| November 5, 2009       |   |   | 70,000  |                                    | May 4, 2010        |                 |   | 8.00   | %                    |   |   | 8.00 | % |
| December 21, 2009      |   |   | 2,563   |                                    | June 19, 2010      |                 |   | 8.00   | %                    |   |   | 8.00 | % |
| January 25, 2010       |   |   | 30,000  |                                    | July 24, 2010      |                 |   | 8.00   | %                    |   |   | 8.00 | % |
|                   |   | $      | 260,563 |                                    |               |                 |   |   |                 |   |   |   |   |

|                                                |   | Officer Loans Herbert M. Stein |      |   | Shareholder LoansDavid Spiegel |   |      | Total  |   |
|-----------------------------------------------------|--------|--------------------------------|-----------|--------|--------------------------------|--------|-----------|--------|--------|
|                                                |   |                           |      |   |                           |   |      |   |   |   |   |   |
| Total proceeds from Loans and Promissory Notes      |   | $                              | 1,244,400 |   |                           | $      | 1,234,665 |   |   | $ | 2,479,065 |   |
| Discount  (Fair Market Value of Warrants) |   |                           | (9,669    | )      |                           |   | (3,913    | )      |   |   | (13,582 | ) |
|                                                |   | $                              | 1,234,731 |   |                           | $      | 1,230,752 |   |   | $ | 2,465,483 |   |

|                                           |   | Loans Robert Schacter et al |    |   | LoansOthers |   |    | Total  |   |
|------------------------------------------------|--------|-----------------------------|---------|--------|-------------|--------|---------|--------|--------|
|                                           |   |                        |    |   |        |   |    |   |   |   |   |   |
| Total proceeds from Loans and Promissory Notes |   | $                           | 585,000 |   |        | $      | 260,563 |   |   | $ | 845,563 |   |
| Discount (Fair Market Value of Warrants)       |   |                        | (2,902  | )      |        |   | (5,895  | )      |   |   | (8,797 | ) |
|                                           |   | $                           | 582,098 |   |        | $      | 254,668 |   |   | $ | 836,766 |   |

----

Index

| David Spiegel     |   |
|-------------------|--------|
| Date of Warrant   |   | Shares |   |   | Stock PriceAt Date ofIssuance |   | Term ofWarrant |   | StrikePrice |   |   | Risk FreeInterestRate |   |   | Volatility |   |   | Value PerWarrant |   |   | Total Value |   |
|              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| February 21, 2008 |   |   | 10,000 |   |   | $ | 0.65 |   | 3 Years |   | $ | 1.00 |   |   |   | 2.23 |   |   |   | 98.45824 | % |   | $ | 0.3462 |   |   | $ | 3,462.00 |   |
| March 20, 2008    |   |   | 10,000 |   |   | $ | 0.70 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.71 |   |   |   | 99.87467 | % |   | $ | 0.3867 |   |   |   | 3,867.00 |   |
| April 1, 2008     |   |   | 5,000 |   |   | $ | 0.85 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.94 |   |   |   | 100.00925 | % |   | $ | 0.5042 |   |   |   | 2,526.00 |   |
| May 15, 2008      |   |   | 5,000 |   |   | $ | 0.83 |   | 3 Years |   | $ | 1.00 |   |   |   | 2.70 |   |   |   | 102.78266 | % |   | $ | 0.5036 |   |   |   | 2,518.00 |   |
| June 16, 2008     |   |   | 6,500 |   |   | $ | 0.63 |   | 3 Years |   | $ | 1.00 |   |   |   | 3.33 |   |   |   | 104.12541 | % |   | $ | 0.3555 |   |   |   | 2,310.75 |   |
| June 18, 2008     |   |   | 5,000 |   |   | $ | 0.61 |   | 3 Years |   | $ | 1.00 |   |   |   | 3.19 |   |   |   | 104.07197 | % |   | $ | 0.3397 |   |   |   | 1,698.50 |   |
| July 15, 2008     |   |   | 5,000 |   |   | $ | 0.87 |   | 3 Years |   | $ | 1.00 |   |   |   | 2.70 |   |   |   | 104.55357 | % |   | $ | 0.5429 |   |   |   | 2,714.50 |   |
| July 28, 2008     |   |   | 5,000 |   |   | $ | 0.75 |   | 3 Years |   | $ | 1.00 |   |   |   | 2.90 |   |   |   | 104.54508 | % |   | $ | 0.4481 |   |   |   | 2,240.50 |   |
| August 12, 2008   |   |   | 3,500 |   |   | $ | 0.75 |   | 3 Years |   | $ | 1.00 |   |   |   | 2.73 |   |   |   | 104.93498 | % |   | $ | 0.4488 |   |   |   | 1,570.80 |   |
| August 27, 2008   |   |   | 3,500 |   |   | $ | 0.85 |   | 3 Years |   | $ | 1.00 |   |   |   | 2.58 |   |   |   | 106.26182 | % |   | $ | 0.5331 |   |   |   | 1,865.85 |   |
| September 5, 2008 |   |   | 3,500 |   |   | $ | 0.86 |   | 3 Years |   | $ | 1.00 |   |   |   | 2.44 |   |   |   | 106.21122 | % |   | $ | 0.5404 |   |   |   | 1,891.40 |   |
| October 27, 2008  |   |   | 3,500 |   |   | $ | 0.60 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.83 |   |   |   | 108.82589 | % |   | $ | 0.3431 |   |   |   | 1,200.85 |   |
| January 6, 2009   |   |   | 8,000 |   |   | $ | 0.75 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.10 |   |   |   | 108.80131 | % |   | $ | 0.4566 |   |   |   | 3,652.80 |   |
| March 19, 2009    |   |   | 6,400 |   |   | $ | 0.68 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.21 |   |   |   | 109.80676 | % |   | $ | 0.4057 |   |   |   | 2,596.48 |   |
| May 19, 2009      |   |   | 3,500 |   |   | $ | 0.70 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.37 |   |   |   | 111.74849 | % |   | $ | 0.4288 |   |   |   | 1,500.80 |   |
| June 10, 2009     |   |   | 2,500 |   |   | $ | 0.60 |   | 3 Years |   | $ | 1.00 |   |   |   | 2.00 |   |   |   | 126.10551 | % |   | $ | 0.3959 |   |   |   | 989.75 |   |
| July 1, 2009      |   |   | 3,200 |   |   | $ | 0.87 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.57 |   |   |   | 128.93341 | % |   | $ | 0.6295 |   |   |   | 2,014.40 |   |
| November 5, 2009  |   |   | 10,300 |   |   | $ | 1.02 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.44 |   |   |   | 131.45892 | % |   | $ | 0.7681 |   |   |   | 7,911.43 |   |
| December 21, 2009 |   |   | 6,800 |   |   | $ | 1.05 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.42 |   |   |   | 133.83768 | % |   | $ | 0.8029 |   |   |   | 5,459.72 |   |
| January 25, 2010  |   |   | 466 |   |   | $ | 0.96 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.40 |   |   |   | 134.80467 | % |   | $ | 0.7268 |   |   |   | 338.69 |   |
| April 16, 2010*   |   |   | 1,000 |   |   | $ | 0.90 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.56 |   |   |   | 136.43020 | % |   | $ | 0.6800 |   |   |   | 680.00 |   |
| June 4, 2010*     |   |   | 800 |   |   | $ | 0.50 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.17 |   |   |   | 153.12821 | % |   | $ | 0.3740 |   |   |   | 299.20 |   |
| Total             |   |   | 108,466 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 53,309.42 |   |

----

Index

| Herbert M. Stein  |   |
|-------------------|--------|
| Date of Warrant   |   | Number ofShares |   |   | Stock PriceAt Date ofIssuance |   | Term ofWarrant |   | StrikePrice |   |   | Risk FreeInterestRate |   |   | Volatility |   |   | Value PerWarrant |   |   | Total Value |   |
|              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| February 21, 2008 |   |   | 10,000 |   |   | $ | 0.65 |   | 3 Years |   | $ | 1.00 |   |   |   | 2.23 |   |   |   | 98.45824 | % |   | $ | 0.3462 |   |   | $ | 3,462.00 |   |
| March 20, 2008    |   |   | 5,000 |   |   | $ | 0.70 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.71 |   |   |   | 99.87467 | % |   | $ | 0.3867 |   |   |   | 1,933.50 |   |
| April 1, 2008     |   |   | 5,000 |   |   | $ | 0.85 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.94 |   |   |   | 100.00925 | % |   | $ | 0.5042 |   |   |   | 2,526.00 |   |
| May 15, 2008      |   |   | 5,000 |   |   | $ | 0.83 |   | 3 Years |   | $ | 1.00 |   |   |   | 2.70 |   |   |   | 102.78266 | % |   | $ | 0.5036 |   |   |   | 2,518.00 |   |
| June 16, 2008     |   |   | 3,500 |   |   | $ | 0.63 |   | 3 Years |   | $ | 1.00 |   |   |   | 3.33 |   |   |   | 104.12541 | % |   | $ | 0.3555 |   |   |   | 1,244.25 |   |
| June 18, 2008     |   |   | 4,000 |   |   | $ | 0.61 |   | 3 Years |   | $ | 1.00 |   |   |   | 3.19 |   |   |   | 104.07197 | % |   | $ | 0.3397 |   |   |   | 1,358.80 |   |
| July 15, 2008     |   |   | 3,000 |   |   | $ | 0.87 |   | 3 Years |   | $ | 1.00 |   |   |   | 2.70 |   |   |   | 104.55357 | % |   | $ | 0.5429 |   |   |   | 1,628.70 |   |
| July 28, 2008     |   |   | 5,000 |   |   | $ | 0.75 |   | 3 Years |   | $ | 1.00 |   |   |   | 2.90 |   |   |   | 104.545 08 | % |   | $ | 0.4481 |   |   |   | 2,240.50 |   |

| August 12, 2008   |   |   | 3,500  |   |   | $      | 0.75   |   | 3 Years |   | $      | 1.00   |   |   |   | 2.73   |   |   |   | 104.93498 | %      |   | $      | 0.4488 |   |   |   | 1,570.80  |   |
|-------------------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|
| August 27, 2008   |   |   | 3,500  |   |   | $      | 0.85   |   | 3 Years |   | $      | 1.00   |   |   |   | 2.58   |   |   |   | 106.26182 | %      |   | $      | 0.5331 |   |   |   | 1,865.85  |   |
| September 5, 2008 |   |   | 3,500  |   |   | $      | 0.86   |   | 3 Years |   | $      | 1.00   |   |   |   | 2.44   |   |   |   | 106.21122 | %      |   | $      | 0.5404 |   |   |   | 1,891.40  |   |
| October 27, 2008  |   |   | 2,500  |   |   | $      | 0.60   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.83   |   |   |   | 108.82589 | %      |   | $      | 0.3431 |   |   |   | 857.75    |   |
| February 2, 2009  |   |   | 3,000  |   |   | $      | 0.70   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.27   |   |   |   | 109.04276 | %      |   | $      | 0.4188 |   |   |   | 1,256.40  |   |
| February 17, 2009 |   |   | 1,000  |   |   | $      | 0.83   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.22   |   |   |   | 109.04322 | %      |   | $      | 0.5219 |   |   |   | 521.90    |   |
| March 19, 2009    |   |   | 2,590  |   |   | $      | 0.68   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.21   |   |   |   | 109.80676 | %      |   | $      | 0.4057 |   |   |   | 1,050.76  |   |
| April 13, 2009    |   |   | 3,300  |   |   | $      | 0.60   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.27   |   |   |   | 110.59204 | %      |   | $      | 0.3469 |   |   |   | 1,144.77  |   |
| May 18, 2009      |   |   | 1,200  |   |   |   | 0.70   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.36   |   |   |   | 111.77410 | %      |   | $      | 0.4288 |   |   |   | 514.56    |   |
| July 1, 2009      |   |   | 2,000  |   |   | $      | 0.87   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.57   |   |   |   | 128.93341 | %      |   | $      | 0.6295 |   |   |   | 1,259.20  |   |
| November 5, 2009  |   |   | 4,250  |   |   | $      | 1.02   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.44   |   |   |   | 131.45892 | %      |   | $      | 0.7681 |   |   |   | 3,264.43  |   |
| December 21, 2009 |   |   | 8,350  |   |   | $      | 1.05   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.42   |   |   |   | 133.83768 | %      |   | $      | 0.8029 |   |   |   | 6,704.22  |   |
| January 25, 2010  |   |   | 7,900  |   |   | $      | 0.96   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.40   |   |   |   | 134.80467 | %      |   | $      | 0.7268 |   |   |   | 5,741.72  |   |
| February 22, 2010 |   |   | 6,600  |   |   | $      | 0.70   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.48   |   |   |   | 134.43818 | %      |   | $      | 0.5011 |   |   |   | 3,307.26  |   |
| April 16, 2010*   |   |   | 3,050  |   |   | $      | 0.96   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.40   |   |   |   | 134.80467 | %      |   | $      | 0.7268 |   |   |   | 2,074.00  |   |
| June 4, 2010*     |   |   | 2,700  |   |   | $      | 0.96   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.40   |   |   |   | 134.80467 | %      |   | $      | 0.7268 |   |   |   | 1,009.80  |   |
| Total             |   |   | 99,440 |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   | $      | 50,946.57 |   |

| Robert Schacter et al* |   |
|------------------------|--------|
|                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Date of Warrant        |   | Number ofShares |   |   | Stock PriceAt Date ofIssuance |   | Term ofWarrant |   | StrikePrice |   |   | Risk FreeInterestRate |   |   | Volatility |   |   | Value PerWarrant |   |   | Total Value |   |
|                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| September 5, 2008      |   |   | 14,000 |   |   | $ | 0.86 |   | 3 Years |   | $ | 1.00 |   |   |   | 2.44 |   |   |   | 106.21122 | % |   | $ | 0.5404 |   |   | $ | 7,565.60 |   |
| October 27, 2008       |   |   | 25,000 |   |   | $ | 0.60 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.83 |   |   |   | 108.82589 | % |   | $ | 0.3431 |   |   |   | 8,577.50 |   |
| January 8, 2009        |   |   | 25,000 |   |   | $ | 0.90 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.16 |   |   |   | 108.85621 | % |   | $ | 0.5777 |   |   |   | 14,442.50 |   |
| February 2, 2009       |   |   | 12,500 |   |   | $ | 0.70 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.27 |   |   |   | 109.04276 | % |   | $ | 0.4188 |   |   |   | 5,235.00 |   |
| February 17, 2009      |   |   | 12,500 |   |   | $ | 0.83 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.22 |   |   |   | 109.04322 | % |   | $ | 0.5219 |   |   |   | 6,523.75 |   |
| March 19, 2009         |   |   | 12,500 |   |   | $ | 0.68 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.21 |   |   |   | 109.80676 | % |   | $ | 0.4057 |   |   |   | 5,071.25 |   |
| April 13, 2009         |   |   | 5,000 |   |   | $ | 0.60 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.27 |   |   |   | 110.59204 | % |   | $ | 0.3469 |   |   |   | 1,734.50 |   |
| June 10, 2009          |   |   | 6,250 |   |   | $ | 0.60. |   | 3 Years |   | $ | 1.00 |   |   |   | 2.00 |   |   |   | 126.10551 | % |   | $ | 0.3959 |   |   |   | 2,474.38 |   |
| November 5, 2009       |   |   | 20,000 |   |   | $ | 1.02 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.44 |   |   |   | 131.45892 | % |   | $ | 0.7681 |   |   |   | 15,362.00 |   |
| Total                  |   |   | 132,750 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 66,986.48 |   |

----

Index

| Others            |   |
|-------------------|--------|
| Date of Warrant   |   | Number ofShares |   |   | Stock PriceAt Date ofIssuance |   | Term ofWarrant |   | StrikePrice |   |   | Risk FreeInterestRate |   |   | Volatility |   |   | Value PerWarrant |   |   | Total Value |   |
| July 28, 2008     |   |   | 2,000 |   |   | $ | 0.75 |   | 3 Years |   | $ | 1.00 |   |   |   | 2.90 |   |   |   | 104.545 08 | % |   | $ | 0.4460 |   |   | $ | 892.00 |   |
| October 27, 2008  |   |   | 600 |   |   | $ | 0.60 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.83 |   |   |   | 108.82589 | % |   | $ | 0.3431 |   |   |   | 205.86 |   |
| January 6, 2009   |   |   | 50 |   |   | $ | 0.75 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.10 |   |   |   | 108.80131 | % |   | $ | 0.4566 |   |   |   | 22.83 |   |
| February 17, 2009 |   |   | 8,950 |   |   | $ | 0.83 |   | 3 Years |   | $ | 1.00 |   |   |   | 1.22 |   |   |   | 109.04322 | % |   | $ | 0.5219 |   |   |   | 4,671.01 |   |

| March 19, 2009    |   |   | 50     |   |   | $      | 0.68   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.21   |   |   |   | 109.80676 | %      |   | $      | 0.4057 |   |   |   | 20.29     |   |
|-------------------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|
| April 13, 2009    |   |   | 10,650 |   |   | $      | 0.60   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.27   |   |   |   | 110.59204 | %      |   | $      | 0.3469 |   |   |   | 3,694.49  |   |
| May 18, 2009      |   |   | 3,200  |   |   |   | 0.70   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.36   |   |   |   | 111.77410 | %      |   | $      | 0.4288 |   |   |   | 1,372.15  |   |
| May 19 2009       |   |   | 50     |   |   | $      | 0.70   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.37   |   |   |   | 111.74849 | %      |   | $      | 0.4288 |   |   |   | 21.44     |   |
| November 5, 2009  |   |   | 16,000 |   |   | $      | 1.02   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.44   |   |   |   | 131.45892 | %      |   | $      | 0.7681 |   |   |   | 12,289.60 |   |
| December 21, 2009 |   |   | 256    |   |   | $      | 1.05   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.42   |   |   |   | 133.83768 | %      |   | $      | 0.8029 |   |   |   | 205.54    |   |
| January 25, 2010  |   |   | 7,500  |   |   | $      | 0.96   |   | 3 Years |   | $      | 1.00   |   |   |   | 1.40   |   |   |   | 134.80467 | %      |   | $      | 0.7268 |   |   |   | 5,451.00  |   |
| Total             |   |   | 49,306 |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   | $      | 28,486.21 |   |

| 7. | Stockholders’ Deficiency |
|----|--------------------------------|

| 8. | Related Party Transactions |
|----|----------------------------|

| 9. | Legal and Related Indemnification Arrangements with our Executives and Others |
|----|-------------------------------------------------------------------------------|

----

Index

| 10. | Tax Loss Carryforwards |
|-----|------------------------|

|                             |   | December 31, |       |   | December 31, |   |
|----------------------------------|--------|-------------------|------------|--------|--------------|--------|
|                             |   | 2009              |       |   | 2008         |   |
| Net operating loss carryforwards |   |              |       |   |         |   |
| Federal                          |   | $                 | 21,000,000 |   |         | $      | 19,000,000 |   |
| State                            |   | $                 | 14,000,000 |   |         | $      | 12,000,000 |   |

|                                     |   | December 31, |    |   | December 31, |   |
|------------------------------------------|--------|-------------------|---------|--------|--------------|--------|
|                                     |   | 2009              |    |   | 2008         |   |
| Business credits available in the future |   |              |    |   |         |   |
| Federal                                  |   | $                 | 960,000 |   |         | $      | 940,000 |   |
| State                                    |   | $                 | 40,000  |   |         | $      | 330,000 |   |

| 11.  | Supplemental Cash Flow Information |
|-----------|------------------------------------|

----

Index

| 12. | Subsequent Events |
|-----|-------------------|

| Date ofLoan or PromissoryNote and Warrant |   | AmountofLoan orNote |    | MaturityDate |             | Interest |   |   | NumberofWarrants |   |   | RiskFreeInterestRate |   |   | Volatility |   |   | ValuePerWarrant |   |     | TotalValueofWarrants |   |
|-------------------------------------------|--------|---------------------|---------|--------------|------------------|----------|--------|--------|------------------|--------|--------|----------------------|--------|--------|------------|--------|--------|-----------------|--------|----------|----------------------|--------|
| David Spiegel                             |   |                |    |         |             |     |   |   |             |   |   |                 |   |   |       |   |   |            |   |     |                 |   |
| April 16, 2010*                           |   | $                   | 6,000   |         | October 13, 2010 |     |   | 8.00   | %                |   |   | 600                  |   |   |       | 1.56   |   |            |   | 136.4302 | %                    |   | $ | 0.680 |   |   | $ | 408.00 |   |
| June 4, 2010*                             |   |                | 6,000   |         | December 1, 2010 |     |   | 8.00   | %                |   |   | 600                  |   |   |       | 1.17   |   |            |   | 153.1282 | %                    |   | $ | 0.374 |   |   |   | 224.40 |   |
| August 11, 2010                           |   |                | 100,000 |         | February 7, 2011 |     |   | 8.00   | %                |   |   | 10,000               |   |   |       | 0.81   |   |            |   | 157.1615 | %                    |   | $ | 0.2115 |   |   |   | 2,115.00 |   |
|                                      |   | $                   | 112,000 |         |             |     |   |   |             |   |   | 11,200               |   |   |       |   |   |            |   |     |                 |   |   |   |   |   | $ | 2,747.40 |   |

| Date ofLoan or PromissoryNote and Warrant |   | AmountofLoan orNote |    | MaturityDate |             | Interest |   |   | NumberofWarrants |   |   | RiskFreeInterestRate |   |   | Volatility |   |   | ValuePerWarrant |   |     | TotalValueofWarrants |   |
|-------------------------------------------|--------|---------------------|---------|--------------|------------------|----------|--------|--------|------------------|--------|--------|----------------------|--------|--------|------------|--------|--------|-----------------|--------|----------|----------------------|--------|
| Herbert M. Stein                          |   |                |    |         |             |     |   |   |             |   |   |                 |   |   |       |   |   |            |   |     |                 |   |
| April 16, 2010*                           |   | $                   | 56,000  |         | October 13, 2010 |     |   | 8.00   | %                |   |   | 5,600                |   |   |       | 1.56   |   |            |   | 136.4302 | %                    |   | $ | 0.680 |   |   | $ | 3,808.00 |   |
| June 4, 2010*                             |   |                | 89,000  |         | December 1, 2010 |     |   | 8.00   | %                |   |   | 8,900                |   |   |       | 1.17   |   |            |   | 153.1282 | %                    |   | $ | 0.374 |   |   |   | 3,328.60 |   |
| August 11, 2010                           |   |                | 45,700  |         | February 7, 2011 |     |   | 8.00   | %                |   |   | 4,570                |   |   |       | 0.81   |   |            |   | 157.1615 | %                    |   | $ | 0.2115 |   |   |   | 1,002.51 |   |
|                                      |   | $                   | 190,700 |         |             |     |   |   |             |   |   | 19,070               |   |   |       |   |   |            |   |     |                 |   |   |   |   |   | $ | 8,139.11 |   |

| Date ofLoan or PromissoryNote and Warrant                             |   | AmountofLoan orNote |   |   | MaturityDate |   |   | Interest |   |   | NumberofWarrants |   |   | RiskFreeInterestRate |   |   | Volatility |   |   | ValuePerWarrant |   |   | TotalValueofWarrants |   |
|-----------------------------------------------------------------------|--------|---------------------|--------|--------|--------------|--------|--------|----------|--------|--------|------------------|--------|--------|----------------------|--------|--------|------------|--------|--------|-----------------|--------|--------|----------------------|--------|
| Robert Schacter (TYJO Corp.   Money Purchase Pension Plan)* |   |                |   |   |         |   |   |     |   |   |             |   |   |                 |   |   |       |   |   |            |   |   |                 |   |
| July 9, 2010*                                                         |   |                | 25,000 |   |         |   |   |     |   |   |             |   |   |                 |   |   |       |   |   |            |   |   |                 |   |   |   |   |   |   |   |   |   |

| Date ofLoan or PromissoryNote and Warrant |   | AmountofLoan orNote |   | MaturityDate |             | Interest |   |   | NumberofWarrants |   |   | RiskFreeInterestRate |   |   | Volatility |   |   | ValuePerWarrant |   |     | TotalValueofWarrants |   |
|-------------------------------------------|--------|---------------------|--------|--------------|------------------|----------|--------|--------|------------------|--------|--------|----------------------|--------|--------|------------|--------|--------|-----------------|--------|----------|----------------------|--------|
| Others                                    |   |                |   |         |             |     |   |   |             |   |   |                 |   |   |       |   |   |            |   |     |                 |   |
| June 4, 2010                              |   | $                   | 20,000 |         | December 1, 2010 |     |   | 12.00  | %                |   |   | 27,500               |   |   |       | 1.71   |   |            |   | 153.1282 | %                    |   | $ | 0.374 |   |   | $ | 10,285.00 |   |

----

Index

|                     |   | Interest  |    |
|--------------------------|--------|-----------|---------|
| Note Holder              |   | Converted |    |
| Herbert M. Stein         |   | $         | 204,098 |   |
| Robert Schacter, et al   |   |      | 82,024  |   |
| Total interest converted |   | $         | 286,122 |   |

|                                          |   | Number of Interest |    |
|-----------------------------------------------|--------|--------------------|---------|
| Stock/Note Holder                             |   | Warrants Issued    |    |
| Herbert M. Stein                              |   |               | 118,510 |   |
| David Spiegel                                 |   |               | 119,666 |   |
| Robert Schacter et al                         |   |               | 322,000 |   |
| Others                                        |   |               | 99,306  |   |
| Total Warrants issued through August 11, 2010 |   |               | 659,482 |   |

----

Index

----

Index

ITEM 2 MANAGEMENT’S 

----

Index

|                               |   | For the Three-Month Period EndedMarch 31, |       |   | Cumulative fromRe-entering Development Stage on October 1, 2008to March 31, |   |
|------------------------------------|--------|-------------------------------------------|------------|--------|-----------------------------------------------------------------------------|--------|
|                               |   | 2010                                      |       |   | 2009                                                                        |   |   | 2010 |   |
|                               |   |                                      |       |   |                                                                        |   |   |   |   |
| Statement of Operations Data:      |   |                                      |       |   |                                                                        |   |   |   |   |
| Revenue                            |   | $                                         | —    |   |                                                                        | $      | — |   |   | $ | — |   |
| Costs and expenses                 |   |                                      | (328,830   | )      |                                                                        |   | (606,284 | ) |   |   | (3,061,360 | ) |
| Other Income (expenses)            |   |                                      | (127,311   | )      |                                                                        |   | (84,511 | ) |   |   | (583,507 | ) |
| Net Loss                           |   | $                                         | (456,141   | )      |                                                                        | $      | (690,795 | ) |   | $ | (3,644,867 | ) |
|                               |   |                                      |       |   |                                                                        |   |   |   |   |   |   |   |
| Shares Outstanding                 |   |                                      | 12,132,332 |   |                                                                        |   | 12,132,332 |   |   |   | 12,132,332 |   |
|                               |   |                                      |       |   |                                                                        |   |   |   |   |   |   |   |
|                               |   |                                      |       |   |                                                                        |   |   |   |   |   |   |   |
| Total Assets                       |   | $                                         | 229,524    |   |                                                                        | $      | 249,913 |   |   | $ | 229,524 |   |
| Stockholders’ deficiency     |   | $                                         | (6,473,529 | )      |                                                                        | $      | (4,595,945 | ) |   | $ | (3,644,867 | ) |
| Loss per share (basic and diluted) |   | $                                         | (0.04      | )      |                                                                        | $      | (0.06 | ) |   | $ | (0.30 | ) |

----

Index

----

Index

|                  |   | Interest Incurred for the Three Months Ended March 31, |    |
|-----------------------|--------|--------------------------------------------------------|---------|
|                  |   | 2010                                                   |    |   | 2009 |   |
| David Spiegel         |   | $                                                      | 45,758  |   |   | $ | 30,070 |   |
| Herbert M. Stein      |   |                                                   | 42,297  |   |   |   | 26,379 |   |
| Robert Schacter et al |   |                                                   | 26,166  |   |   |   | 25,637 |   |
| Others                |   |                                                   | 13,590  |   |   |   | 2,531 |   |
| Total                 |   | $                                                      | 127,811 |   |   | $ | 84,617 |   |

----

Index

| Herbert M. Stein       |   |
|------------------------|--------|
|                   |   |   |   |   |   |   |   |   |   |   |
| Date ofPromissory Note |   | Amount |   | MaturityDate |   | InitialInterest Rate |   |   | CurrentInterest Rate |   |
|                   |   |   |   |   |   |   |   |   |   |   |
| December 11, 2007      |   | $ | 250,000 |   | March 10, 2008 |   |   | 8.00 | % |   |   | 12.00 | % |
| February 21, 2008      |   |   | 100,000 |   | August 19, 2008 |   |   | 8.00 | % |   |   | 12.00 | % |
| March 20, 2008         |   |   | 50,000 |   | September 16, 2008 |   |   | 8.00 | % |   |   | 12.00 | % |
| April 1, 2008          |   |   | 50,000 |   | September 28, 2008 |   |   | 8.00 | % |   |   | 12.00 | % |
| May 15, 2008           |   |   | 50,000 |   | November 11, 2008 |   |   | 8.00 | % |   |   | 12.00 | % |
| June 16, 2008          |   |   | 35,000 |   | December 13, 2008 |   |   | 8.00 | % |   |   | 12.00 | % |
| June 18, 2008          |   |   | 40,000 |   | December 15, 2008 |   |   | 8.00 | % |   |   | 12.00 | % |
| July 15, 2008          |   |   | 30,000 |   | January 11, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| July 28, 2008          |   |   | 50,000 |   | January 24, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| August 12, 2008        |   |   | 35,000 |   | February  8, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| August 27, 2008        |   |   | 35,000 |   | February 23, 3009 |   |   | 8.00 | % |   |   | 12.00 | % |
| September 5, 2008      |   |   | 35,000 |   | March 4, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| October 27, 2008       |   |   | 25,000 |   | April 25, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| February 2, 2009       |   |   | 30,000 |   | August 1, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| February 17, 2009      |   |   | 10,000 |   | August 16 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| March 19, 2009         |   |   | 25,900 |   | September 15, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| April 13, 2009         |   |   | 33,000 |   | October 10, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| May 18, 2009           |   |   | 12,000 |   | November 14, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| July 1, 2009           |   |   | 20,000 |   | December 28, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| November 5, 2009       |   |   | 42,500 |   | May 4, 2010 |   |   | 8.00 | % |   |   | 12.00 | % |
| December 21, 2009      |   |   | 83,500 |   | June 19, 2010 |   |   | 8.00 | % |   |   | 12.00 | % |
| December 30, 2009      |   |   | 27,000 |   | January 25, 2010 |   |   | 8.00 | % |   |   | 12.00 | % |
| January 7, 2010        |   |   | 15,000 |   | January 25, 2010 |   |   | 8.00 | % |   |   | 12.00 | % |
| January 8, 2010        |   |   | 10,000 |   | January 25, 2010 |   |   | 8.00 | % |   |   | 12.00 | % |
| January 14, 2010       |   |   | 27,000 |   | January 25, 2010 |   |   | 8.00 | % |   |   | 12.00 | % |
| February 12, 2010      |   |   | 66,000 |   | August 21, 2010 |   |   | 8.00 | % |   |   | 8.00 | % |
| April 16, 2010         |   |   | 86,500 |   | October 13, 2010 |   |   | 8.00 | % |   |   | 8.00 | % |
| June 4, 2010           |   |   | 116,000 |   | December 1, 2010 |   |   | 8.00 | % |   |   | 8.00 | % |
| August 11, 2010        |   |   | 45,700 |   | February 7, 2011 |   |   | 8.00 | %  |   |   | 8.00 | %  |
|                   |   | $ | 1,435,100 |   |   |   |   |   |   |   |   |   |   |

----

Index

| David Spiegel          |   |
|------------------------|--------|
|                   |   |   |   |   |   |   |   |   |   |   |
| Date ofPromissory Note |   | Amount |   | MaturityDate |   | InitialInterest Rate |   |   | CurrentInterest Rate |   |
|                   |   |   |   |   |   |   |   |   |   |   |
| December 11, 2007      |   | $ | 150,000 |   | March 10, 2008 |   |   | 8.00 | % |   |   | 12.00 | % |
| February 21, 2008      |   |   | 100,000 |   | August 19, 2008 |   |   | 8.00 | % |   |   | 12.00 | % |
| March 20, 2008         |   |   | 100,000 |   | September 16, 2008 |   |   | 8.00 | % |   |   | 12.00 | % |
| April 1, 2008          |   |   | 50,000 |   | September 28, 2008 |   |   | 8.00 | % |   |   | 12.00 | % |
| May 15, 2008           |   |   | 50,000 |   | November 11, 2008 |   |   | 8.00 | % |   |   | 12.00 | % |
| June 16, 2008          |   |   | 65,000 |   | December 13, 2008 |   |   | 8.00 | % |   |   | 12.00 | % |
| June 18, 2008          |   |   | 50,000 |   | December 15, 2008 |   |   | 8.00 | % |   |   | 12.00 | % |
| July 15, 2008          |   |   | 50,000 |   | January 11, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| July 28, 2008          |   |   | 50,000 |   | January 24, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| August 12, 2008        |   |   | 35,000 |   | February 8, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| August 27, 2008        |   |   | 35,000 |   | February 23, 3009 |   |   | 8.00 | % |   |   | 12.00 | % |
| September 5, 2008      |   |   | 35,000 |   | March 4, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| October 27, 2008       |   |   | 35,000 |   | April 25, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| January 6, 2009        |   |   | 80,000 |   | July 5, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| March 19, 2009         |   |   | 64,000 |   | September 15, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| May 19, 2009           |   |   | 35,000 |   | November 15, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| June 10, 2009          |   |   | 25,000 |   | December 7, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| July 1, 2009           |   |   | 32,000 |   | December 28, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| November 5, 2009       |   |   | 103,000 |   | May 4, 2010 |   |   | 8.00 | % |   |   | 12.00 | % |
| December 21, 2009      |   |   | 68,000 |   | June 19, 2010 |   |   | 8.00 | % |   |   | 12.00 | % |
| January 25, 2010       |   |   | 4,665 |   | July 24, 2010 |   |   | 8.00 | % |   |   | 12.00 | % |
| April 16, 2010         |   |   | 16,000 |   | October 13, 2010 |   |   | 8.00 | % |   |   | 8.00 | % |
| June 4, 2010           |   |   | 14,000 |   | December 1, 2010 |   |   | 8.00 | % |   |   | 8.00 | % |
| August 11, 2010        |   |   | 100,000 |   | February 7, 2011 |   |   | 8.00 | % |   |   | 8.00 | % |
|                   |   | $ | 1,346,665 |   |   |   |   |   |   |   |   |   |   |

|   Robert Schacter et al |                                                                    |
|------------------------------|-------------------------------------------------------------------------|
|                         |                                                                    |   |   |   |   |   |   |   |   |   |   |
|                         |                                                                    |   |   |   |   |   |   |   |   |   |   |
| Date ofPromissory Notes      | Name onPromissory Note                                                  |   | Amount |   | MaturityDate |   | InitialInterest Rate |   |   | CurrentInterest Rate |   |
|                         |                                                                    |   |   |   |   |   |   |   |   |   |   |
| September 5, 2008            | TYJO Corporation Money Purchase Pension Plan                            |   | $ | 100,000 |   | March 4, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| September 5 2008             | Mr. Robert Schacter, as Custodian for  Tyler Schacter UTMA/CA |   |   | 20,000 |   | March 4, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| September 5 2008             | Mr. Robert Schacter, as Custodian for Joseph Schacter UTMA/CA           |   |   | 20,000 |   | March 4, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| October 27, 2008             | TYJO Corporation Money Purchase Pension Plan                            |   |   | 100,000 |   | April 25, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| January 8, 2009              | TYJO Corporation Money Purchase Pension Plan                            |   |   | 100,000 |   | July 7, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| February 2, 2009             | TYJO Corporation Money Purchase Pension Plan                            |   |   | 50,000 |   | August 1, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| February 17, 2009            | TYJO Corporation Money Purchase Pension Plan                            |   |   | 50,000 |   | August 16 ,2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| March 19, 2009               | TYJO Corporation Money Purchase Pension Plan                            |   |   | 50,000 |   | September 15, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| April 13, 2009               | TYJO Corporation Money Purchase Pension Plan                            |   |   | 20,000 |   | October 10, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |

| June 10, 2009    | TYJO Corporation Money Purchase Pension Plan |   |   | 25,000  |   | December 7, 2009 |   |   | 8.00   | %      |   |   | 12.00  | %      |
|------------------|----------------------------------------------|--------|--------|---------|--------|------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| November 5, 2009 | TYJO Corporation Money Purchase Pension Plan |   |   | 50,000  |   | May 10, 2010     |   |   | 8.00   | %      |   |   | 12.00  | %      |
| May 24, 2010*    | TYJO Corporation Money Purchase Pension Plan |   |   | 50,000  |   |             |   |   |   |   |   |   |   |   |
| June 4, 2010*    | TYJO Corporation Money Purchase Pension Plan |   |   | 25,000  |   |             |   |   |   |   |   |   |   |   |
| July 9, 2010**   | TYJO Corporation Money Purchase Pension Plan |   |   | 25,000  |   |             |   |   |   |   |   |   |   |   |
|             |                                         |   | $      | 685,000 |   |             |   |   |   |   |   |   |   |   |

----

Index

| Others                 |   |
|------------------------|--------|
|                   |   |   |   |   |   |   |   |   |   |   |
| Date ofPromissory Note |   | Amount |   | MaturityDate |   | InitialInterest Rate |   |   | CurrentInterest Rate |   |
|                   |   |   |   |   |   |   |   |   |   |   |
| July 28, 2008          |   | $ | 20,000 |   | January 24, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| October 27, 2008       |   |   | 6,000 |   | April 25, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| January 6, 2009        |   |   | 500 |   | July 6, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| February 17, 2009      |   |   | 37,000 |   | August 16, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| March 19, 2009         |   |   | 500 |   | September 15, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| April 13, 2009         |   |   | 31,500 |   | October 10, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| April 13, 2009         |   |   | 30,000 |   | October 10, 2009 |   |   | 12.00 | % |   |   | 16.00 | % |
| April 16, 2010         |   |   | 20,000 |   | October 13, 2010 |   |   | 12.00 | % |   |   | 12.00 | % |
| May 18, 2009           |   |   | 32,000 |   | November 14, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| May 19, 2009           |   |   | 500 |   | November 15, 2009 |   |   | 8.00 | % |   |   | 12.00 | % |
| November 5, 2009       |   |   | 70,000 |   | May 4, 2010 |   |   | 8.00 | % |   |   | 12.00 | % |
| December 21, 2009      |   |   | 2,563 |   | June 19, 2010 |   |   | 8.00 | % |   |   | 12.00 | % |
| January 25, 2010       |   |   | 30,000 |   | July 24, 2010 |   |   | 8.00 | % |   |   | 12.00 | % |
| July 13, 2010*         |   |   | 20,000 |   |   |   |   |   |   |   |   |   |   |
| July 16, 2010*         |   |   | 25,000 |   |   |   |   |   |   |   |   |   |   |
|                   |   | $ | 325,563 |   |   |   |   |   |   |   |   |   |   |

----

Index

| Name on               |   | Combined Amounts Loaned 3 Months ended March 31, |    |
|-----------------------|--------|--------------------------------------------------|---------|
| Promissory Note       |   | 2010                                             |    |   | 2009 |   |
|                  |   |                                             |    |   |   |   |
| David Spiegel         |   | $                                                | 18,000  |   |   | $ | 64,000 |   |
| Herbert M. Stein      |   |                                             | 175,500 |   |   |   | 98,900 |   |
| Robert Schacter et al |   |                                             | — |   |   |   | 270,000 |   |
| Others                |   |                                             | 30,000  |   |   |   | 97,500 |   |
|                  |   | $                                                | 223,500 |   |   | $ | 530,400 |   |

----

Index

----

Index

EM

EM 

----

Index

EM

----

Index

ITEM 1A 

----

Index

| SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS |
|---------------------------------------------------|

|   | · | anticipated financing activities; |
|--------|--------|-----------------------------------|

|   | · | anticipated strategic alliances or arrangements with development or marketing partners; |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | anticipated research and product development results; |
|--------|--------|-------------------------------------------------------|

----

Index

|   | · | projected development and commercialization timelines; |
|--------|--------|--------------------------------------------------------|

|   | · | descriptions of plans or objectives of management for future operations, products or services; |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | · | forecasts of future economic performance; and |
|--------|--------|-----------------------------------------------|

|   | · | descriptions or assumptions underlying or relating to any of the above items. |
|--------|--------|-------------------------------------------------------------------------------|

EM

M

| David Spiegel          |               |   |                                                |
|------------------------|--------------------|--------|-----------------------------------------------------|
| Date ofPromissory Note | MaturityDate       |   | AmountAccruing PostMaturity InterestInterest at 12% |   |
|                   |               |   |                                                |   |
| December 12, 2007      | March 10, 2008     |   | $                                                   | 150,000 |   |
| February 21, 2008      | August 19, 2008    |   |                                                | 100,000 |   |
| March 20, 2008         | September 16, 2008 |   |                                                | 100,000 |   |
| April 1, 2008          | September 28, 2008 |   |                                                | 50,000 |   |
| May 15, 2008           | November 11, 2008  |   |                                                | 50,000 |   |
| June 16, 2008          | December 13, 2008  |   |                                                | 65,000 |   |
| June 18, 2008          | December 15, 2008  |   |                                                | 50,000 |   |
| July 15, 2008          | January 11, 2009   |   |                                                | 50,000 |   |
| July 28, 2008          | January 24, 2009   |   |                                                | 50,000 |   |
| August 12, 2008        | February 8, 2009   |   |                                                | 35,000 |   |
| August 27, 2008        | February 23, 2009  |   |                                                | 35,000 |   |
| September 5, 2008      | March 4, 2009      |   |                                                | 35,000 |   |
| October 27,2008        | April 25 ,2009     |   |                                                | 35,000 |   |
| January 9, 2009        | July 5, 2009       |   |                                                | 80,000 |   |
| March 19, 2009         | September 15, 2009 |   |                                                | 64,000 |   |
| May 19, 2009           | November 15, 2009  |   |                                                | 35,000 |   |
| June 10, 2009          | December 7, 2009   |   |                                                | 25,000 |   |
| July 1, 2009           | December 28, 2009  |   |                                                | 32,000 |   |
| Total                  |               |   | $                                                   | 1,041,000 |   |

----

Index

| Herbert M. Stein       |               |
|------------------------|--------------------|
| Date ofPromissory Note | MaturityDate       |   | AmountAccruing PostMaturity InterestInterest at 12% |   |
|                   |               |   |   |   |
| December 12, 2007      | March 10, 2008     |   | $ | 250,000 |   |
| February 21, 2008      | August 19, 2008    |   |   | 100,000 |   |
| March 20, 2008         | September 16, 2008 |   |   | 50,000 |   |
| April 1, 2008          | September 28, 2008 |   |   | 50,000 |   |
| May 15, 2008           | November 11, 2008  |   |   | 50,000 |   |
| June 16, 2008          | December 13, 2008  |   |   | 35,000 |   |
| June 18, 2008          | December 15, 2008  |   |   | 40,000 |   |
| July 15, 2008          | January 11, 2009   |   |   | 30,000 |   |
| July 28, 2008          | January 24, 2009   |   |   | 50,000 |   |
| August 12, 2008        | February 8, 2009   |   |   | 35,000 |   |
| August 27, 2008        | February 23, 2009  |   |   | 35,000 |   |
| September 5, 2008      | March 4, 2009      |   |   | 35,000 |   |
| October 27, 2008       | April 25, 2009     |   |   | 25,000 |   |
| February 2, 2009       | August 1, 2009     |   |   | 30,000 |   |
| February 17, 2009      | August 16, 2009    |   |   | 10,000 |   |
| March 19, 2009         | September 15, 2009 |   |   | 25,900 |   |
| April 13, 2009         | October 10, 2009   |   |   | 33,000 |   |
| May 18, 2009           | November 14, 2009  |   |   | 12,000 |   |
| July 1, 2009           | December 28, 2009  |   |   | 20,000 |   |
| Total                  |               |   | $ | 915,900 |   |

| Robert Schacter et al  |               |
|------------------------|--------------------|
| Date ofPromissory Note | MaturityDate       |   | AmountAccruing PostMaturity InterestInterest at 12% |   |
|                   |               |   |   |   |
| September 5, 2008      | March 4, 2009      |   | $ | 140,000 |   |
| October 27, 2008       | April 25, 2009     |   |   | 100,000 |   |
| January 8, 2009        | July 7, 2009       |   |   | 100,000 |   |
| February 2, 2009       | August 1, 2009     |   |   | 50,000 |   |
| February 17, 2009      | August 16, 2009    |   |   | 50,000 |   |
| March 19, 2009         | September 15, 2009 |   |   | 50,000 |   |
| April 13, 2009         | October 10, 2009   |   |   | 20,000 |   |
| June 10, 2009          | December 7, 2009   |   |   | 25,000 |   |
| Total                  |               |   | $ | 535,000 |   |

----

Index

| Others                 |               |
|------------------------|--------------------|
| Date ofPromissory Note | MaturityDate       |   | AmountAccruing PostMaturity InterestInterest at 12% |   |
|                   |               |   |   |   |
| July 28, 2008          | January 24, 2009   |   | $ | 20,000 |   |
| October 27, 2008       | April 25, 2009     |   |   | 6,000 |   |
| January 6, 2009        | July 5, 2009       |   |   | 500 |   |
| February 17, 2009      | August 16, 2009    |   |   | 37,000 |   |
| March 19, 2009         | September 15, 2009 |   |   | 500 |   |
| April 13, 2009         | October 10, 2009   |   |   | 31,500 |   |
| April 13, 2009*        | October 10, 2009   |   |   | 30,000 |   |
| May 18, 2009           | November 14, 2009  |   |   | 32,000 |   |
| May 19, 2009           | November 15, 2009  |   |   | 500 |   |
|                   |               |   | $ | 158,000 |   |

ITEM 4T 

EM

TE

| Exhibit |   |                                                                                                                                                                                         |
|---------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Number  |   | Description                                                                                                                                                                                  |
| 10.1+   |   | Promissory Note dated as of January 25, 2010 by and between Apogee Technology, Inc. and David Spiegel.  (Previously filed on a Current Report on Form 8-K, January 27, 2010.)      |
| 10.2+   |   | Promissory Note dated as of January 25, 2010 by and between Apogee Technology, Inc. and Herbert M. Stein.  (Previously filed on a Current Report on Form 8-K, January 27, 2010.)   |
| 10.3+   |   | Promissory Note dated as of January 25, 2009 by and between Apogee Technology, Inc. and Friedrich Reiner.  (Previously filed on a Current Report on Form 8-K, January 27, 2010.)   |
| 10.4+   |   | Form of Warrant. (Previously filed on a Current Report on Form 8-K, January 27, 2010.)                                                                                                       |
| 10.5+   |   | Promissory Note dated as of February 22, 2010 by and between Apogee Technology, Inc. and Herbert M. Stein.  (Previously filed on a Current Report on Form 8-K, February 24, 2010.) |
| 10.6+   |   | Form of Warrant. (Previously filed on a Current Report on Form 8-K, February 24, 2010.)                                                                                                      |
|    |   |                                                                                                                                                                                         |
| 31.1    |   | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer.                                                                                          |
| 31.2    |   | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer.                                                                                          |
| 32      |   | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer and Chief Financial Officer.                                                              |

----

Index

NAT

|                             | APOGEE TECHNOLOGY, INC.                                        |
|----------------------------------|----------------------------------------------------------------|
|                             |                                                           |
| Date: August  13, 2010 | By:                                                            | /s/ | Herbert M. Stein |   |
|                             | Name: Herbert M. Stein                                         |
|                             | Title: Chairman of the Board,                                  |
|                             | President, Chief Executive Officer                             |
|                             | (principal executive officer)                                  |
|                             |                                                           |
|                             |                                                           |
|                             | APOGEE TECHNOLOGY, INC.                                        |
|                             |                                                           |
| Date: August  13, 2010 | By:                                                            | /s/ | Paul J. Murphy |   |
|                             | Name: Paul J. Murphy                                           |
|                             | Title: Chief Financial Officer and Vice President of Finance   |
|                             | (principal financial officer and principal accounting officer) |

----