##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 30, 2010
 o
    
    Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission file number:001-33304
 Converted Organics Inc.
  Delaware
(State or other jurisdiction of incorporation or organization)
    
    20-4075963
(I.R.S. Employer Identification No.)
 137A Lewis Wharf, Boston, MA 02110
 (617) 624-0111
  þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ




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##### 



INDEX
 Page No.PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets as of June 30, 2010 (unaudited) and December 31, 2009 (audited)
    
    
    3Consolidated Statements of Operations for the three and six month periods ended June 30, 2010 and 2009
(unaudited)
    
    
    4Consolidated Statement of Changes in Shareholders Equity (Deficit) for the six month period ended June
30, 2010 (unaudited)
    
    
    5Consolidated Statements of Cash Flows for the six month periods ended June 30, 2010 and 2009 (unaudited)
    
    
    6Notes to Consolidated Interim Financial Statements (unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    21PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    21Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    22Item 3. Defaults Upon Senior Securities
    
    
    22Item 4. [Removed and Reserved]
    
    
    22Item 5. Other Information
    
    
    22Item 6. Exhibits
    
    
    22EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



Item 1. Financial Statements
 CONVERTED ORGANICS INC.
 
 CONSOLIDATED BALANCE SHEETS
 June 30, 2010
    
    
    December 31, 2009(Unaudited)
    
    
    (Audited)ASSETSCURRENT ASSETSCash
    
    $
    2,053,028
    
    
    $
    10,708,807Restricted cash
    
    
    583,393
    
    
    
    583,393Accounts receivable, net
    
    
    1,071,195
    
    
    
    140,657Inventories
    
    
    213,519
    
    
    
    448,748Prepaid rent
    
    
    692,928
    
    
    
    600,684Other prepaid expenses
    
    
    669,809
    
    
    
    102,442Total current assets
    
    
    5,283,872
    
    
    
    12,584,731Deposits
    
    
    815,390
    
    
    
    780,686Restricted cash
    
    
    29,769
    
    
    
    29,769Other assets
    
    
    500,000
    
    
    
    Property and equipment, net
    
    
    18,068,637
    
    
    
    18,626,910Construction-in-progress
    
    
    354,521
    
    
    
    311,015Capitalized bond costs, net
    
    
    790,507
    
    
    
    814,341Intangible assets, net
    
    
    1,851,615
    
    
    
    1,995,619Total assets
    
    $
    27,694,311
    
    
    $
    35,143,071LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)CURRENT LIABILITIESTerm notes payable  current
    
    $
    1,777,468
    
    
    $
    2,274,413Accounts payable
    
    
    1,980,104
    
    
    
    1,789,332Accrued compensation, officers, directors and consultants
    
    
    652,696
    
    
    
    769,056Accrued legal and other expenses
    
    
    601,492
    
    
    
    406,403Accrued interest
    
    
    598,588
    
    
    
    618,526Convertible note payable
    
    
    198,447
    
    
    
    355,164Capital lease obligations  current
    
    
    12,342
    
    
    
    12,833Total current liabilities
    
    
    5,821,137
    
    
    
    6,225,727Capital lease obligation, net of current portion
    
    
    22,464
    
    
    
    27,742Term notes payable, net of current portion
    
    
    102,151
    
    
    
    973,339Derivative liabilities
    
    
    2,096,109
    
    
    
    1,626,742Convertible note payable, net of current portion
    
    
    
    
    
    
    17,767Bonds payable
    
    
    17,500,000
    
    
    
    17,500,000Total liabilities
    
    
    25,541,861
    
    
    
    26,371,317COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    SHAREHOLDERS EQUITY (DEFICIT)Preferred stock, $.0001 par value, authorized
10,000,000 shares; no shares issued and outstanding
    
    
    
    
    
    
    Common stock, $.0001 par value, authorized 250,000,000 shares
at June 30, 2010 and 75,000,000 shares at December 31, 2009
    
    
    4,057
    
    
    
    3,777Additional paid-in capital
    
    
    61,745,571
    
    
    
    58,660,042Accumulated deficit
    
    
    (59,597,178
    )
    
    
    (49,892,065
    )Total shareholders equity
    
    
    2,152,450
    
    
    
    8,771,754Total liabilities and shareholders equity
    
    $
    27,694,311
    
    
    $
    35,143,071
 The accompanying notes are an integral part of these consolidated financial statements.
 3




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##### Table of Contents



CONVERTED ORGANICS INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (UNAUDITED)
 Three month periods ended
    
    
    Six month periods endedJune 30, 2010
    
    
    June 30, 2009
    
    
    June 30, 2010
    
    
    June 30, 2009Revenues
    
    $
    1,825,607
    
    
    $
    992,364
    
    
    $
    2,685,433
    
    
    $
    1,484,203Cost of goods sold
    
    
    3,239,316
    
    
    
    2,113,074
    
    
    
    5,205,417
    
    
    
    3,757,264Gross loss
    
    
    (1,413,709
    )
    
    
    (1,120,710
    )
    
    
    (2,519,984
    )
    
    
    (2,273,061
    )Operating expensesGeneral and administrative expenses
    
    
    2,489,216
    
    
    
    2,502,643
    
    
    
    6,578,717
    
    
    
    4,175,661Research and development
    
    
    79,800
    
    
    
    12,116
    
    
    
    143,859
    
    
    
    179,500Depreciation expense
    
    
    2,911
    
    
    
    306,036
    
    
    
    5,730
    
    
    
    626,216Amortization of capitalized costs
    
    
    75,370
    
    
    
    79,251
    
    
    
    150,741
    
    
    
    180,542Amortization of license
    
    
    8,549
    
    
    
    4,125
    
    
    
    17,097
    
    
    
    8,250Loss from operations
    
    
    (4,069,555
    )
    
    
    (4,024,881
    )
    
    
    (9,416,128
    )
    
    
    (7,443,230
    )Other income/(expenses)Interest income
    
    
    253
    
    
    
    11,952
    
    
    
    534
    
    
    
    22,247Derivative gain/(loss)
    
    
    1,133,884
    
    
    
    2,886,460
    
    
    
    498,729
    
    
    
    4,298,445Other income
    
    
    69
    
    
    
    39,201
    
    
    
    69
    
    
    
    39,201Interest expense
    
    
    (390,071
    )
    
    
    (2,123,061
    )
    
    
    (788,317
    )
    
    
    (4,029,813
    )744,135
    
    
    
    814,552
    
    
    
    (288,985
    )
    
    
    330,080Loss before provision for income taxes
    
    
    (3,325,420
    )
    
    
    (3,210,329
    )
    
    
    (9,705,113
    )
    
    
    (7,113,150
    )Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (3,325,420
    )
    
    $
    (3,210,329
    )
    
    $
    (9,705,113
    )
    
    $
    (7,113,150
    )Net loss per share, basic and diluted
    
    $
    (0.08
    )
    
    $
    (0.20
    )
    
    $
    (0.25
    )
    
    $
    (0.59
    )Weighted average common shares outstanding
    
    
    39,930,049
    
    
    
    15,937,329
    
    
    
    38,902,816
    
    
    
    11,985,904
 The accompanying notes are an integral part of these consolidated financial statements.
 4




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##### Table of Contents



CONVERTED ORGANICS INC.
 
 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY (DEFICIT)
 FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2010
 (UNAUDITED)
 Common Stock
    
    
    
    
    
    
    
    
    
    
    TotalShares Issued and
    
    
    
    
    
    
    Additional
    
    
    Accumulated
    
    
    Owners EquityOutstanding
    
    
    Amount
    
    
    Paid-in Capital
    
    
    Deficit
    
    
    (Deficit)Balance, December 31, 2009
    
    
    37,774,208
    
    
    $
    3,777
    
    
    $
    58,660,042
    
    
    $
    (49,892,065
    )
    
    $
    8,771,754Stock options
    
    
    
    
    
    
    
    
    
    
    1,299,152
    
    
    
    
    
    
    
    1,299,152Common stock issued upon conversion of convertible notes payable and accrued
interest
    
    
    181,500
    
    
    
    18
    
    
    
    194,325
    
    
    
    
    
    
    
    194,343Common stock issued as compensation
    
    
    165,000
    
    
    
    17
    
    
    
    160,033
    
    
    
    
    
    
    
    160,050Issuance of common stock and warrants
    
    
    2,400,000
    
    
    
    240
    
    
    
    1,398,024
    
    
    
    
    
    
    
    1,398,264Common stock issued upon exercise of
employee stock options
    
    
    50,000
    
    
    
    5
    
    
    
    33,995
    
    
    
    
    
    
    
    34,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,705,113
    )
    
    
    (9,705,113
    )Balance, June 30, 2010
    
    
    40,570,708
    
    
    $
    4,057
    
    
    $
    61,745,571
    
    
    $
    (59,597,178
    )
    
    $
    2,152,450
 The accompanying notes are an integral part of these consolidated financial statements.
 5




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##### Table of Contents



CONVERTED ORGANICS INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 Six month periods endedJune 30, 2010
    
    
    June 30, 2009CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (9,705,113
    )
    
    $
    (7,113,150
    )Adjustments to reconcile net loss to net cash
used in operating activities:Deconsolidation of variable interest entity
    
    
    
    
    
    
    (596,170
    )Amortization of intangible assets  license
    
    
    17,097
    
    
    
    8,250Amortization of capitalized bond costs
    
    
    23,834
    
    
    
    23,835Amortization of deferred financing fees
    
    
    
    
    
    
    22,042Amortization of intangible assets
    
    
    126,907
    
    
    
    134,665Depreciation of fixed assets
    
    
    879,123
    
    
    
    1,015,444Beneficial conversion feature
    
    
    
    
    
    
    230,492Amortization of discounts attributable to warrants on private financing
    
    
    
    
    
    
    1,330,313Non-cash interest expense  private financing
    
    
    
    
    
    
    658,597Common stock issued for extension of convertible note payable
    
    
    
    
    
    
    562,000Common stock issued as compensation
    
    
    160,050
    
    
    
    120,313Stock option compensation expense
    
    
    1,299,152
    
    
    
    190,022Warrants issued in connection with private financing and equity transactions
    
    
    
    
    
    
    662,479Derivative gain
    
    
    (498,729
    )
    
    
    (4,298,445
    )Changes in operating assets and liabilities:(Increase) decrease in:Accounts receivable
    
    
    (930,538
    )
    
    
    (262,558
    )Inventory
    
    
    235,229
    
    
    
    (118,243
    )Prepaid expenses and other current assets
    
    
    (659,611
    )
    
    
    (154,818
    )Other assets
    
    
    
    
    
    
    94,250Deposits
    
    
    (34,704
    )
    
    
    108,713Increase (decrease) in:Accounts payable and other accrued expenses
    
    
    385,861
    
    
    
    3,195,195Accrued compensation  officers, directors and consultants
    
    
    (116,360
    )
    
    
    (40,899
    )Accrued interest
    
    
    (79
    )
    
    
    133,467Other
    
    
    
    
    
    
    (39,201
    )Net cash used in operating activities
    
    
    (8,817,881
    )
    
    
    (4,133,407
    )CASH FLOWS FROM INVESTING ACTIVITIESPurchase of fixed assets
    
    
    (320,850
    )
    
    
    (3,512,559
    )Release of restricted cash
    
    
    
    
    
    
    2,527,463Construction costs
    
    
    (43,506
    )
    
    
    Other assets
    
    
    (500,000
    )
    
    
    Net cash used in investing activities
    
    
    (864,356
    )
    
    
    (985,096
    )CASH FLOWS FROM FINANCING ACTIVITIESRepayment of term notes
    
    
    (1,368,133
    )
    
    
    (197,990
    )Repayment of capital lease obligations
    
    
    (5,769
    )
    
    
    (6,888
    )Members contributions
    
    
    
    
    
    
    230,983Members distributions
    
    
    
    
    
    
    (201,630
    )Net proceeds from exercise of options
    
    
    34,000
    
    
    
    1,965,000Net proceeds from stock offering
    
    
    2,366,360
    
    
    
    1,928,000Net proceeds from nonconvertible short-term note
    
    
    
    
    
    
    1,182,500Repayment of nonconvertible short-term note
    
    
    
    
    
    
    (1,330,313
    )Repayment of mortgage payable
    
    
    
    
    
    
    (943
    )Net cash provided by financing activities
    
    
    1,026,458
    
    
    
    3,568,719NET DECREASE IN CASH
    
    
    (8,655,779
    )
    
    
    (1,549,784
    )Cash, beginning of period
    
    
    10,708,807
    
    
    
    3,357,940Cash, end of period
    
    $
    2,053,028
    
    
    $
    1,808,156Supplemental cash flow information:Cash paid during the period in:Interest
    
    $
    788,396
    
    
    $
    1,031,973Non-cash financing activities:Equipment acquired through assumption of capital lease
    
    $
    
    
    
    $
    52,979Equipment acquired through assumption of term note
    
    
    
    
    
    
    118,250Common stock issued upon conversion of convertible notes payable and accrued interest
    
    
    194,343
    
    
    
    6,225,595Fair value of derivative issued
    
    
    968,096
    
    
    
    1,841,097Discount on warrants issued in connection with financings
    
    
    
    
    
    
    1,330,313
 The accompanying notes are an integral part of these consolidated financial statements.
 6




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##### Table of Contents



CONVERTED ORGANICS INC.
 
 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS  (UNAUDITED)
 NOTE 1  BASIS OF PRESENTATION AND NATURE OF OPERATIONS
   NATURE OF OPERATIONS
        7




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##### Table of Contents



CONVERTED ORGANICS INC.
 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS  CONTINUED  (UNAUDITED)
 NOTE 2  MANAGEMENTS PLAN OF OPERATION
     NOTE 3  NEWLY ADOPTED ACCOUNTING STANDARDS
  NOTE 4  INVENTORIES
  2010
    
    
    2009Finished goods
    
    $
    174,852
    
    
    $
    252,860Raw materials
    
    
    38,667
    
    
    
    195,888Total inventories
    
    $
    213,519
    
    
    $
    448,748
 8




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##### Table of Contents



CONVERTED ORGANICS INC.
 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS  CONTINUED  (UNAUDITED)
 NOTE 5  DEBT
 TERM NOTES
    BOND FINANCING
  CONVERTIBLE NOTE PAYABLE
  NOTE 6  DERIVATIVE INSTRUMENTS
  9




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##### Table of Contents



CONVERTED ORGANICS INC.
 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS  CONTINUED  (UNAUDITED)
 NOTE 6  DERIVATIVE INSTRUMENTS (Continued)
  (also see Note 7)
 NOTE 7  OWNERS EQUITY (DEFICIT)
    10




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CONVERTED ORGANICS INC.
 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS  CONTINUED  (UNAUDITED)
 NOTE 7  OWNERS EQUITY (DEFICIT) (Continued)
 WARRANTS
  Class B
    
    
    Class C
    
    
    Class D
    
    
    Class E
    
    
    Class F
    
    
    Class G
    
    
    Class H
    
    
    Class IWarrants
    
    
    Warrants
    
    
    Warrants
    
    
    Warrants
    
    
    Warrants
    
    
    Warrants
    
    
    Warrants
    
    
    WarrantsExercise
    
    
    Exercise
    
    
    Exercise
    
    
    Exercise
    
    
    Exercise
    
    
    Exercise
    
    
    Exercise
    
    
    ExercisePrice $11.00
    
    
    Price $1.00
    
    
    Price $1.02
    
    
    Price $1.63
    
    
    Price $1.25
    
    
    Price $1.25
    
    
    Price $1.30
    
    
    Price $1.06Outstanding at
December 31, 2009
    
    
    4,932,438
    
    
    
    885,000
    
    
    
    415,000
    
    
    
    1,500,000
    
    
    
    585,000
    
    
    
    2,500,000
    
    
    
    17,250,000
    
    
    
    Issued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,163,362Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Canceled
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at
June 30, 2010
    
    
    4,932,438
    
    
    
    885,000
    
    
    
    415,000
    
    
    
    1,500,000
    
    
    
    585,000
    
    
    
    2,500,000
    
    
    
    17,250,000
    
    
    
    1,163,362Exercisable at June
30, 2010
    
    
    4,932,438
    
    
    
    885,000
    
    
    
    415,000
    
    
    
    1,500,000
    
    
    
    585,000
    
    
    
    2,500,000
    
    
    
    17,250,000
    
    
    
    
 NOTE 8  FAIR VALUE MEASUREMENTS
     BalanceObservable Inputs
    
    
    June 30, 2010
    
    
    December 31, 2009Derivative liabilities
    
    Level 3
    
    $
    2,096,109
    
    
    $
    1,626,742
 11




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##### Table of Contents



CONVERTED ORGANICS INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS  CONTINUED  (UNAUDITED)
 NOTE 8  FAIR VALUE MEASUREMENTS (Continued)
  Three months ended
    
    
    Six months endedBalance, beginning of period
    
    $
    2,261,897
    
    
    $
    1,626,742Fair value of derivatives issued
    
    
    968,096
    
    
    
    968,096Derivative (gain) loss
    
    
    (1,133,884
    )
    
    
    (498,729
    )Balance, end of period
    
    $
    2,096,109
    
    
    $
    2,096,109
  NOTE 9  STOCK OPTION PLAN
  Options Outstanding
    
    
    Price Per ShareOutstanding at December 31, 2009
    
    
    1,230,295
    
    
    $
    3.54Granted
    
    
    2,508,500
    
    
    
    .68Exercised
    
    
    50,000
    
    
    
    .68Canceled
    
    
    
    
    
    
    Outstanding at June 30, 2010
    
    
    3,788,795
    
    
    $
    1.63Exercisable at June 30, 2010
    
    
    3,638,795
    
    
    $
    1.63
  NOTE 10 COMMITMENTS AND CONTINGENCIES
 LEASE COMMITMENT
  Years ending December 31,2010 (July 1, 2010 through December 31, 2010)
    
    $
    638,1892011
    
    
    1,291,1822012
    
    
    1,297,8452013
    
    
    1,202,2812014
    
    
    1,214,4792015 and thereafter
    
    
    8,359,440$
    14,003,416
 LOAN COMMITMENT
  12




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##### Table of Contents



CONVERTED ORGANICS INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS  CONTINUED  (UNAUDITED)
 NOTE 10 COMMITMENTS AND CONTINGENCIES (Continued)
 PURCHASE COMMITMENT
  LEGAL PROCEEDINGS
   Leeseberg
  13




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##### Table of Contents



CONVERTED ORGANICS INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS  CONTINUED  (UNAUDITED)
 NOTE 11  SUBSEQUENT EVENTS
     14




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Introduction
  Converted Organics of California, LLC  Gonzales Facility
   Converted Organics of Woodbridge, LLC  Woodbridge Facility
  15




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##### Table of Contents



Converted Organics of Mississippi, LLC
  TerraSphere Inc.
  Industrial Wastewater Resources Division
  Recent Financing Activities
  16




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##### Table of Contents



Future Development
      Trends and Uncertainties Affecting our Operations
  17




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##### Table of Contents



Liquidity and Capital Resources
   $
    1,435,000
    
    
    to fund future revenue generating activities, including the
purchase of chicken litter-based fertilizer product
($615,000), a deposit for a license to treat Industrial
Wastewater ($500,000) and to fund capital equipment
purchases ($320,000).$
    1,400,000
    
    
    to repay debt principal and interest on term notes.$
    1,400,000
    
    
    to reduce accounts payable and accruals.$
    4,465,000
    
    
    to fund ongoing operations during the first six months of
2010, including $600,000 of marketing costs to implement a
formal marketing program.
     18




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##### Table of Contents



Results of Operations
 Sales
   For the three months ended June 30
    
    
    For the six months ended June 30Location
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeGonzales, CA
    
    $
    1,127,000
    
    
    $
    809,000
    
    
    $
    318,000
    
    
    $
    1,722,000
    
    
    $
    1,079,000
    
    
    $
    615,000Woodbridge, NJ
    
    
    580,000
    
    
    
    155,000
    
    
    
    425,000
    
    
    
    728,000
    
    
    
    377,000
    
    
    
    351,000Mississippi
    
    
    118,000
    
    
    
    n/a
    
    
    
    118,000
    
    
    
    235,000
    
    
    
    n/a
    
    
    
    235,000
    Cost of Sales
   For the three months ended June 30
    
    
    For the six months ended June 30Location
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeGonzales, CA
    
    $
    801,000
    
    
    $
    741,000
    
    
    $
    60,000
    
    
    $
    1,299,000
    
    
    $
    1,156,000
    
    
    $
    143,000Woodbridge, NJ
    
    
    2,367,000
    
    
    
    1,336,000
    
    
    
    1,031,000
    
    
    
    3,768,000
    
    
    
    2,592,000
    
    
    
    1,176,000Mississippi
    
    
    71,000
    
    
    
    n/a
    
    
    
    71,000
    
    
    
    138,000
    
    
    
    n/a
    
    
    
    138,000
   19




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##### Table of Contents



General and Administrative Expenses
  Interest Expense
  Derivative gain (loss)
  Critical Accounting Policies
 Use of Estimates
  Accounts Receivables
  Inventories
  Intangible Assets
  Derivative Instruments
  Revenue Recognition
 20




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##### Table of Contents



Share Based Compensation
  Off-Balance Sheet Transactions
  
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4. Controls and Procedures
   
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  21




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##### Table of Contents



Leeseberg
   
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults upon Senior Securities
  
 Item 4. [Removed and Reserved]
 
 Item 5. Other Information.
  
 Item 6. Exhibits
 Exhibit No.
    
    Description of Exhibit3.1
    
    Certificate of Amendment of the Certificate of Incorporation (incorporated by reference from
Exhibit 3.1 of the Companys Form 8-K dated June 30, 2010)4.1
    
    Form of Warrant issued pursuant to Securities Purchase Agreement dated April 20, 2010
(incorporated by reference from Exhibit 4.1 of the Companys Form 8-K dated April 21, 2010)10.1
    
    Form of Securities Purchase Agreement dated April 20, 2010 (incorporated by reference from Exhibit 10.1 of the the Companys Form 8-K dated April 21, 2010)
 22




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##### Table of Contents



Exhibit No.
    
    Description of Exhibit10.2
    
    Form of Registration Rights Agreement dated April 20, 2010 (incorporated by reference from
Exhibit 10.2 of the Companys Form 8-K dated April 21, 2010)31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Chief Executive Officer pursuant to Section 90632.2
    
    Certification of Chief Financial Officer pursuant to Section 906
 23




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##### Table of Contents



SIGNATURES
  Converted Organics Inc.Date: August 13, 2010
    /s/ Edward J. GildeaEdward J. GildeaPresident and Chief Executive OfficerDate: August 13, 2010
    /s/ David R. AllenDavid R. AllenChief Financial Officer and Executive Vice President of
Administration and Principal Accounting Officer 14