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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000903423-09-000298.txt : 20090331
<SEC-HEADER>0000903423-09-000298.hdr.sgml : 20090331
<ACCEPTANCE-DATETIME>20090331112955
ACCESSION NUMBER:		0000903423-09-000298
CONFORMED SUBMISSION TYPE:	20-F
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20081231
FILED AS OF DATE:		20090331
DATE AS OF CHANGE:		20090331

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			EDAP TMS SA
		CENTRAL INDEX KEY:			0001041934
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		20-F
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-29374
		FILM NUMBER:		09716779

	BUSINESS ADDRESS:	
		STREET 1:		PARC D'ACTIVITES LA POUDRETTE LAMARTINE
		STREET 2:		4 RUE DU DAUPHINE
		CITY:			69120 VAULX EN VELIN
		STATE:			I0

	MAIL ADDRESS:	
		STREET 1:		PARC D'ACTIVITES LA POUDRETTE LAMARTINE
		STREET 2:		4 RUE DU DAUPHINE
		CITY:			69120 VAULX EN VELIN
		STATE:			I0
		ZIP:			69120
</SEC-HEADER>
<DOCUMENT>
<TYPE>20-F
<SEQUENCE>1
<FILENAME>edap-20f_0331.htm
<TEXT>
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        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 8.33%; TEXT-ALIGN: center"><b><font size="2">As filed with the Securities and Exchange Commission on March 31, 2009</font></b></p>

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                &nbsp;
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        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><b><font size="4">SECURITIES AND EXCHANGE COMMISSION</font></b></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><b><font size="2">Washington, D.C. 20549</font></b></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><b><font size="4">FORM 20-F</font></b></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center">&nbsp;</p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><font size="2">ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF</font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><font size="2">THE SECURITIES EXCHANGE ACT OF 1934</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><font size="2">For the Fiscal Year Ended December 31, 2008</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><b><font size="2">0-29374</font></b></p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><font size="1">(Commission file number)</font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><b><font size="5">EDAP TMS S.A.</font></b></p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><font size="1">(Exact name of registrant as specified in its charter)</font></p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><b><font size="3">France</font></b></p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><font size="1">(Jurisdiction of incorporation or organization)</font></p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><b><font size="1">Parc d&rsquo;Activites la Poudrette-Lamartine</font></b></p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><b><font size="1">4/6, rue du Dauphine</font></b></p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><b><font size="1">69120 Vaulx-en-Velin, France</font></b></p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><font size="1">(Address of principal executive offices)</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><font size="1">Securities registered or to be registered pursuant to Section 12(b) of the Act:</font></p>

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                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" nowrap width="50%">
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center; margin-center: 0pt" align="center"><font size="1">&nbsp;<u><font size="1">Title of each class</font></u></font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" nowrap width="50%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center" align="center"><font size="1">Name of each exchange<br>
                        <u><font size="1">on which registered</font></u></font></p>
                    </td>
                </tr>

                <tr valign="top">
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" nowrap>
                        <div align="center">
                            <b><font size="1">American Depositary Shares, each representing<br>
                            One Ordinary Share<br>
                            Ordinary Shares, nominal value &euro;0.13 per share</font></b>
                        </div>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" nowrap>
                        <div align="center">
                            <b><font size="1">NASDAQ Global Market<br>
                            <br>
                            NASDAQ Global Market</font></b>
                        </div>
                    </td>
                </tr>
            </table>
        </div>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><font size="1">Securities registered or to be registered pursuant to Section 12(g) of the Act:</font></p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><b><font size="1">None</font></b></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><b><font size="1">Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:</font></b> <b><font size="1">None</font></b></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><font size="1">Outstanding shares of each of the issuer&rsquo;s classes of capital or common stock as of December 31, 2008: <b>9,582,593</b></font><b><font size="1">&nbsp;Ordinary Shares</font></b></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><font size="1">Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.</font></p>

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            <table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" border="0">
                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 3pt" valign="top" nowrap width="57%">
                        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 3pt" valign="top" nowrap width="15%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="1">Yes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;__________</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 3pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="1">No&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></p>
                    </td>
                </tr>
            </table>
        </div>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 2pt; TEXT-ALIGN: justify"><font size="1">If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.</font></p>

        <div align="left">
            <table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" border="0">
                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 3pt" valign="top" nowrap width="57%">
                        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 3pt" valign="top" nowrap width="15%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="1">Yes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;__________</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 3pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="1">No&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></p>
                    </td>
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        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 2pt; TEXT-ALIGN: justify"><font size="1">Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.</font></p>

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                        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
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                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 3pt" valign="top" nowrap width="15%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="1">Yes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 3pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="1">No&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></p>
                    </td>
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        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 2pt; TEXT-ALIGN: justify"><font size="1">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of &ldquo;accelerated filer and large accelerated filer&rdquo; in Rule 12b-2 of the Exchange Act. (Check one):</font></p>

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                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 4pt; PADDING-TOP: 3pt" valign="top" nowrap width="0%">
                        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 4pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 4pt; PADDING-TOP: 3pt" valign="top" nowrap width="33%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="1">Large accelerated filer&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;______________</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 4pt; PADDING-TOP: 3pt" valign="top" nowrap width="33%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="1">Accelerated filer&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;______________</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 4pt; PADDING-TOP: 3pt" valign="top" nowrap width="33%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="1">Non-accelerated filed&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>________x_______</u></font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 4pt; PADDING-TOP: 3pt" valign="top" nowrap width="4%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
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        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 10pt; TEXT-ALIGN: left"><font size="1">Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:</font></p>

        <div align="left">
            <font size="1">U.S. GAAP <u>&nbsp;X&nbsp;</u> &nbsp;&nbsp;International Financial Reporting Standards as issued by the International Accounting Standards Board __ Other</font><br>
        </div>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 10pt; TEXT-ALIGN: left"><font size="1">If "Other" has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow. Item 17</font>_____<font size="1">&nbsp;</font> <font size="1">Item 18</font>_____<font size="1"></font><font size="1">&nbsp;</font></p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 2pt; TEXT-ALIGN: justify"><font size="1">If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).</font></p>

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                        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
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                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 3pt" valign="top" nowrap width="15%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="1">Yes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;__________</font></p>
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                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 3pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="1">No&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></p>
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        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><b><font size="2">TABLE OF CONTENTS</font></b></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 83.28%; TEXT-INDENT: 8.33%; TEXT-ALIGN: left"><b><font size="2">Page</font></b></p>

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                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
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                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">Presentation of Financial and Other Information</font></p>
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                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">4</font></p>
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                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">Forward-looking Information</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">4</font></p>
                    </td>
                </tr>
            </table>
        </div>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><b><font size="2">PART I</font></b></p>

        <div align="left">
            <table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="95%" border="0">
                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap width="8%">
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap width="86%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 1.</font></b> <font size="2">Identity of Directors, Senior Management and Advisors</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap width="4%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">5</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 2.</font></b> <font size="2">Offer Statistics and Expected Timetable</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">5</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 3.</font></b> <font size="2">Key Information</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">5</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 4.</font></b> <font size="2">Information on the Company</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">19</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 4A.</font></b> <font size="2">Unresolved Staff Comments</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">32</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 5.</font></b> <font size="2">Operating and Financial Review and Prospects</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">32</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 6.</font></b> <font size="2">Directors, Senior Management and Employees</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">44</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 7.</font></b> <font size="2">Major Shareholders and Related Party Transactions</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">49</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 8.</font></b> <font size="2">Financial Information</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">50</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 9.</font></b> <font size="2">The Offer and Listing</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">51</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 10.</font></b> <font size="2">Additional Information</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">52</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 11.</font></b> <font size="2">Quantitative and Qualitative Disclosures about Market Risk</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">65</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 12.</font></b> <font size="2">Description of Securities Other than Equity Securities</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">65</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>&nbsp;</td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>&nbsp;</td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>&nbsp;</td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap><b><font size="2">PART II</font></b></td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>&nbsp;</td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>&nbsp;</td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 13.</font></b> <font size="2">Defaults, Dividend Arrearages and Delinquencies</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">66</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 14.</font></b> <font size="2">Material Modifications to the Rights of Security Holders and Use of Proceeds</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">66</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 15.</font></b> <font size="2">Controls and Procedures</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">66</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 16A.</font></b> <font size="2">Audit Committee Financial Expert.</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">67</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 16B.</font></b> <font size="2">Code of Ethics</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">67</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 16C.</font></b> <font size="2">Principal Accounting Fees and Services</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">67</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 16D.</font></b> <font size="2">Exemptions from the Listing Standards for Audit Committees</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">68</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 16E.</font></b> <font size="2">Purchases of Equity Securities by the Issuer and Affiliated Purchasers</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">68</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 16F.</font></b> <font size="2">Change in Registrant&rsquo;s Certifying Accountant</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">68</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 16G.</font></b> <font size="2">Corporate Governance</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">68</font></p>
                    </td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>&nbsp;</td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>&nbsp;</td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>&nbsp;</td>
                </tr>

                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap><b><font size="2">PART III</font></b></td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>&nbsp;</td>

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                </tr>

                <tr>
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                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 17.</font></b> <font size="2">Financial Statements</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">69</font></p>
                    </td>
                </tr>

                <tr>
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                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 18.</font></b> <font size="2">Financial Statements</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">69</font></p>
                    </td>
                </tr>

                <tr>
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                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><b><font size="2">Item 19.</font></b> <font size="2">Exhibits</font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" nowrap>
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">69</font></p>
                    </td>
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                            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><a name="PAGENUM"><font size="2">2</font></a></p>
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        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><b><font size="2">PRESENTATION OF FINANCIAL AND OTHER INFORMATION</font></b></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">Unless the context otherwise requires, references herein to &ldquo;we,&rdquo; &ldquo;us&rdquo; or &ldquo;our&rdquo; are to EDAP TMS S.A. and its consolidated subsidiaries and references herein to the &ldquo;Company,&rdquo; &ldquo;EDAP&rdquo; or &ldquo;EDAP TMS&rdquo; are to EDAP TMS S.A.</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">We prepare our consolidated financial statements in conformity with United States generally accepted accounting principles (&lsquo;&lsquo;U.S. GAAP&rsquo;&rsquo;). In this Annual Report, references to &lsquo;&lsquo;euro&rsquo;&rsquo; or &lsquo;&lsquo;&euro;&rsquo;&rsquo; are to the legal currency of the countries of the European Monetary Union, including the Republic of France, and
        references to &lsquo;&lsquo;dollars,&rsquo;&rsquo; &lsquo;&lsquo;U.S. dollars&rsquo;&rsquo; or &lsquo;&lsquo;$&rsquo;&rsquo; are to the legal currency of the United States of America. Solely for the convenience of the reader, this Annual Report contains translations of certain euro amounts into dollars at specified rates. These translations should not be construed as representations that the euro amounts actually represent such dollar amounts or could be converted into dollars at those
        rates. Unless otherwise stated, the translations of euro into dollars have been made at the rate of U.S.$1.00 = &euro;0.7184, the rate derived from the noon buying rate in The City of New York for cable transfers in euro as certified for customs purposes by the Federal Reserve Bank of New York (the &lsquo;&lsquo;Noon Buying Rate&rsquo;&rsquo;) on December 31, 2008. See Item 3, &lsquo;&lsquo;Key Information&mdash;Exchange Rates&rsquo;&rsquo; for information regarding certain currency
        exchange rates and Item 11, &lsquo;&lsquo;Quantitative and Qualitative Disclosures about Market Risk&rsquo;&rsquo; for a discussion of the effects of fluctuations in currency exchange rates on the Company.</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">The following are registered trademarks of the Company in the United States: EDAP TMS, EDAP, Technomed, Ablatherm, Ablasonic, Ablapak, Praktis, Pulsolith, Sonolith. This Annual Report also makes references to trade names and trademarks of companies other than the Company.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><b><font size="2">FORWARD-LOOKING INFORMATION</font></b></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">This report includes certain forward-looking statements, usually containing words such as &lsquo;&lsquo;believe,&rsquo;&rsquo; &lsquo;&lsquo;plan,&rsquo;&rsquo; &lsquo;&lsquo;intend,&rsquo;&rsquo; &lsquo;&lsquo;estimate,&rsquo;&rsquo; &lsquo;&lsquo;expect&rsquo;&rsquo; and &lsquo;&lsquo;anticipate&rsquo;&rsquo; or similar expressions, which reflect our views about future events and
        financial performance. Actual events or results may differ materially from those projected in such forward-looking statements as a result of various factors that may be beyond our control. These factors include, without limitation:</font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify">&nbsp;</p>

        <div align="left">
            <table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
                <tr>
                    <td valign="top" nowrap width="8%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td valign="top" nowrap width="36">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&ndash;</p>
                    </td>

                    <td valign="top" nowrap width="988">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">the effects of intense competition in the markets in which we operate;</font></p>
                    </td>
                </tr>

                <tr>
                    <td valign="top" nowrap>&nbsp;</td>

                    <td valign="top" nowrap width="36">&ndash;</td>

                    <td valign="top" nowrap width="988"><font size="2">the uncertainty of market acceptance for our HIFU devices;</font></td>
                </tr>

                <tr>
                    <td valign="top" nowrap>&nbsp;</td>

                    <td valign="top" nowrap width="36">&ndash;</td>

                    <td valign="top" nowrap width="988"><font size="2">the uncertainty of reimbursement status of procedures performed with our products</font><b><font size="2">;</font></b> </td>
                </tr>

                <tr>
                    <td valign="top" nowrap>&nbsp;</td>

                    <td valign="top" nowrap width="36">&ndash;</td>

                    <td valign="top" nowrap width="988"><font size="2">the clinical status of our HIFU devices;</font></td>
                </tr>

                <tr>
                    <td valign="top" nowrap>&nbsp;</td>

                    <td valign="top" nowrap width="36">&ndash;</td>

                    <td valign="top" nowrap width="988"><font size="2">the impact of government regulation, particularly relating to public healthcare systems and the commercial distribution of medical devices;</font> </td>
                </tr>

                <tr>
                    <td valign="top" nowrap>&nbsp;</td>

                    <td valign="top" nowrap width="36">&ndash;</td>

                    <td valign="top" nowrap width="988"><font size="2">dependence on our strategic suppliers;</font></td>
                </tr>

                <tr>
                    <td valign="top" nowrap>&nbsp;</td>

                    <td valign="top" nowrap width="36">&ndash;</td>

                    <td valign="top" nowrap width="988"><font size="2">any event or other occurrence that would interrupt operations at our primary production facility,</font></td>
                </tr>

                <tr>
                    <td valign="top" nowrap>&nbsp;</td>

                    <td valign="top" nowrap width="36">&ndash;</td>

                    <td valign="top" nowrap width="988"><font size="2">reliance on patents, licenses and key proprietary technologies;</font></td>
                </tr>

                <tr>
                    <td valign="top" nowrap>&nbsp;</td>

                    <td valign="top" nowrap width="36">&ndash;</td>

                    <td valign="top" nowrap width="988"><font size="2">product liability risk;</font></td>
                </tr>

                <tr>
                    <td valign="top" nowrap>&nbsp;</td>

                    <td valign="top" nowrap width="36">&ndash;</td>

                    <td valign="top" nowrap width="988"><font size="2">risk of exchange rate fluctuations, particularly between the euro and the U.S. dollar and between the euro and the Japanese yen;</font></td>
                </tr>

                <tr>
                    <td valign="top" nowrap>&nbsp;</td>

                    <td valign="top" nowrap width="36">&ndash;</td>

                    <td valign="top" nowrap width="988"><font size="2">fluctuations in results of operations due to the cyclical nature of demand for medical devices;</font></td>
                </tr>

                <tr>
                    <td valign="top" nowrap>&nbsp;</td>

                    <td valign="top" nowrap width="36">&ndash;</td>

                    <td valign="top" nowrap width="988"><font size="2">risks associated to the current uncertain worldwide economic and financial environment;</font></td>
                </tr>

                <tr>
                    <td valign="top" nowrap>&nbsp;</td>

                    <td valign="top" nowrap width="36">&ndash;</td>

                    <td valign="top" nowrap width="988"><font size="2">risks associated with the October 2007 private placement;</font></td>
                </tr>

                <tr>
                    <td valign="top" nowrap>&nbsp;</td>

                    <td valign="top" nowrap width="36">&ndash;</td>

                    <td valign="top" nowrap width="988"><font size="2">risks relating to ownership of our securities; and</font></td>
                </tr>

                <tr>
                    <td valign="top" nowrap>&nbsp;</td>

                    <td valign="top" nowrap width="36">&ndash;</td>

                    <td valign="top" nowrap width="988"><font size="2">changes in the fair value of the debentures and warrants issued in the October 2007 private placement.</font></td>
                </tr>
            </table>
        </div>

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            <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">You should also consider the information contained in Item 3, &lsquo;&lsquo;Key Information&mdash;Risk Factors&rsquo;&rsquo; and Item 5, &lsquo;&lsquo;Operating and Financial Review and Prospects,&rsquo;&rsquo; as well as the information contained in our periodic filings with the Securities and Exchange Commission (including our reports on Form 6-K) for further discussion of the
            risks and uncertainties that may cause such differences to occur.</font></p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

            <div align="left">
                <table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
                    <tr style="HEIGHT: 27.2pt">
                        <td style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; BACKGROUND: white; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; HEIGHT: 27.2pt" valign="bottom" width="33%">
                            <p style="MARGIN-TOP: 1.5pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                        </td>

                        <td style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; HEIGHT: 27.2pt" valign="top" width="33%">
                            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><a name="PAGENUM"><font size="2">4</font></a></p>
                        </td>

                        <td style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; BACKGROUND: white; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; HEIGHT: 27.2pt" valign="top" width="33%">
                            <p style="MARGIN-TOP: 1.5pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 140.25pt; TEXT-ALIGN: right">&nbsp;</p>
                        </td>
                    </tr>
                </table>
            </div>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"></p>
        </div>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

        <div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always"><HR noshade align="center" width="100%" size="2">
</DIV>


        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><b><font size="2">PART I</font></b></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><b><font size="2">Item 1. Identity of Directors, Senior Management and Advisors</font></b></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: left"><font size="2">Not applicable.</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><b><font size="2">Item 2. Offer Statistics and Expected Timetable</font></b></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: left"><font size="2">Not applicable.</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><b><font size="2">Item 3. Key Information</font></b></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><b><font size="2">Selected Financial Data</font></b></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">The following table sets forth selected consolidated financial data for the periods indicated. This information is qualified by and should be read in conjunction with the Consolidated Financial Statements and the Notes thereto included in Part III of this annual report, as well as Item 5, &lsquo;&lsquo;Operating and Financial Review and Prospects.&rsquo;&rsquo; The selected balance
        sheet data as of December 31, 2006, 2007 and 2008 and the selected income statement data for the years ended December 31, 2006, 2007 and 2008 set forth below have been derived from our Consolidated Financial Statements included in this annual report. The selected balance sheet data as of December 31, 2004 and 2005 and the selected income statement data for the year ended December 31, 2004 and 2005 have been derived from our audited consolidated financial statements as of and for the
        years ended December 31, 2004 and 2005. These financial statements, together with our Consolidated Financial Statements have been prepared in accordance with U.S. GAAP. To date, we have not been required, and presently are not required under French law, to prepare consolidated financial statements under French GAAP or IFRS, nor have we done so.</font></p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 49.97%; TEXT-ALIGN: justify"><b></b></p>

        <div align="left">
            <table style="MARGIN-LEFT: 0pt; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="98%" border="0">
                <tr>
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                    </td>

                    <td colspan="5"><div align="center"><b><font size="2">Year Ended and at December 31,</font></b>
                  </div></td>

                    <td style="HEIGHT: 12pt" valign="bottom" width="11%">
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">In thousands of euro, except</font></p>

                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">per share data in euro</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: black 0pt solid; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 2.25pt double; HEIGHT: 12pt" valign="bottom" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">2004</font></b></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: black 0pt solid; BORDER-LEFT: medium none; BORDER-BOTTOM: black 2.25pt double; HEIGHT: 12pt" valign="top" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center">&nbsp;</p>

                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">2005</font></b></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: black 0pt solid; BORDER-LEFT: medium none; BORDER-BOTTOM: black 2.25pt double; HEIGHT: 12pt" valign="top" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center">&nbsp;</p>

                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">2006</font></b></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: black 0pt solid; BORDER-LEFT: medium none; BORDER-BOTTOM: black 2.25pt double; HEIGHT: 12pt" valign="top" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center">&nbsp;</p>

                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">2007</font></b></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: black 0pt solid; BORDER-LEFT: medium none; BORDER-BOTTOM: black 2.25pt double; HEIGHT: 12pt" valign="bottom" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">2008</font></b></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="bottom" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="top" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="top" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="top" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="bottom" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><b><font size="2">INCOME STATEMENT DATA</font></b></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="bottom" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="top" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="top" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="top" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="bottom" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Total revenues</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">22,163</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">20,810</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">20,265</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">22,327</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">23,053</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Total net sales</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">21,955</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">20,717</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">20,174</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">22,213</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">22,856</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Gross profit</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">8,487</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">8,497</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">8,319</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">9,179</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">9,099</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Operating expenses</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(9,317)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(9,820)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(11,413)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(13,268)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(13,802)</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Loss from operations</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(830)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(1,323)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(3,094)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(4,089)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(4,703)</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Income (loss) before income taxes</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(871)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(961)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(3,375)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(5,571)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">1,105</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Income tax (expense) benefit</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(278)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(104)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(56)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">140</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">492</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Net income (loss)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(1,149)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(1,065)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(3,431)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(5,430)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">1,597</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Basic earnings (loss) per share</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(0.15)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(0.14)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(0.39)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(0.59)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">0.17</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Diluted earnings (loss) per share</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(0.15)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(0.14)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(0.39)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">(0.59)</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">0.17</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Dividends per share<sup>(1)</sup></font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">&mdash;</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">&mdash;</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">&mdash;</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">&mdash;</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right">&nbsp;</p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Basic weighted average shares outstanding</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">7,781,731</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">7,782,731</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">8,817,007</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">9,200,757</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">9,582,593</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Diluted weighted average shares outstanding</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">7,781,731</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">7,782,731</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">8,817,007</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">9,200,757</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">9,658,295</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="bottom" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="top" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="top" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="top" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="bottom" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right">&nbsp;</p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><b><font size="2">BALANCE SHEET DATA</font></b></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="bottom" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="top" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="top" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="top" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" valign="bottom" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom" width="42%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Total current assets</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: black 0pt solid; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">22,041</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">22,777</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">26,393</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">36,124</font></p>
                    </td>

                    <td style="BORDER-RIGHT: black 0pt solid; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0pt solid; HEIGHT: 12pt" width="11%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">35,786</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Property and equipment, net</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">2,807</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">3,130</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">3,211</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">4,179</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">3,763</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Total current liabilities</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">8,272</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">9,874</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">10,926</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">12,884</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">14,457</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Total assets</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">27,901</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">28,796</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">32,473</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">45,003</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">43,863</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Long-term debt, less current portion</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">&mdash;</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">55</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">58</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">15,174</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">10,318</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12pt">
                    <td style="HEIGHT: 12pt" valign="bottom">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">Total shareholders&rsquo; equity</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">17,964</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">17,372</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">19,300</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">14,499</font></p>
                    </td>

                    <td style="HEIGHT: 12pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font size="2">16,374</font></p>
                    </td>
                </tr>
            </table>
        </div>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

        <table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr>
                <td valign="top" width="7%">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="1"><sup>(1)</sup></font></p>
                </td>

                <td valign="top">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="1">No dividends were paid with respect to fiscal years 2004 through 2007 and subject to approval of the annual shareholders&rsquo; meeting to be held in June 2009, the Company does not anticipate paying any dividend with respect to fiscal year 2008. See Item 8, &lsquo;&lsquo;Financial Information &mdash; Dividends and Dividend Policy.&rsquo;&rsquo;</font></p>
                </td>
            </tr>
        </table>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

        <div title="EE+ Page Footer">
            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"></p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

            <div align="left">
                <table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
                    <tr style="HEIGHT: 27.2pt">
                        <td style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; BACKGROUND: white; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; HEIGHT: 27.2pt" valign="bottom" width="33%">
                            <p style="MARGIN-TOP: 1.5pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                        </td>

                        <td style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; HEIGHT: 27.2pt" valign="top" width="33%">
                            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><a name="PAGENUM"><font size="2">5</font></a></p>
                        </td>

                        <td style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; BACKGROUND: white; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; HEIGHT: 27.2pt" valign="top" width="33%">
                            <p style="MARGIN-TOP: 1.5pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 140.25pt; TEXT-ALIGN: right">&nbsp;</p>
                        </td>
                    </tr>
                </table>
            </div>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"></p>
        </div>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

        <div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always"><HR noshade align="center" width="100%" size="2">
</DIV>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>
        <sup>&nbsp;</sup> <sup>&nbsp;</sup>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><b><font size="2">EXCHANGE RATES</font></b></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">Fluctuations in the exchange rate between the euro and the dollar will affect the dollar amounts received by owners of American Depositary Shares (&lsquo;&lsquo;ADSs&rsquo;&rsquo;) representing ordinary shares of the Company (&lsquo;&lsquo;Shares&rsquo;&rsquo;) on conversion by the Depositary of dividends, if any, paid on the Shares in the form of ADSs. Moreover, such fluctuations may
        affect the dollar price of our ADSs on NASDAQ.</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">The following table sets forth, for each of the years indicated, the high, low, average and year-end Noon Buying Rates expressed in euro per $1.00.</font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify">&nbsp;</p>

        <div align="left">
            <table style="MARGIN-LEFT: 0pt; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
                <tr style="HEIGHT: 25.5pt">
                    <td style="BORDER-BOTTOM: black 0.5pt solid; HEIGHT: 25.5pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><b><font size="2">Year ended December 31,</font></b></p>
                    </td>

                    <td style="HEIGHT: 25.5pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 1pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 25.5pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 1pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 25.5pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">High</font></b></p>
                    </td>

                    <td style="HEIGHT: 25.5pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">Low</font></b></p>
                    </td>

                    <td style="HEIGHT: 25.5pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">Average<sup>(1)</sup></font></b></p>
                    </td>

                    <td style="HEIGHT: 25.5pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">End of Year</font></b></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12.75pt">
                    <td style="HEIGHT: 12.75pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 1pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 116.65pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 1pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 1pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="BORDER-RIGHT: medium none; BORDER-TOP: black 0.5pt solid; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0.5pt solid; HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">&euro;</font></b></p>
                    </td>

                    <td style="BORDER-RIGHT: medium none; BORDER-TOP: black 0.5pt solid; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0.5pt solid; HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">&euro;</font></b></p>
                    </td>

                    <td style="BORDER-RIGHT: medium none; BORDER-TOP: black 0.5pt solid; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0.5pt solid; HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">&euro;</font></b></p>
                    </td>

                    <td style="BORDER-RIGHT: medium none; BORDER-TOP: black 0.5pt solid; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0.5pt solid; HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">&euro;</font></b></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12.75pt">
                    <td style="HEIGHT: 12.75pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">2004</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN: 5pt 0in 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.85</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.73</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.80</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.74</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12.75pt">
                    <td style="HEIGHT: 12.75pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">2005</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN: 5pt 0in 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.86</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.74</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.81</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.84</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12.75pt">
                    <td style="HEIGHT: 12.75pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">2006</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN: 5pt 0in 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.84</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.75</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.79</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.76</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12.75pt">
                    <td style="HEIGHT: 12.75pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">2007</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN: 5pt 0in 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.78</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.67</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.73</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.68</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12.75pt">
                    <td style="HEIGHT: 12.75pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">2008</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.80</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.62</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.68</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.72</font></p>
                    </td>
                </tr>
            </table>
        </div>
        <sup>&nbsp;</sup>

        <div align="left">
            <table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
                <tr>
                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" width="2%">
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top" width="7%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="1"><sup>(1)</sup></font></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0in; PADDING-TOP: 6pt" valign="top">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="1">The average of the Noon Buying Rates on the last business day of each month during the year indicated. See &lsquo;&lsquo;Presentation of Financial and Other Information&rsquo;&rsquo; elsewhere in this annual report.</font></p>
                    </td>
                </tr>
            </table>
        </div>
        <sup>&nbsp;</sup>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><font size="2">The following table sets forth, for each of the previous six months, the high and low Noon Buying</font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><font size="2">Rates expressed in euro per $1.00.</font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify">&nbsp;</p>

        <div align="left">
            <table style="MARGIN-LEFT: 0pt; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
                <tr style="HEIGHT: 12.75pt">
                    <td style="HEIGHT: 12.75pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 1pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 1pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 1pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td width="10%" valign="bottom" style="BORDER-BOTTOM: black 0.5pt solid; HEIGHT: 12.75pt">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">End of Month</font></b></p>                  </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">High</font></b></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">Low</font></b></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="top" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center">&nbsp;</p>

                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">Average</font></b></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12.75pt">
                    <td style="HEIGHT: 12.75pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 1pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 1pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 1pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="BORDER-BOTTOM: black 0.5pt solid; HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">&euro;</font></b></p>
                    </td>

                    <td style="BORDER-RIGHT: medium none; BORDER-TOP: black 0.5pt solid; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0.5pt solid; HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">&euro;</font></b></p>
                    </td>

                    <td style="BORDER-RIGHT: medium none; BORDER-TOP: black 0.5pt solid; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0.5pt solid; HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">&euro;</font></b></p>
                    </td>

                    <td style="BORDER-RIGHT: medium none; BORDER-TOP: black 0.5pt solid; BORDER-LEFT: medium none; BORDER-BOTTOM: black 0.5pt solid; HEIGHT: 12.75pt" valign="top" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><b><font size="2">&euro;</font></b></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12.75pt">
                    <td style="HEIGHT: 12.75pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><i><font size="2">2008</font></i></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="top" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center">&nbsp;</p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12.75pt">
                    <td style="HEIGHT: 12.75pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">September</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.71</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.72</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.68</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.70</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12.75pt">
                    <td style="HEIGHT: 12.75pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">October</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.79</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.80</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.71</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.75</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12.75pt">
                    <td style="HEIGHT: 12.75pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">November</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.79</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.80</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.77</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.78</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12.75pt">
                    <td style="HEIGHT: 12.75pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">December</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.72</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.79</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.70</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.74</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 19.65pt">
                    <td style="HEIGHT: 19.65pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><i><font size="2">2009</font></i></p>
                    </td>

                    <td style="HEIGHT: 19.65pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 19.65pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 19.65pt" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 19.65pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 19.65pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 19.65pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center">&nbsp;</p>
                    </td>
                </tr>

                <tr style="HEIGHT: 16.75pt">
                    <td style="HEIGHT: 16.75pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">January</font></p>
                    </td>

                    <td style="HEIGHT: 16.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 16.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 16.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.78</font></p>
                    </td>

                    <td style="HEIGHT: 16.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.78</font></p>
                    </td>

                    <td style="HEIGHT: 16.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.72</font></p>
                    </td>

                    <td style="HEIGHT: 16.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.76</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12.75pt">
                    <td style="HEIGHT: 12.75pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">February</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.79</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.79</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.77</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.78</font></p>
                    </td>
                </tr>

                <tr style="HEIGHT: 12.75pt">
                    <td style="HEIGHT: 12.75pt" valign="bottom" width="37%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">March, through March 20, 2009</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
                    </td>

                    <td style="HEIGHT: 12.75pt" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.74</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.80</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.73</font></p>
                    </td>

                    <td style="HEIGHT: 12.75pt" valign="bottom" width="10%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font size="2">0.78</font></p>
                    </td>
                </tr>
            </table>
        </div>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify">&nbsp;</p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><font size="2">On March 20, 2009, the Noon Buying Rate was U.S.$1.00 = &euro;0.74</font><font size="1">.</font></p>

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        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><b><font size="2">RISK FACTORS</font></b></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">In addition to the other information contained in this annual report, the following risk factors should be carefully considered in evaluating us and our business. These statements are intended to highlight the material risk factors that may affect our business results.</font></p>

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        <p style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><b><font size="2">Risks Relating to Our Business</font></b></p>

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        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">Our future revenue growth and income depends, among other things, on the success of our HIFU technology.</font></b></i></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">We depend on the success of our High Intensity Focused Ultrasound (&ldquo;HIFU&rdquo;) technology for future revenue growth and net income. Our Extracorporeal Shockwave Lithotripsy (&ldquo;ESWL&rdquo;) line of products competes in a mature market that has experienced declining unit sales prices in recent years, although total revenues have remained stable owing to increased sales
        volumes. In particular, we are dependent on the successful development and commercialization of other product lines, such as medical devices based on HIFU, particularly the Ablatherm, to generate significant additional revenues and achieve and sustain profitability in the future. The Ablatherm is in its commercialization phase in the European Union, Canada and other countries. However, the Ablatherm is not approved for commercial distribution in the United States. In December 2001, our
        request for an additional Investigational Device Exemption (&ldquo;IDE&rdquo;) from the U.S. Food and Drug Administration (&ldquo;FDA&rdquo;) to conduct clinical trials in the United States for the Ablatherm as a primary therapy was rejected. After redesigning the clinical protocol, we resumed and plan to complete the clinical trials necessary to obtain FDA approval of the Ablatherm using the $17.4 million net proceeds of the October 2007 private placement. While we expect these funds
        to be sufficient to enable us to fund the clinical trials in their entirety, we cannot guarantee that the proceeds will in fact be enough to do so. Also, we cannot guarantee the successful completion of clinical trials nor can we guarantee that the FDA will grant approval to market a device even if clinical trials are successfully completed. See &ldquo;&mdash;Our clinical trials for products using HIFU technology may not be successful&rdquo; and Item 4, &ldquo;Information on the
        Company&mdash;High Intensity Focused Ultrasound (&ldquo;HIFU&rdquo;) Division&mdash;HIFU Division Clinical and Regulatory Status.&rdquo;</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">Our clinical trials for products using HIFU technology may not be successful.</font></b></i></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">Before obtaining regulatory approvals for the commercial sale of any of our devices under development, we must demonstrate through preclinical testing and clinical trials that the device is safe and effective for use in each indication. The results from preclinical testing and early clinical trials may not predict the results that will be obtained in large scale clinical trials, and
        there can be no assurance that our clinical trials will demonstrate that our products are safe, effective, and marketable. A number of companies have suffered significant setbacks in advanced clinical trials, even after promising results in earlier trials. We, the FDA or other regulatory authorities may suspend or terminate clinical trials at any time and regulating agencies such as the FDA may even refuse to grant exemptions to pursue clinical trials. See Item 4,
        &lsquo;&lsquo;Information on the Company&mdash;High Intensity Focused Ultrasound Division&mdash;HIFU Division Clinical and Regulatory Status.&rsquo;&rsquo;</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">We rely on scientific, technical and clinical data supplied by academics who work with us to evaluate and develop our devices. We cannot assure investors that there are no errors or omissions in such data that would adversely affect the development of our products.</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">The process of applying for regulatory approval is unpredictable, often lengthy and requires the expenditure of substantial resources. Our HIFU devices that have not received regulatory approval may not prove to be effective or safe in clinical trials or may not be approved by the appropriate regulatory authorities. We do not anticipate receiving FDA approval for any HIFU device,
        including the Ablatherm, for several years, if at all. If our HIFU devices do not prove to be effective and safe in clinical trials to the satisfaction of the relevant regulatory authorities, our business, financial condition and results of operations could be materially adversely affected.</font></p>

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        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">HIFU technology may not be accepted and adopted by the medical community.</font></b></i></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">Our HIFU devices represent new therapies for the conditions that they are designed to treat. Notwithstanding any positive clinical results that our HIFU devices may have achieved or may achieve in the future in terms of safety and effectiveness, and any marketing approvals that we may have obtained or may obtain in the future, there can be no assurance that such products will gain
        acceptance in the medical community. Physician acceptance depends, among other things, on adequate reimbursement from healthcare payers, which has not been provided for our HIFU products in any country, except for full public reimbursement in Germany and Italy and partial reimbursement from private insurers in the UK, and evidence of the cost effectiveness of a therapy as compared to existing therapies. Acceptance by patients depends in part on physician recommendations, as well as
        other factors, including the degree of invasiveness and the rate and severity of complications and other side effects associated with the therapy as compared to other therapies.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">Our cash flow is highly dependent on demand for our products.</font></b></i></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">Our cash flow has historically been subject to significant fluctuations over the course of any given financial year due to cyclical demand for medical devices, and the resulting annual and quarterly fluctuations in trade and other receivables and inventories. This has in the past resulted in significant variations in working capital requirements and operating cash flows. In 2008, 2007
        and 2006, moreover, our operating cash flow was negative due to the cash requirements of operating activities, which we financed using cash and cash equivalents on hand. In addition, our 2008, 2007 and 2006 operating cash flow was negative due to the cash requirements of investing activity to expand our mobile activity and to expand the leasing of our products as part of our revenue-per-procedure model, and, in 2007, due to the sponsoring of the pre-market approval
        (&lsquo;&lsquo;PMA&rsquo;&rsquo;) trials for the FDA&rsquo;s approval of our Ablatherm-HIFU solution for the treatment of prostate cancer in the United States. Since we anticipate relying principally on cash flow from operating activities to meet our liquidity requirements, a decrease in the demand for our products, or the inability of our customers to meet their financial obligations to us, would reduce the funds available to us. Our future cash flow may also be affected by the
        expected continued expansion of the leasing of our products, or the continued expansion of our mobile activity (which is invoiced on a revenue-per-procedure basis), since each of these activities generates smaller immediate revenues than device sales, and by the implementation of our US clinical trials to seek the FDA&rsquo;s approval. In the future, our liquidity may be constrained and our cash flows may be uncertain, negative or significantly different from period to period. In 2006,
        we raised new equity funds via a $7.5 million Private Investment in Public Equity, aimed at financing our new marketing and sales campaign to promote and develop the Revenue-Per-Procedure business. Our future cash flow will be affected by the increased expenses in sales efforts as well as marketing and promotion tools, while there is no assurance that this will result in the increase in the demand for our products and services. In October 2007, we raised a $20 million convertible debt
        via a Private Investment in Public Equity, aimed at financing our pre-market approval trial process to seek the FDA&rsquo;s approval on our Ablatherm-HIFU solution for the treatment of prostate cancer in the United States (our Ablatherm device, considered as a Class III device by the FDA, must receive pre-market approval by the FDA to ensure its safety and effectiveness). Our future cash flow will be affected by the increased expenses to fund the trials, while there is no assurance that
        our cash flow will in fact be enough to do so or that clinical trials will be successful or that the FDA will grant approval to market our device even if the trials are successfully completed.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><i><b><font size="2">We have a history of operating losses and it is uncertain when and if we will reach profitability.</font></b></i></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">We have incurred operating losses in each fiscal year since 1998 and may never achieve profitability. We expect that our marketing, selling and research and development expenses will increase as we attempt to develop and commercialize HIFU devices. We may not, however, generate a sufficient level of revenue to offset these expenses and may not be able to adjust spending in a timely
        manner to respond to any unanticipated decline in revenue. In 2006, we had negative operating income in both of our operating divisions (HIFU division and &ldquo;Urology Device and Services&rdquo; (&ldquo;UDS&rdquo;) division), reflecting the clinical, marketing and sales efforts in the HIFU division to develop HIFU&rsquo;s status as a standard of care, and the</font></p>

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        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><font size="2">research and development (&ldquo;R&amp;D&rdquo;) and regulatory efforts in the UDS division to develop a new, high-range lithotripter. In 2007, we also had negative operating income in our UDS division, reflecting the R&amp;D and regulatory efforts in the UDS division to develop a new, high-range lithotripter, and in connection with our FDA/PMA trials, reflecting the regulatory and clinical efforts to
        resume and conduct our Ablatherm-HIFU PMA trials. Total costs were equal to total revenues for our HIFU division in 2007, due to the increase in revenues and margin on HIFU equipment and RPP treatment sales. In 2008, we again had negative operating income in our UDS division, reflecting sharp price competition in this business together with non-optimal manufacturing costs on our newly developed Sonolith I-sys product range. We cannot assure investors that we will realize sufficient
        revenue to become profitable in the future. See Item 5, &lsquo;&lsquo;Operating and Financial Review and Prospects.&rsquo;&rsquo;</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">Competition in the markets in which we operate is intense and is expected to increase in the future.</font></b></i></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">Competition in the markets in which we operate is intense and is expected to increase in the future. In each of our main businesses, we face competition both directly from other manufacturers of medical devices that apply the same technologies that we use, as well as indirectly from existing or emerging therapies for the treatment of urological disorders.</font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">We believe that because ESWL has long been the standard treatment for urinary tract calculus disease, competition in that market comes principally from current manufacturers of lithotripters, including Siemens, Storz and Dornier. In the markets that we target for our HIFU products, competition comes from new market entrants and alternative therapies, as well as from current
        manufacturers of medical devices. In the HIFU market our devices, in particular the Ablatherm, compete with all current treatments for localized tumors, including surgery, external beam radiotherapy, brachytherapy and cryotherapy. Other companies are working with HIFU for the minimally invasive treatment of tumors, including Focus Surgery, Inc. (&lsquo;&lsquo;Focus Surgery&rsquo;&rsquo;), which has developed a device called the Sonablate SB500 for the treatment of localized prostate
        cancer. Misonix, Inc., USHIFU and UKHIFU are also involved in the manufacturing, marketing and distribution of the Sonablate. Insightec, an Israeli company owned mainly by General Electric and Elbit Medical Imaging Ltd, has developed a device using HIFU technology to treat uterine fibroids. St. Jude Medical Inc. has developed a device using HIFU to treat atrial fibrillation. Haifu, a Chinese company developing HIFU products addressing various types of cancers, signed a development
        partnership agreement with Siemens Medical Solutions to offer a HIFU device coupled with IRM imaging system. In some cases, we also form cooperative arrangements with other companies. For example, on April 25, 2007, we signed an exclusive distribution agreement with China Medical Technologies (&ldquo;Chinamed&rdquo;), a Chinese company, to distribute their HIFU devices in the European Union and Russia once their devices are approved for use in those jurisdictions. Prior to this
        agreement, Chinamed had been developing HIFU products for various types of cancer tumors, but only marketing its HIFU products in China. In September 21, 2007, we entered into a Consulting Agreement with Chinamed, pursuant to which we will assist them in obtaining market approvals in Europe for their HIFU products. On December 31, 2008, the HIFU business of Chinamed was acquired by another Chinese company, Haifuning HIFU Technology (Beijing) Co. Ltd (&ldquo;Haifuning&rdquo;), which
        plans to pursue development of the HIFU technologies. Both the Distribution Agreement and the Consulting Agreement were assigned to Haifuning in connection with the acquisition. See Item 4, &lsquo;&lsquo;Information on the Company&mdash;High Intensity Focused Ultrasound Division&mdash; HIFU Competition&rsquo;&rsquo; and Item 4, &lsquo;&lsquo;Information on the Company&mdash;Urology Devices and Services Division.&rsquo;&rsquo;</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 10.16%; TEXT-ALIGN: justify"><font size="2">Many of our competitors have significantly greater financial, technical, research, marketing, sales, distribution and other resources than us and may have more experience in developing, manufacturing, marketing and supporting new medical devices. In addition, our future success will depend in large part on our ability to maintain a leading position in technological innovation, and we
        cannot assure investors that we will be able to develop new products or enhance our current ones to compete successfully with new or existing technologies. Rapid technological development by competitors may result in our products becoming obsolete before we recover a significant portion of the research, development and commercialization expenses incurred with respect to those products.</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">We also face competition for our maintenance and service contracts. Larger hospitals often utilize their in-house maintenance departments instead of contracting with equipment manufacturers like us to</font></p>

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        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><font size="2">maintain and repair their medical equipment. In addition, third-party medical equipment maintenance companies increasingly compete with equipment manufacturers by offering broad repair and maintenance service contracts to hospitals and clinics. This increased competition for medical devices and maintenance and service contracts could have a material adverse effect on our business, financial condition and
        results of operations.</font></p>

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        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">We operate in a highly regulated industry and our future success depends on government regulatory approval of our products, which we may not receive or which may be delayed for a significant period of time.</font></b></i></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">Government regulation significantly impacts the development and marketing of our products, particularly in the United States. We are regulated in each of our major markets with respect to preclinical and clinical testing, manufacturing, labeling, distribution, sale, marketing, advertising and promotion of our products. To market and sell products still in the clinical trial stage, we
        are required to obtain approval or clearance from the relevant regulatory agencies, including the FDA in the United States. In particular, we are currently going through the FDA approval process for our Ablatherm device. Moreover, regulatory approval to market a product, if granted, may include limitations on the indicated uses for which it may be marketed. Failure to comply with regulatory requirements can result in fines, suspension or withdrawal of regulatory approvals, product
        recalls, seizure of products, operating restrictions and criminal prosecutions. Regulatory policy may change and additional government regulations may be established that could prevent or delay regulatory approval of our products. Any delay, failure to receive regulatory approval or the loss of previously received approvals could have a material adverse effect on our business, financial condition and results of operations. For more information on the regulation of our business, see Item
        4, &lsquo;&lsquo;Information on the Company&mdash;Government Regulation.&rsquo;&rsquo;</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">It is also possible that additional statutes or regulations that affect our business will be adopted and could impose substantial additional costs or otherwise have a material adverse effect on our business, financial condition and results of operations.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">The success of our products depends on whether procedures performed by those products are eligible for reimbursement which depends on the decisions of national health authorities and third-party payers.</font></b></i></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">Our success depends, among other things, on the extent to which reimbursement can be obtained from healthcare payers in the United States and elsewhere for procedures performed with our products. In the United States, we are dependent upon favorable decisions by the Centers for Medicare &amp; Medicaid Services (&lsquo;&lsquo;CMS&rsquo;&rsquo;), formerly the Health Care Financing
        Administration (&lsquo;&lsquo;HCFA&rsquo;&rsquo;), for Medicare reimbursement, individual managed care organizations, private insurers and other payers. These decisions may be revised from time to time, which could affect reimbursement for procedures performed using our devices. Outside the United States, and in particular in the European Union and Japan, third-party reimbursement is generally conditioned upon decisions by national health authorities. In the European Union, there is no
        single procedure for obtaining reimbursement and, consequently, we must seek regulatory approval in each Member State. If we fail to establish reimbursement from healthcare payers or government and private healthcare payers&rsquo; policies change, it could have a material adverse effect on our business, financial condition and results of operations.</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">Lithotripsy procedures are reimbursed in the European Union, in Japan and in the United States. However, a decision to modify reimbursement policies for these procedures could have a material adverse effect on our business, financial conditions and results of operations. In contrast, procedures performed with our Ablatherm device are not reimbursed in the United States or in any of the
        European Union countries with the exception of Italy, Germany and the UK, where it is partially reimbursed. We cannot assure investors that additional reimbursement approvals will be obtained. If reimbursement for our products is unavailable, limited in scope or amount or if pricing is set at unsatisfactory levels, our business could be materially harmed.</font></p>

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        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">Our manufacturing operations are highly regulated and failure to comply with those regulations would harm our business.</font></b></i></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">Our manufacturing operations must comply with regulations established by regulatory agencies in the United States, the European Union and other countries, and in particular with the good manufacturing practices (&lsquo;&lsquo;GMP&rsquo;&rsquo;) mandated by the FDA and European Union standards for quality assurance and manufacturing process control. There is a risk that we may not
        comply with all applicable standards and, therefore, will be unable to manufacture our products for commercial sale. Our manufacturing facilities are subject to inspection by regulatory authorities at any time. If any inspection by the regulatory authorities reveals deficiencies in manufacturing, we could be required to take immediate remedial actions, suspend production or close the current and future production facilities, which would disrupt our manufacturing processes. Accordingly,
        failure to comply with these regulations could have a material adverse effect on our business, financial condition and results of operations.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">We depend on a single site to manufacture our products, and any interruption of operations could have a material adverse effect on our business.</font></b></i></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">Most of our manufacturing currently takes place in a single facility located in Vaulx-en-Velin, on the outskirts of Lyon, France. A significant interruption in the operations of our sole facility for any reason, such as fire, flood or other natural disaster or a failure to obtain or maintain required regulatory approvals, could have a material adverse effect on our business, financial
        condition and results of operations.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">For certain components or services we depend on single suppliers that for events beyond our control may fail to deliver sufficient supplies to us, which would interrupt our production processes.</font></b></i></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">We purchase the majority of the components used in our products from a number of suppliers, but rely on a single supplier for several components. In addition, we rely on single suppliers for certain services. If the supply of certain components or services were interrupted for any reason, our manufacturing and marketing of the affected products would be delayed. These delays could be
        extensive, especially in situations where a component substitution would require regulatory approval. We expect to continue to depend upon our suppliers for the foreseeable future. Failure to obtain adequate supplies of components or services in a timely manner could have a material adverse effect on our business, financial condition and results of operations.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">Intellectual property rights are essential to protect our medical devices, and any dispute with respect to these rights could be costly and have an uncertain outcome.</font></b></i></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">Our success depends in large part on our ability to develop proprietary products and technologies and to establish and protect the related intellectual property rights, without infringing the intellectual property rights of third parties. The validity and scope of claims covered in medical technology patents involve complex legal and factual questions and, therefore, may be highly
        uncertain. The medical device industry has been characterized by extensive litigation regarding patents and other intellectual property rights. Our products, including our HIFU devices, may be subject to litigation involving claims of patent infringement or violation of other intellectual property rights of third parties. The defense and prosecution of intellectual property suits, patent opposition proceedings and related legal and administrative proceedings are both costly and time
        consuming and may result in a significant diversion of effort and resources by our technical and management personnel. An adverse determination in any such litigation or proceeding to which we become a party could subject us to significant liability to third parties; require us to seek licenses from third parties and pay ongoing royalties; require us to redesign certain products; or subject us to injunctions preventing the manufacture, use or sale of the affected products. In addition
        to being costly, drawn-out litigation to defend or prosecute intellectual property rights could cause our customers or potential customers to defer or limit their purchase or use of our products until the litigation is resolved. See Item 4, &lsquo;&lsquo;Information on the Company&mdash;High Intensity Focused Ultrasound Division&mdash;HIFU Division Patents and Intellectual Property&rsquo;&rsquo; and Item 4, &lsquo;&lsquo;Information on the Company&mdash;Urology Devices and Services
        Division&mdash;UDS Division Patents and Intellectual Property.&rsquo;&rsquo;</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">We own patents covering several of our technologies and have additional patent applications pending in the United States, the European Union, Japan and elsewhere. The process of seeking patent</font></p>

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        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><font size="2">protection can be long and expensive and there can be no assurance that our patent applications will result in the issuance of patents. We also cannot assure investors that our current or future patents are or will be sufficient to provide meaningful protection or commercial advantage to us. Our patents or patent applications could be challenged, invalidated or circumvented in the future. The failure to
        maintain or obtain necessary patents, licenses or other intellectual property rights from third parties on acceptable terms or the invalidation or cancellation of material patents could have a material adverse effect on our business, financial condition or results of operations. Litigation may be necessary to enforce patents issued to us or to determine the enforceability, scope and validity of the proprietary rights of others. Our competitors, many of which have substantial resources
        and have made substantial investments in competing technologies, may apply for and obtain patents that will interfere with our ability to make, use or sell certain products, including our HIFU devices, either in the United States or in foreign markets.</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">We also rely on trade secrets and proprietary know-how, which we seek to protect through non-disclosure agreements with employees, consultants and other parties. It is possible, however, that those non-disclosure agreements will be breached, that we will not have adequate remedies for any such breach, or that our trade secrets will become known to, or independently developed by,
        competitors. Litigation may be necessary to protect trade secrets or know-how owned by us. In addition, effective copyright and trade secret protection may be unavailable or limited in certain countries.</font></p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition and result of operations.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><i><b><font size="2">We face a significant risk of exposure to product liability claims in the event that the use of our products results in personal injury or death.</font></b></i></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">If the use of any of our products results in personal injury or death, we may face significant product liability claims. For example, in 2000, a patient made a product liability claim against us in the United States, alleging that he was injured in the course of a Prostatron procedure, for which we remained liable</font><font size="2">following the sale of our Prostatron business in
        October 2000. In February 2008, we reached a settlement for this claim in</font><font size="2"> the amount of $15,000, which was fully covered by our Product Liability insurance. See Item 5, &lsquo;&lsquo;Operating and Financial Review and Prospects&mdash;Critical Accounting Policies&mdash;Litigation&rsquo;&rsquo; and Item 8, &lsquo;&lsquo;Financial Information&mdash;Legal Proceedings&rsquo;&rsquo; for more information about this action.</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">We maintain separate product liability insurance policies for the United States and Canada and for the other markets in which we sell our products. Product liability insurance is expensive and there can be no assurance that it will continue to be available on commercially reasonable terms or at all. In addition, our insurance may not cover certain product liability claims or our
        liability for any claims may exceed our coverage limits. Also, if any of our products prove to be defective, we may be required to recall or redesign the product. A product liability claim or series of claims brought against us with respect to uninsured liabilities or in excess of our insurance coverage, or any claim or product recall that results in significant cost to or adverse publicity against us could have a material adverse effect on our business, financial condition and results
        of operations.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">We sell our products in many parts of the world and, as a result, our business is affected by fluctuations in currency exchange rates.</font></b></i></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">We are exposed to foreign currency exchange rate risk because the mix of currencies in which our costs are denominated is different from the mix of currencies in which we earn our revenue. In 2008, approximately 66% of our total operating expenses were denominated in euro, while approximately 25% of our sales were denominated in currencies other than euro (primarily the U.S. dollar and
        the Japanese yen). Our operating profitability could be materially adversely affected by large fluctuations in the rate of exchange between the euro and other currencies. For instance, a decrease in the value of the U.S. dollar or the Japanese yen against the euro would have a negative effect on our revenues, which may not be offset by an equal reduction in operating expenses and would therefore negatively impact operating profitability. From time to time we enter into foreign exchange
        forward sale contracts to hedge against fluctuations in the exchange rates of the principal foreign currencies in which our receivables are denominated (in particular, the U.S. dollar and the Japanese yen), but there can be no assurance that such hedging activities will limit the effect of movements in exchange rates on our results of operations. As of December 31, 2008, we had</font></p>

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        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><font size="2">no outstanding hedging instruments. In addition, since any dividends that we may declare will be denominated in euro, exchange rate fluctuations will affect the U.S. dollar equivalent of any dividends received by holders of ADSs.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">Our results of operations have fluctuated significantly from quarter to quarter in the past and may continue to do so in the future.</font></b></i></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">Our results of operations have fluctuated in the past and are expected to continue to fluctuate significantly from quarter to quarter depending upon numerous factors, including, but not limited to, the timing and results of clinical trials, changes in healthcare reimbursement policies, cyclicality of demand for our products, changes in pricing policies by us or our competitors, new
        product announcements by us or our competitors, customer order deferrals in anticipation of new or enhanced products offered by us or our competitors, product quality problems and exchange rate fluctuations. Furthermore, because our main products have relatively high unit prices, the amount and timing of individual orders can have a substantial effect on our results of operations in any given quarter.</font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">Our results of operations and financial condition could be adversely affected by the adverse economic and financial developments.</font></b></i></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">The current economic and financial environment may affect the level of public and private spending in the healthcare sector generally. A cautious or negative business outlook may cause our customers to delay or cancel investment in medical equipment, which would adversely affect our revenues.</font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">In addition, we rely on the credit market to secure dedicated lease financings to fund the development of our RPP activity. Due to the limited availability of lending in the current market </font><font size="2">environment, we may be unable to access sufficient lease financing. Without lease financing, we may be unable to continue the development of our RPP activity or we may need to
        fund such activity out of our existing working capital. Similarly, some of our clients rely on lease financing to finance their purchases of equipment. Limited availability of lease financing facilities may </font><font size="2">also affect their purchasing decisions and may adversely impact our equipment sales.</font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">In accordance with the terms of our debentures, we have the option to pay interest on the debentures in shares. The current economic and financial environment may adversely affect our share price, thus we may be unable to make payment in shares without significantly diluting the interest of the existing shareholders. If we are unable to issue shares on reasonable terms, we may need to
        make interest payment in cash, thus negatively affecting our working capital.</font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">Further, the volatility in our share price due to the current economic and financial environment has </font><font size="2">had</font><font size="2"> a direct impact on the valuation of the debentures and warrants issued in the October 2007 private placement, which in turn could have a material adverse impact on our financial conditions. See &ldquo;Changes in the fair value of the
        debentures and warrants issued in the October 2007 private placement at each balance sheet date could have a significant impact on our financial condition and results of operations.&rdquo;</font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">If any of the above materializes, it could have a material adverse effect on our business, financial condition and results of operations.</font></p>

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        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><b><font size="2">Risks Relating to the October 2007 Private Placement</font></b></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 5.16%; TEXT-ALIGN: justify">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">If we fail to maintain the registration of our securities, we will be subject to substantial penalties.</font></b></i></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">As per the terms of the registration rights agreement we entered into in connection with the October 2007 private placement, we secured the registration of a portion of the securities deliverable upon conversion of the debentures and in payment of interest under the debentures as well as the securities</font></p>

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        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><font size="2">deliverable upon exercise of the warrants. If we fail to maintain the effectiveness of the registration statements required under the registration rights agreement, we are subject to significant penalties, including payment of liquidated damages. Failure to meet these obligations will cause us to incur substantial penalties in the form of liquidated damages and could, given the passage of time, lead to an
        event of default under the debentures. Payment of liquidated damages or mandatory default amount will have a material adverse effect on our financial condition and results of operation and our ability to continue as a going concern.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">If we are required for any reason to repay our outstanding debentures, we would be required</font></b> <b><font size="2">to deplete our working capital or raise additional funds. Our failure to repay the debentures, if required, could result in legal action against us, which could require the sale of substantial assets</font></b><font size="2">.</font></i></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 10.16%; TEXT-ALIGN: justify"><font size="2">The debentures are due and payable on October 30, 2012, unless sooner converted into ordinary shares. Any event of default could require the early repayment of the debentures at the mandatory default amount, including all other amounts of interest, costs, expenses and liquidated damages due in respect of the defaulted debentures. We expect that the full amount of the debentures will
        be converted into ordinary shares in accordance with the terms of the debentures. If, prior to the maturity date, we are required to repay the debentures in full, we would be required to use our working capital and raise additional funds. If we were unable to repay the debentures when required, the holders could commence legal action against us to recover the amounts due. Any such action would have a material adverse effect on our financial condition and results of
        operations.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">The issuance of</font></b> <b><font size="2">shares upon conversion of the debentures, exercise of outstanding warrants and payment of interests on the debentures will cause immediate and substantial dilution to our existing shareholders.</font></b></i></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 10.16%; TEXT-ALIGN: justify"><font size="2">The issuance of ordinary shares upon conversion of the debentures and exercise of the warrants will result in substantial dilution to the interests of other shareholders since the selling shareholders may ultimately convert and sell the full amount issuable on conversion. Based on the conversion price of the debentures and the exercise price of the warrants at the closing of the
        October 2007 private placement, up to 4,913,102, including 188,965 shares issuable to our placement agent of our ordinary shares are issuable upon conversion and exercise, representing approximately 53% of our issued and outstanding share capital. In addition, interest on the debentures is payable, under certain circumstances, in ordinary shares, under a formula which is tied to the trading price of our ADRs, and under which there is no upper limit of shares that may be required to be
        issued under our election to pay interest in ordinary shares. Although no single selling shareholder may convert its debentures and/or exercise its warrants if such conversion or exercise would cause it to own more than 4.99% of our outstanding ordinary, this restriction does not prevent each selling shareholder from converting and/or exercising a portion of its holdings, selling those Securities and then converting the rest of its holdings. In this way, each selling shareholder could
        sell more than this limit while never holding more than this limit.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 10.16%; TEXT-ALIGN: justify"><font size="2">Further, on February 26, 2009, our shareholders adopted a resolution authorizing the issuance of 3,000,000 new shares, representing a 20% of our issued and outstanding share capital on a fully diluted basis. We plan to use these new shares exclusively to pay all of the interest payable under the debentures in shares on April 1, 2009
        and each subsequent interest payment date, unless we notify holders of the debentures </font><font size="2">otherwise, in accordance with the terms of the debentures.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">We may not be authorized to issue enough ordinary shares or be able to fulfill the conditions precedent to pay interest on the debentures in the form of ordinary shares, and if we fail to do so after we have notified the debenture holders of our intention do so, an event of default under the debentures could occur.</font></b></i></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 10.16%; TEXT-ALIGN: justify"><font size="2">As noted above, interest on the debentures is payable, under certain circumstances, in ordinary shares, under a formula which is tied to the trading price of our ADRs. In order to pay interest in this manner, we need to notify our debenture holders at least 21 trading days prior to the relevant interest payment date and fulfill certain conditions during that notice period, up to and
        including the date interest is</font></p>

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                            <p style="MARGIN-TOP: 1.5pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left">&nbsp;</p>
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                            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><a name="PAGENUM"><font size="2">14</font></a></p>
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        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><font size="2">paid. Any such notice is irrevocable. Interest paid in ordinary shares is paid at the &ldquo;interest conversion rate&rdquo;, which is based on the trading price of our ADRs during the notice period, after our irrevocable notice has been given. In the event our share price were to fall during the notice period, we would have to deliver a higher number of shares than we may have originally planned at the
        time we gave the irrevocable notice. In the event the number of shares we are required to deliver exceeds the number of shares we are then authorized by our shareholders to issue, we may not be able to deliver all of the interest shares then due. Additionally, if, on the day we pay interest, we do not fulfill the relevant conditions, we are not permitted to pay interest in the form of ordinary shares. In the event we are not able to deliver shares for any reason, we will be subject to
        late fees and our debenture holders may decline to receive interest paid in cash. In the event they do not accept payment in cash, we would not be able to make a complete interest payment or any interest payment at all, which will result in an event of default under the debentures. An event of default with respect to the debentures would have a material adverse effect on our financial conditions and results of operations.</font></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 10.16%; TEXT-ALIGN: justify">&nbsp;</p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">Our increased leverage as a result of the sale</font></b> <b><font size="2">of the debentures and warrants</font></b> <b><font size="2">in the October 2007 private placement may harm our financial condition and results of operations.</font></b></i></p>

        <p style="MARGIN-TOP: 6pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 10.16%; TEXT-ALIGN: justify"><font size="2">Our total consolidated long-term financial debt as of December 31, 2008 was &euro;9.6 million and represented approximately 22% of our total capitalization, including the current portion of indebtedness of approximately &euro;0.079 million as of that date. Our level of indebtedness could have important consequences on our future operations, including:</font></p>

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                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="BACKGROUND: white" valign="top" width="9%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">&bull;</font></p>
                    </td>

                    <td style="BACKGROUND: white" valign="top" width="80%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">Reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes, and limiting our ability to obtain additional financing for these purposes; and</font></p>
                    </td>
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                    <td style="BACKGROUND: white" valign="top" width="9%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 2.25pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="BACKGROUND: white" valign="top" width="9%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">&bull;</font></p>
                    </td>

                    <td style="BACKGROUND: white" valign="top" width="80%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">Limiting our flexibility in planning for, or reacting to, and increasing our vulnerability to, changes in our business, the industry in which we operate and the general economy.</font></p>
                    </td>
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            </table>
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        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

        <p style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">Provisions in the debentures could discourage an acquisition of us or an investment in us by a third party, even if the acquisition or investment would be favourable to investors.</font></b></i></p>

        <p style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">The debentures prohibit us from engaging in certain transactions, each known as a &ldquo;fundamental transaction&rdquo;, including any merger, the sale of all of our assets or a tender offer under which our shareholders are permitted to exchange their shares for cash, securities or property, unless the successor</font> <font size="2">entity agrees to comply with the requirement to
        provide our debenture holders, upon conversion, with the same property provided to our existing shareholders under the terms of the fundamental transaction. In addition, if we are party to a &ldquo;fundamental transaction&rdquo; or &ldquo;change of control&rdquo; (as defined in the debenture) or agree to dispose of in excess of 40% of our assets, the holders have the right to require us to redeem the debentures at their election shortly after they are notified of such a change. Any
        redemption under these circumstances will be at a premium equal to the higher of 130% of the then-outstanding principal amount of the debenture or the outstanding principal amount of the debenture, plus all accrued and unpaid interest, divided by the conversion price then in effect, multiplied by the VWAP (as defined in the debenture) then in effect.</font></p>

        <p style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">In addition, under the terms of the securities purchase agreement we entered into in the October 2007 private placement, for so long as the debentures are outstanding, we are required to offer the investors who purchased debentures and warrants in the October 2007 private placement the right to participate in certain types of financings we arrange in the future, up to 50% of the value
        of such financing. We must provide this opportunity unless the offering is an underwritten public offering or an &ldquo;exempt issuance&rdquo;. Securities issued to our employees under plans, subject to certain volume limits, will be an exempt issuance, as will securities issued pursuant to strategic transactions with persons who are engaged in a business synergistic with ours. However, securities issued to persons who are not engaged in a synergistic business, such as a financial
        investor, are not exempt issuances.</font></p>

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                            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><a name="PAGENUM"><font size="2">15</font></a></p>
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            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

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        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">The restrictions on the types of transactions we can engage in and the participation rights we may have to offer in future financings may operate to discourage third parties from engaging in these transactions with us, even if those transactions would be beneficial to us and our shareholders.</font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: justify"><i><b><font size="2">Changes in the fair value of the debentures and warrants issued in the October 2007 private placement at each balance sheet date could have a significant impact on our financial condition and results of operations.</font></b></i></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">We use various market parameters to evaluate the fair value of the convertible debentures and warrants issued in the October 2007 private placement at each balance sheet date which could have a significant impact on our financial condition and results of operation as a result of changes in these market parameters. The following market parameters are most likely to change at each
        balance sheet date and the following paragraphs describe how hypothetical increases or decreases in those market parameters would have affected the US Dollar fair value of the debentures and warrants as of December 31, 2008:</font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify">&nbsp;</p>

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                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td valign="top" width="4%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">-</font></p>
                    </td>

                    <td valign="top">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">stock volatility: as of December 31, 2008 and every other market parameter being equal, an increase in the stock volatility of 5 percentage points would have resulted in an increase of 2% in the fair value of the convertible debentures and warrants, and a decrease in the stock volatility of 5 percentage points would have resulted
                        in a decrease of 2% in the fair value of the convertible debentures and warrants.</font></p>
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                    <td valign="top" width="12%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td valign="top" width="4%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">-</font></p>
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                    <td valign="top">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">the stock value: as of December 31, 2008 and every other market parameter being equal, an increase in the stock value of 10% would have resulted in an increase of 2% in the fair value of the convertible debentures and warrants, and a decrease in the stock value of 10% would have resulted in a decrease of 2% in the fair value of
                        the convertible debentures and warrants.</font></p>
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                <tr>
                    <td valign="top" width="12%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td valign="top" width="4%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">-</font></p>
                    </td>

                    <td valign="top">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">the risk free interest rate: as of December 31, 2008 and every other market parameter being equal, an increase in the risk free interest rate of 1 percentage point would have resulted in a decrease of 1% in the fair value of the convertible debentures and warrants, and a decrease in the risk free interest rate of 1 percentage point would have resulted in
                        an increase of 2% in the fair value of the convertible debentures and warrants.</font></p>
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        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 12.49%; TEXT-ALIGN: justify">&nbsp;</p>

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                <tr>
                    <td valign="top" width="12%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td valign="top" width="4%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">-</font></p>
                    </td>

                    <td valign="top">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">credit spread: as of December 31, 2008 and every other market parameter being equal, an increase in the credit spread of 1 percentage point would have resulted in a decrease of 2% in the fair value of the convertible debentures and warrants, and a decrease in the credit spread of 1 percentage point would have resulted in an increase of 2% in the fair
                        value of the convertible debentures and warrants.</font></p>
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                <tr>
                    <td valign="top" width="12%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td valign="top" width="4%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">-</font></p>
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                    <td valign="top">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">liquidity discount factor: as of December 31, 2008 and every other market parameter being equal, an increase in the liquidity discount factor of 5 percentage points would have resulted in a decrease of 1% in the fair value of the convertible debentures and warrants, and a decrease in the liquidity discount factor of 5 percentage points would have
                        resulted in an increase of 1% in the fair value of the convertible debentures and warrants.</font></p>
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        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 12.49%; TEXT-ALIGN: justify">&nbsp;</p>


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                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify">&nbsp;</p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 12pt; PADDING-TOP: 0in" valign="top" width="4%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><b><font size="2">-</font></b></p>
                    </td>

                    <td style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 12pt; PADDING-TOP: 0in" valign="top">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">combined sensitivity to market parameters: as of December 31, 2008, a 5 percentage point increase in stock volatility together with a 10% increase in the stock value, a 1 percentage point decrease in the risk free interest rate, a 1 percentage point decrease in the credit spread and a 5 percentage point decrease in the liquidity discount factor would
                        have resulted in an increase of 9% in the fair value of the debentures and warrants; conversely, a 5 percentage point decrease in the stock volatility together with a 10% decrease in the stock value, a 1 percentage point increase in the risk free interest rate, a 1 percentage point increase in the credit spread and a 5 percentage point increase in the liquidity discount factor would have resulted in a decrease of 8% in the fair value of the debentures and warrants.</font></p>                  </td>
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                            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><a name="PAGENUM"><font size="2">16</font></a></p>
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        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><b><font size="2">Risks Relating to Ownership of Securities</font></b></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><i><b><font size="2">Our securities may be affected by volume fluctuations, and may fluctuate significantly in price.</font></b></i></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 10.16%; TEXT-ALIGN: justify"><font size="2">Our ADSs are currently traded on the NASDAQ Global Market. The average daily trading volume of our ADSs in December 2008 was 9,138, the high and low bid price of our ADSs for the last two financial years ended on December 31, 2008 and December 31, 2007, was $ 5.12 and $9.40, and $ 1.05 and $4.25, respectively, and the high and low bid price of our ADSs during 2008 was $5.12 and
        $1.05, respectively. Our ADSs have experienced, and are likely to experience in the future, significant price and volume fluctuations, which could adversely affect the market price of our ADSs without regard to our operating performance. The price of our securities, and our ADSs in particular, may fluctuate as a result of a variety of factors beyond our control, including changes in our business, operations and prospects, regulatory considerations, results of clinical trials of our
        products or those of our competitors, developments in patents and other proprietary rights, and general market and economic conditions.</font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><i><b><font size="2">We may issue additional securities that may be dilutive to our existing shareholders.</font></b></i></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 10.16%; TEXT-ALIGN: justify"><font size="2">The extraordinary general meeting of our shareholders held on May 22, 2007 delegated to our Board of Directors the authority to issue up to 6,000,000 additional shares, either in the form of shares or through the issuance of securities exercisable for or convertible into our shares. We used this authorization to issue the debentures and warrants in the October 2007 private placement.
        These securities were issued without preferential subscription rights. In addition, 600,000 of the shares authorized at the May 22, 2007 shareholders&rsquo; meeting were allowed to be granted to certain of our employees through the issuance of subscription options. On October 29, 2007, 504,088 options to subscribe to 504,088 new shares were granted to certain employees, out of the 600,000 authorized. In July 2009, 11,775 new ordinary shares will be granted to certain of our employees
        upon achievement on certain performance goals during 2007 and 2008 pursuant to the Shareholders&rsquo; authorization dated February 17, 2005. Finally, on February 26, 2009, the extraordinary general meeting of our shareholders delegated to our Board of Directors the authority to issue up to 3,000,000 additional shares for the purpose of paying all of the interest payable under the debentures in shares on April 1, 2009 and each subsequent interest payment date, unless we notify the
        holders of the debentures otherwise, in accordance with the terms of the debentures. The issuance of additional ordinary shares, including any additional ordinary shares issuable pursuant to the exercise of preferential subscription rights that may not be available to all of our shareholders, would reduce the proportionate ownership and voting power of then-existing shareholders.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">We are subject to different corporate disclosure standards that may limit the information available to holders of our ADSs.</font></b></i></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 10.16%; TEXT-ALIGN: justify"><font size="2">As a foreign private issuer, we are not required to comply with the notice and disclosure requirements under the Securities Exchange Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;), relating to the solicitation of proxies for shareholder meetings. Although we are subject to the periodic reporting requirements of the Exchange Act, the periodic disclosure required of non-U.S.
        issuers under the Exchange Act is more limited than the periodic disclosure required of U.S. issuers. Therefore, there may be less publicly available information about us than is regularly published by or about other public companies in the United States.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><i><b><font size="2">We currently do not intend to pay dividends, and cannot assure shareholders that we will make dividend payments in the future.</font></b></i></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 10.16%; TEXT-ALIGN: justify"><font size="2">We have not paid any dividend on our shares since 1994, and do not anticipate paying any dividends for the foreseeable future. In particular, in connection with the October 2007 private placement, we agreed not to pay cash dividends on any of our equity securities. Thereafter, declaration of dividends on our shares will depend upon, among other things, future earnings, if any, the
        operating and financial condition of our business, our capital requirements, general business conditions and such other factors as our Board of Directors deems relevant. See Item 8, &ldquo;Financial Information&mdash;Dividends and Dividend Policy.&rdquo;</font></p>

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                            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><a name="PAGENUM"><font size="2">17</font></a></p>
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        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">Judgments of U.S. courts, including those predicated on the civil liability provisions of the federal securities laws of the United States, may not be enforceable in French courts.</font></b></i></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 10.16%; TEXT-ALIGN: left"><font size="2">An investor in the United States may find it difficult to:</font></p>

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                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">&bull;</font></p>
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                    <td style="BACKGROUND: white" valign="top" width="86%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">effect service of process within the United States against us and our non-U.S. resident directors and officers;</font></p>
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                    </td>

                    <td style="BACKGROUND: white" valign="top" width="4%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">&bull;</font></p>
                    </td>

                    <td style="BACKGROUND: white" valign="top" width="86%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">enforce U.S. court judgments based upon the civil liability provisions of the U.S. federal securities laws against us and our non-U.S. resident directors and officers in France; or</font></p>
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                    <td style="BACKGROUND: white" valign="top" width="4%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><font size="2">&bull;</font></p>
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                    <td style="BACKGROUND: white" valign="top" width="86%">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><font size="2">bring an original action in a French court to enforce liabilities based upon the U.S. federal securities laws against us and our non-U.S. resident directors and officers.</font></p>
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        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">Holders of ADSs have fewer rights than shareholders and have to act through the Depositary to exercise those rights.</font></b></i></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 10.99%; TEXT-ALIGN: justify"><font size="2">Holders of ADSs do not have the same rights as shareholders and accordingly, cannot exercise rights of shareholders against us. The Bank of New York, as depositary (the &ldquo;Depositary&rdquo;), is the registered shareholder of the deposited shares underlying the ADSs, and therefore holders of ADSs will generally have to exercise the rights attached to those shares through the
        Depositary. We will use reasonable efforts to request that the Depositary notify the holders of ADSs of upcoming votes and ask for voting instructions from them. If a holder fails to return a voting instruction card to the Depositary by the date established by it for receipt of such voting instructions, or if the Depositary receives an improperly completed or blank voting instruction card, or if the voting instructions included in the voting instruction card are illegible or unclear,
        then such holder will be deemed to have instructed the Depositary to vote its shares and the Depositary shall vote such shares in favour of any resolution proposed or approved by our Board of Directors and against any resolution not so proposed or approved.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><i><b><font size="2">Preferential subscription rights may not be available for U.S. persons.</font></b></i></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 10.16%; TEXT-ALIGN: justify"><font size="2">Under French law, shareholders have preferential rights to subscribe for cash issuances of new shares or other securities giving rights to acquire additional shares on a</font> <i><font size="2">pro rata</font></i> <font size="2">basis. U.S. holders of our securities may not be able to exercise preferential subscription rights for their shares unless a registration statement under
        the Securities Act is effective with respect to such rights or an exemption from the registration requirements imposed by the Securities Act is available. We may, from time to time, issue new shares or other securities giving rights to acquire additional shares (such as warrants) at a time when no registration statement is in effect and no Securities Act exemption is available. If so, U.S. holders of our securities will be unable to exercise their preferential rights and their interests
        will be diluted. We are under no obligation to file any registration statement in connection with any issuance of new shares or other securities.</font></p>

        <p style="MARGIN-TOP: 12pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 8.33%; TEXT-ALIGN: justify"><font size="2">For holders of our shares in the form of ADSs, the Depositary may make these rights or other distributions available to holders after we instruct it to do so and provide it with evidence that it is legal to do so. If we fail to do this and the Depositary determines that it is impractical to sell the rights, it may allow these rights to lapse. In that case the holders will receive no
        value for them.</font></p>

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                            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><a name="PAGENUM"><font size="2">18</font></a></p>
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<b><font size=2>Item 4. Information on the Company</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We develop and market the Ablatherm<sup>&reg;</sup>, an advanced choice for High Intensity Focused Ultrasound (HIFU) treatment of localized prostate cancer. HIFU treatment is shown to be a minimally invasive and effective treatment option for localized prostate cancer with a low occurrence of side effects. Ablatherm-HIFU is generally recommended for patients with localized prostate cancer (stages T1-T2) who are not candidates for surgery or who prefer an alternative option. It is also used for patients who failed a radiotherapy treatment. In addition, we are developing HIFU technology for the treatment of certain other types of tumors. We also produce and commercialize medical equipment for treatment of urinary tract stones using Extra-corporeal Shockwave Lithotripsy (&#147;ESWL&#148;). </font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>History and Development of the Company</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Founded in 1979, we originally specialized in the manufacturing and distribution of lithotripters (devices which use shockwaves to disintegrate urinary calculi) and produced the first piezo-electric lithotripter (using electric shocks produced by a piezo-component) in 1985. In 1994, we purchased most of the assets of Technomed International S.A. (&#145;&#145;Technomed&#146;&#146;) out of liquidation. Technomed was established in 1985 and launched an electrohydraulic lithotripter (using electric shocks produced by an electrode within a hydraulic system) in 1986 and the Prostatron, a medical device using TransUrethral Microwave Thermotherapy (TUMT) for the minimally invasive treatment of BPH in the European Union in 1990. The assets we acquired in Technomed&#146;s liquidation included the ownership of, and full distribution rights to, the Prostatron, the Sonolith series of lithotripters
(Sonolith Praktis, Sonolith Vision and Sonolith Isys) and the Ablatherm HIFU device.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In October 2000, we sold our Prostatron business to Urologix Inc. for consideration consisting of approximately $12 million in common stock and warrants to purchase additional shares of common stock and $8 million in cash. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In July 2002, we reorganized our management structure and created two separate operating divisions, the HIFU division and the UDS division. The implementation of the new corporate structure consolidated our management structure from a two-tiered management system with a Supervisory Board and a Management Board into a single Board of Directors with the consolidated management responsibilities of the two-tiered system. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On February 25, 2004, we finalized a distribution agreement (the &#147;Distribution Agreement&#148;), with a subsidiary of HealthTronics Surgical Services, Inc. ("HealthTronics"), under which HealthTronics agreed to distribute our lithotripters in the United States. Under the Distribution Agreement, 1,000,000 warrants were allocated to HealthTronics, which were to be exercised upon the completion of certain milestones linked to the grant of the Ablatherm pre-market approval and certain minimum sales of lithotripters in the United States. On December 29, 2005, we amended the Distribution Agreement after HealthTronics decided to focus all of its efforts on implementing Ablatherm clinical trials in the United States to gain FDA approval and to cease pursuing distribution of our lithotripters in the United States. In connection with this amendment, 200,000 warrants that had been issued to
HealthTronics were cancelled since their exercise was directly linked to future purchases of our lithotripters. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On August 3, 2006, we closed a private placement of 961,676 ordinary shares in the form of American Depositary Shares, resulting in net proceeds of approximately $7.5 million. These funds were and are being used to fund additional marketing efforts to accelerate the adoption of Ablatherm-HIFU in key European markets.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On November 10, 2006, HealthTronics informed us that they intended to cease conducting clinical trials and pursuing the Ablatherm PMA approval.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>On April 3, 2007, we executed an Agreement and Release whereby HealthTronics agreed to transfer the Ablatherm FDA study to us. The Agreement and Release was amended on July 9, 2007. Under the Agreement and Release, as amended, HealthTronics exercised 200,000 warrants which had been granted under the Distribution Agreement to acquire 200,000 of our ordinary shares for an aggregate exercise price of $300,000. The 600,000 remaining warrants granted under the Distribution Agreement </font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><A NAME="PAGENUM"><font size="2">19</font></A></p> </td>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>were cancelled. Pursuant to a registration rights agreement, we also agreed to file a registration statement under the Securities Act to enable HealthTronics to resell its ordinary shares (in the form of ordinary shares or ADSs) in transactions that are registered under the Securities Act. Under the Agreement and Release, HealthTronics agreed to pay us $600,000 within five days of the earlier of (a) 60 days after the effective date of the resale registration statement (such sixty-day period being subject to extension in certain circumstances) and (b) the date that HealthTronics had sold all of our ordinary shares. Further, under the terms of the Agreement and Release, HealthTronics agreed to use its reasonably best efforts to resell its ordinary shares in accordance with a registration statement. Finally, pursuant to the Agreement and Release, HealthTronics transferred to us one Ablatherm device and six
lithotripters that HealthTronics had previously acquired and returned to us two Ablatherm devices we owned. We filed a resale registration statement on Form F-3 on July 16, 2007 reflecting the terms of the amended Agreement and Release.  We were unable, however, to resolve a comment from the SEC staff on the Form F-3 registration statement relating to the availability of Form F-3 for the resale of the ordinary shares held by HealthTronics. As a result, with HealthTronics concurring, we elected to withdraw the resale registration statement by letter dated September 18, 2007. In an e-mail communication to us, HealthTronics has confirmed to us that they intend to honor their obligations under the Agreement and Release and specifically to pay us the $600,000 amount</font><font color="#FF0000"><strike><font size=2>.</font></strike></font><font size=2>. The timing of that payment, however, is unclear. The shares held by HealthTronics may now be sold without registration under Rule 144 under
the Securities Act, provided that the requirements of the rule for resales by non-affiliates are satisfied. We are pursuing discussions with HealthTronics regarding these matters. Given the contingent nature of the $600,000 settlement, the amount has not been reflected in our financial statements for the year ended December 31, 2008. </font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><font size=2>On October 31, 2007, we completed a private placement of $20 million principal amount of 9% Senior Convertible Debentures due 2012. In addition, the purchasers of the convertible debentures and our placement agent (the &#147;Placement Agent&#148;) received warrants to purchase our ordinary shares for an average exercise price of $6.68 per share which expire in 2013. The October 2007 private placement resulted in net proceeds of approximately $17.4 million. We agreed to use the proceeds of the private placement to finance costs associated with the regulatory approval for the commercialization of Ablatherm HIFU in the United States (including related clinical trials) and for general and administrative expenses. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2007, following the termination of the Distribution Agreement signed with HealthTronics, EDAP Technomed Inc, our Delaware subsidiary, regained the sponsorship of our Ablatherm IDE study and has pursued our clinical trials in the United States. Therefore, a portion of the proceeds resulting from our October 2007 private placement were transferred to EDAP Technomed Inc. to finance our US Ablatherm-HIFU clinical trials. </font></p>
<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>Effective January 1, 2008, to clarify and simplify our French organizational structure, we merged the two operational French entities EDAP SA and Technomed Medical Systems SA into a single entity named EDAP TMS France S.A. (formerly Technomed Medical Systems SA), which is wholly owned by  EDAP TMS SA, the holding company. The merger has not changed our business segments and we will continue to report on our two business activities as the HIFU division and UDS division, as described below.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:7.33%;text-align:justify;'><font size=2>Our legal name is EDAP TMS S.A. and our commercial name is EDAP TMS. EDAP TMS S.A. was incorporated on December 3, 1979 as a </font><i><font size=2>Soci&#233;t&#233; Anonyme</font></i><font size=2> organized under the laws of the Republic of France for 60 years from the date of incorporation. Our principal executive offices are located at Parc d&#146;Activit&#233;s la Poudrette- Lamartine, 4/6, rue du Dauphin&#233;, 69120 Vaulx-en-Velin, France and our telephone number is +33 (0) 4 72 15 31 50. Mr. Lee Sanderson, CPA, 945 Concord Street, Framingham, MA 01701, USA, is our agent for service of process in the United States.</font></p>
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<b><font size=2>Business Overview &amp; Strategy</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Through our HIFU and UDS divisions we develop, produce and market minimally invasive medical devices, mainly for urological diseases. We believe that the creation of these two divisions has allowed us to expand our market share by optimizing worldwide distribution capabilities, all of which is coordinated through our subsidiaries. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>EDAP TMS S.A. is a holding company and is responsible for providing common services to its subsidiaries, including preparation and consolidation of the financial statements for the group, complying with the requirements of various regulatory agencies and maintaining the listing of its publicly held securities and, in conjunction with its Board of Directors, directing the overall strategy of our group.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our HIFU and UDS divisions operate in Europe, the Americas, Asia and the rest of the world.   Total net sales for the HIFU division (in net contributions to Group total sales) were &#128;9.1 million, &#128;9.3 million and &#128;7.6 million for 2008, 2007, and 2006, respectively (all in Europe and the rest of the world, outside Asia and the United States). Total revenues for the UDS division were &#128;13.8 million (including &#128;6.1 million in Asia and &#128;7.7 million in Europe and the rest of the world), &#128;12.9 million (including &#128;6.5 million in Asia and &#128;6.4 million in Europe and the rest of the world) and &#128;12.6 million (including &#128;5.4 million in Asia and &#128;7.2 million in Europe and the rest of the world), each for 2008, 2007, and 2006, respectively. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>See Note 28 of the Notes to the Consolidated Financial Statements for a breakdown of total sales and revenue during the past three fiscal years by operating division.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Organizational Structure</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The following table sets forth the fully consolidated subsidiaries of the Company as of the date of this Annual Report:</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Percentage Owned</font><font size=1><sup>(1)</sup></font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>EDAP TMS France S.A.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>100%</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>EDAP Technomed Inc.</font></p> </td>
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>High Intensity Focused Ultrasound (&#145;&#145;HIFU&#146;&#146;) Division</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The HIFU division is engaged in the development, manufacturing and marketing of medical devices based on HIFU technology for the minimally invasive treatment of urological and other clinical indications. The HIFU division had total revenues of &#128;9.2 million during the fiscal year ended December 31, 2008.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>HIFU Division Business Overview</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The HIFU division currently develops, manufactures and markets devices for the minimally invasive destruction of certain types of localized tumors using HIFU technology. HIFU technology uses a high-intensity convergent ultrasound beam generated by high power transducers to produce heat. HIFU technology is intended to allow the surgeon to destroy a well-defined area of diseased tissue without damaging surrounding tissue and organs, thereby eliminating the need for incisions, transfusions and general anesthesia and associated complications. The Ablatherm is a HIFU-based device developed and marketed by the HIFU division for the treatment of organ-confined prostate cancer, referred to as T1-T2 stage. Ablatherm can be used for patients who are not candidates for surgery or who have failed a </font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>radiotherapy treatment. Ablatherm is approved for commercial distribution in the European Union, Canada, South Korea and Russia, and clinical trials in the United States have started. The HIFU division had an installed base of 75 Ablatherm machines worldwide (with an additional 8 used for clinical studies and other  research and training purposes) and 213 trained clinical sites were using this technology as of December 31, 2008.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In addition to developing, manufacturing and marketing HIFU devices, the HIFU division also generates revenues from leasing equipment, as well as from the sale of disposables, spare parts and maintenance services. Our HIFU mobile treatment option provides access to the HIFU devices without requiring hospitals and clinics to make an up-front investment in the equipment. Instead, hospitals and clinics perform treatments using these devices and remunerate us on a revenue-per-procedure (&#145;&#145;RPP&#146;&#146;) basis (i.e., on the basis of the number of individual treatments provided). With this model, once the treatment is established in the medical community, a permanent installation may become more attractive, leading to the sale of the device in some of the larger locations. With the proceeds from the private placement in August 2006, we are pursuing our marketing reach and focusing
on Ablatherm penetration under this model, in major European countries. </font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>HIFU Division Business Strategy</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The HIFU division&#146;s business strategy is to capitalize on its expertise in HIFU and its position in urology to achieve long-term growth as a leader in the development, manufacturing, marketing and distribution of minimally invasive medical devices for urological and other indications, using HIFU technology, while preserving patient quality of life. The HIFU division believes that minimally invasive treatments using HIFU could provide an alternative to current invasive therapies on the basis of reduced cost and reduced morbidity for a number of different indications. The key elements of the HIFU division&#146;s strategy to achieve that objective are:</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><i><font size=2>Provide Minimally Invasive Solutions to Treat Prostate Cancer using HIFU</font></i><font size=2>. Building upon our established position in the ESWL market, our HIFU division is striving to become the leading provider of our minimally invasive treatment option for prostate cancer. We believe that there is a large market opportunity with an increase in incidence linked to the aging male population, an increase in screening and recent campaigns to increase awareness. We also believe that HIFU could represent a credible alternative to surgery, external beam radiotherapy, brachytherapy and cryotherapy for the treatment of organ-confined prostate cancer without the cost, in-patient hospitalization and adverse side effects associated with those therapies. The HIFU division intends to achieve this through a direct sales network in
key European countries and through selected distributors in other European countries and in Asia. The HIFU division has built a strong clinical credibility based on clinical articles published in peer-reviewed journals. We ensure effective patient and physician education through a focused communication program. In addition to that current operational basis, we are seeking FDA approval to enter the US market with our Ablatherm-HIFU device.</font></p> </td> </tr>
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        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><i><font size=2>Achieve Long-Term Growth by Expanding HIFU Applications Beyond Prostate Cancer</font></i><font size=2>. The HIFU division&#146;s long-term growth strategy is to apply our HIFU technology toward the minimally invasive treatment of other medical conditions beyond prostate cancer. We believe that HIFU could represent an alternative to surgery and radiotherapy for the treatment of many tumors without the cost, in-patient hospitalization and adverse side effects associated with those therapies. The HIFU division is working on various other applications where HIFU could provide an alternative to current invasive therapies. See &#145;&#145;&#151;HIFU Products.&#146;&#146; The HIFU division maintained expenses at similar levels to 2007 on R&amp;D projects in 2008 to develop HIFU applications beyond prostate cancer. The division is considering sustaining R&amp;D spending in 2009 and future years to s


trengthen its technological leadership in HIFU and expand its application beyond urology.</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Currently, the only commercial product utilizing HIFU technology is the Ablatherm, an ultrasound guided HIFU device for the treatment of organ-confined prostate cancer. The Ablatherm is cleared for distribution in the European Union, South Korea, Canada, Australia, South Africa, New Zealand, the </font><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>Philippines, Mexico, Brazil and Russia. Clinical trials are underway in the United States. The Ablatherm consists of a treatment module, a control table with a computer and a computer screen, and a diagnostic ultrasound device connected to the treatment module. After insertion of an endorectal probe, the physician visualizes the prostate and defines the area to be treated. The computer automatically calculates the optimum treatment distribution of lesions. During the treatment, the transducer automatically moves and fires at each predefined lesion until the entire area has been treated, while controlling and imaging the treatment in real time due to its integrated imaging system. Cell destruction by HIFU is accomplished by a combination of thermal and cavitation effects caused by focused application of piezoelectric-generated high-intensity ultrasound. The procedure is generally performed under spinal anesthesia.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>HIFU Division Patents and Intellectual Property </font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2008, the HIFU division&#146;s patent portfolio contained 57 patents consisting of 25 in the United States, 23 in the European Union and Japan and 9 in Israel and the rest of the world. They belong to 25 groups of patents covering key technologies related to therapeutic ultrasound principles, systems and associated software.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>During 2008, 4 patents expired, 2 in the United States and 2 in the European Union. One patent covering new transducer design for High Intensity Contact Ultrasound applications ("HICU") has been granted in the European Union. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Twelve additional patents covering certain other aspects of our HIFU technology in the European Union (3), the United States (3), Japan (5) and the rest of the world (1) are also under review. These patents relate to new transducer design for both HIFU and HICU technologies. Taking into consideration the Chinese research and industry involvement in therapeutic ultrasound applications and business, we currently intend to extend this patent portfolio to China.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our ongoing research and development objectives are to maintain our leadership position in the treatment of prostate cancer and to extend the HIFU technology to new applications and minimally invasive systems. These research projects are conducted in cooperation with the French National Institute for Health and Medical Research (&#147;INSERM&#148;) which give rise in some cases to the filing, followed by the grant of co-owned patents. We have entered into various license agreements with INSERM whereby we commit to pay a fixed amount of royalties to INSERM based on the net revenues generated from the sales of HIFU devices using co-owned patents. Under these agreements, which last for the life of each co-owned patents we have the exclusive right to the commercial use of the co-owned patents, including the right to out-license such commercial rights. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In August 2004, we licensed our HIFU technology for the specific treatment of the &#145;&#145;cervicofacial&#146;&#146; lesions, including the thyroid, to Theraclion, a French company created by our former Director of research and development. This license agreement allows for the payment of certain royalties calculated on the basis of Theraclion&#146;s future sales of devices. We determined that we could not invest in these specific applications at that time and this license agreement therefore allows Theraclion to pursue the development of HIFU for this application. We own no interest in Theraclion.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Although we believe that our HIFU patents are valid and should be enforceable against third parties and that our patent applications should, if successfully pursued, result in the issuance of additional enforceable patents, there can be no assurance that any or all of these patents or patent applications will provide effective protection for the HIFU division&#146;s proprietary rights in such technology. HIFU devices, as they are currently or may in the future be designed, may also be subject to claims of infringement of patents owned by third parties, which could result in an adverse effect on our ability to market HIFU systems.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>HIFU Division Clinical and Regulatory Status </font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The HIFU division has conducted an extensive clinical trial for the Ablatherm in the European Union. This trial, the European Multicentric Study, involved a total of 652 patients suffering from localized prostate cancer and included six sites in France, Germany and The Netherlands. The primary goals of the trial were to assess the safety and effectiveness of the Ablatherm.  </font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The diagnosis of prostate cancer has two steps. The first one is the evaluation of the Prostate Specific Antigen (PSA), which although not specific to cancer tumors, measures the increase of cells&#146; activity inside the prostate. The second is based on biopsies: a sextant biopsy is performed inside the prostate to reveal the presence of a tumor.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>An interim analysis performed on the first 559 patients included 402 patients treated with the Ablatherm device as a first-line therapy. Of these patients, 81.4% had a normal PSA and 87.2% had negative biopsies at the last follow-up and were considered cancer free. The trials also included 157 patients who underwent an Ablatherm treatment as a salvage therapy after a previous failed therapy (hormonotherapy, radiation or prostatectomy). Of these patients, 80.7% and 67.9% had negative biopsies and normal PSA after treatment, respectively.  </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Based on these results, we obtained in May 1999 a CE Marking that allows us to market the Ablatherm in the European Union.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In June 2000, the HIFU division applied for an approval by the Japanese Ministry of Health for the Ablatherm to be marketed in Japan. We retrieved the application in 2005 to update it and review the process. The process of requesting approval to market the Ablatherm in Japan might be long and may never result in the approval to market the Ablatherm in Japan. See Item 3, &#145;&#145;Key Information&#151;Risk Factors&#151;Our future revenue growth and income depend, among other things, on the success of our HIFU technology.&#146;&#146;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2001, the French Urology Association (&#145;&#145;AFU&#146;&#146;) conducted an independent clinical trial to confirm the efficacy and safety results observed in the European Multicentric Study, and to evaluate the therapy-related costs. Patient recruitment was successfully performed at eight investigational sites. Patient enrollment was completed in an 11-month period with 117 patients included. Patient follow-up is ongoing, with intermediate assessment at one year. The two-year follow-up results were presented at the AFU congress in November 2004. Follow-up with these patients will continue to evaluate the long-term efficacy of the treatment.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In March 2004, French authorities approved a new treatment protocol concerning the treatment of patients who failed radiotherapy. We obtained CE Marking, which currently allows us to market this new Ablatherm treatment option.</font><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In February 2004, we entered into the Distribution Agreement with HealthTronics. The terms of the distribution agreement granted HealthTronics the right to pursue market approval from the FDA for the Ablatherm. Under the terms of the distribution agreement, HealthTronics would be granted exclusive distribution rights for the Ablatherm in the United States. In November 2006, HealthTronics informed us that they intended to discontinue Ablatherm FDA trials.  On April 3, 2007, we executed an Agreement and Release whereby HealthTronics agreed to transfer the Ablatherm FDA study to us. See Item 4, &#147;Information on the Company &#150; History and Development of the Company.&#148;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.83%;text-align:justify;'><font size=2>On June 29, 2007, the FDA officially approved the transfer of the study to EDAP Technomed Inc. and the trials resumed as per the approved protocol. As of December 31, 2008, a total of 25 universities and hospitals were participating in the trials and 54 patients have undergone HIFU under the clinical protocol. In October 2007, we completed a private placement raising net proceeds of $17.4 million allowing us to finance and conduct the US trials for the expected period of time. See Item 5, &#147;Operating and Financial Review and Prospects &#150; Liquidity and Capital Resources.&#148;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2005, a clinical trial was started in France to validate the efficacy and safety of Ablatherm as rescue treatment in patients after brachytherapy failure. Patients are still being enrolled.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2006, a clinical trial was launched to evaluate new Ablatherm treatment options allowing the treatment of larger prostates. This clinical study has been completed in 2007 and a new software improving the device specifications was released at the end of 2007. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2007, a new clinical trial using Ablatherm-HIFU and dedicated to the treatment of high risk patients was started in France. Patient enrolment is in progress.</font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The first clinical paper reporting long term results using Ablatherm HIFU was published in November 2007. The results of the study confirm the efficacy of HIFU in patients with localized prostate cancer.  </font></p>
<p style=' margin-bottom:5pt; margin-top:5pt; text-indent:8.33%;text-align:justify;'><font size=2>We are currently setting up an extensive worldwide database called "@-registry." This on-line database is designed to compile treatment information and follow-up data for patients who have undergone HIFU for prostate cancer. The goal of the @-Registry is to further demonstrate the safety, effectiveness and durability of Ablatherm HIFU. Information</font> <font size=2>from the registry will be submitted to medical conferences for presentation and to peer-reviewed medical journals for publication. The first presentation of results will be based on abstracts that have been accepted for presentation at the 2009 Annual European Association of Urology Congress in March 2009 and the 2009 Annual American Urological Association Congress in April 2009.  </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:8.33%;text-align:left;'><i><b><font size=2>HIFU Division Market Potential</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Prostate cancer is currently the first or second most common form of cancer among men in many populations. In the United States, the American Cancer Society estimates the number of new prostate cancers diagnosed every year to be approximately 186,000, of which 70% are diagnosed with localized stage prostate cancer. Additionally, the HIFU division believes, based on figures provided by the World Health Organization, that the worldwide incidence of localized prostate cancer is approximately twice this US figure. A more effective diagnostic method for prostate cancer, the PSA test, has increased public awareness of the disease in developed countries since its introduction. The PSA test measures the blood level of a protein, the PSA, which is produced only by the prostate. PSA levels jump sharply when cancer is present. Prostate cancer is an age-related disease, and its incidence in developed
countries is expected to increase as the population ages.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>If the efficacy of HIFU therapy is established, the HIFU division believes that its application could be expanded to other medical conditions, such as certain localized thyroid, breast, gynecological, bladder, kidney, liver, brain, pancreatic and retroperitoneal tumors. However, the expansion of the use of HIFU to other areas of treatment will require a significant investment in research and development, an investment we will undertake gradually while focusing on the acceptance of HIFU as a treatment for localized prostate cancer.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>HIFU Competition</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The principal current therapies for prostate cancer carry side effects that can seriously affect a patient&#146;s quality of life. One of the current therapies is radical prostatectomy (surgery), which involves the ablation of the entire prostate gland. Radical prostatectomy requires several days of hospital stay and several weeks of recovery, usually with catheterization, and may result in partial and/or total urinary incontinence. In addition, it almost invariably renders patients impotent. A new surgical technique, nerve-sparing prostatectomy, has been developed to address that problem. However, the procedure can only be applied when the tumor is not located close to the surface of the prostate and requires a very skilled surgeon. Other therapies for localized prostate cancer include brachytherapy, a therapy that involves the implantation of radioisotopes into the prostate gland,
external beam radiotherapy and cryotherapy. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our Ablatherm-HIFU device competes with all current treatments for localized tumors, which include surgery, brachytherapy, radiotherapy, cryotherapy and hormonotherapy. We believe that HIFU competes against those treatments on the basis of efficacy, limited side effects and cost-effectiveness.</font></p>
<p style=' margin-bottom:5pt; margin-top:5pt; text-indent:8.33%;text-align:justify;'><font size=2>Other companies are working with HIFU for the minimally invasive treatment of tumors, including Focus Surgery, which has developed a device called the Sonablate SB500 for the treatment of localized prostate cancer. Misonix, USHIFU and UKHIFU are also involved in the manufacturing, marketing and distribution of the Sonablate. Insightec, an Israeli company majority owned by General Electric and Elbit Medical Imaging, has developed a device using HIFU technology to treat uterine fibroids. St. Jude Medical has developed a device using HIFU to treat atrial fibrillation. Haifu, a Chinese company developing HIFU products addressing various cancers, signed a development partnership agreement with Siemens Medical Solutions to offer a HIFU device coupled with IRM imaging system. </font></p>
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<p style=' margin-bottom:5pt; margin-top:5pt; text-indent:8.33%;text-align:justify;'><font size=2>We have also entered into cooperative arrangements with other companies.  On April 25, 2007, we signed an exclusive distribution agreement with Chinamed to distribute their HIFU devices in the European Union and Russia once their devices are approved for use in those jurisdictions.  Prior to this agreement, Chinamed had been developing HIFU products for various types of cancer tumors, but only marketing its HIFU products in China. In September 21, 2007, we entered into a Consulting Agreement with Chinamed, pursuant to which we will assist them in obtaining market approvals in Europe for their HIFU products. On December 31, 2008, the HIFU business of Chinamed was acquired by another Chinese company, Haifuning, which plans to pursue development of the HIFU technologies.  Both the Distribution Agreement and the Consulting Agreement were assigned to Haifuning in connection with the
acquisition.  See Item 4, &#145;&#145;Information on the Company&#151;High Intensity Focused Ultrasound Division&#151; HIFU Competition&#146;&#146; and Item 4, &#145;&#145;Information on the Company&#151;Urology Devices and Services Division.&#146;&#146;</font></p>
<p style=' margin-bottom:5pt; margin-top:5pt; text-indent:8.33%;text-align:justify;'><font size=2>Certain existing and potential competitors of our HIFU division may have substantially greater financial, research and development, sales and marketing and personnel resources than us and may have more experience in developing, manufacturing, marketing and supporting new products. We believe that an important factor in the potential future market for HIFU treatments will be the ability to make the substantial investments in research and development in advancing the technology beyond the treatment of prostate cancer. This future investment is wholly dependent on the successful acceptance of the device for the treatment of prostate cancer.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>HIFU Division Sales and Distribution of Products</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The HIFU division markets and sells its products through our own direct marketing and sales organization as well as through selected third-party distributors and agents in several countries. Using our direct subsidiaries or representative offices network, the HIFU division maintains direct marketing and sales forces in France, Germany, Russia and Italy, which currently represent its largest HIFU markets. Additionally, the HIFU division markets and sells its products through our distribution platform in South Korea and South East Asia.  </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The HIFU division&#146;s customers are located worldwide and have historically been principally public and private hospitals and urology clinics. The HIFU division believes that as it increases its customer base it will gain further access to the urological community, which will enable it to monitor the urological market, introduce new products and conduct trials under satisfactory conditions. No single customer of the HIFU division represents a significant portion of the division&#146;s installed base.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The HIFU division&#146;s marketing efforts include the organization of informative and training programs for urologists, mainly in key European countries where HIFU awareness is growing, comprehensive media and web programs to educate patients on the availability of HIFU technology to treat localized prostate cancer and strong participation in focused dedicated urological events. Our dedicated web site </font><u><font size=2>www.hifu-planet.com</font></u><font size=2> for patients and physicians is regularly visited. </font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Urology Devices and Services (&#145;&#145;UDS&#146;&#146;) Division</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The UDS division is engaged in the development, marketing, manufacturing and servicing of medical devices for the minimally invasive diagnosis or treatment of urological disorders, mainly urinary stones, and other clinical indications. The UDS division contributed &#128;13.8 million to consolidated net sales during the fiscal year ended December 31, 2008. </font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>UDS Division Business Overview</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The UDS division&#146;s primary business is producing and marketing devices, known as lithotripters, for the treatment of urinary tract stones by means of ESWL technology. ESWL uses extracorporeal shockwaves, which can be focused at urinary stones within the human body to fragment the stones, thereby permitting their natural elimination and preventing the need for incisions, transfusions, general anaesthesia, and the resulting complications. The UDS division currently manufactures three models of lithotripters: the Sonolith Praktis, which is available for commercial distribution in the European Union, Japan, Canada and </font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>the United States, the Sonolith Vision, which is available for commercial distribution in the European Union, Japan and Canada and the Sonolith I-Sys, which is available in the European Union, Korea, Canada and Australia. The newly designed fully integrated ESWL device: the Sonolith I-Sys is to gradually replace the Sonolith Vision when the Sonolith I-Sys is approved in the United States and Japan. The UDS division has sold 517 ESWL lithotripters worldwide to this date and actively maintained or otherwise served 374 installed lithotripters as of December 31, 2008.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In addition to its manufacturing and selling of lithotripters, the UDS division also generates revenues from the leasing of lithotripters, as well as from the sale of disposables, spare parts and maintenance services, Up to December 31, 2007, the UDS division, as an additional part of its contract manufacturing business, manufactured HIFU related devices and accessories, including disposables, on behalf of the HIFU division. As from January 1, 2008, the HIFU division integrated its own manufacturing as part of EDAP TMS France. The UDS division through our Japanese and Italian subsidiaries also derives marginal revenues from the distribution of Prostatron parts and related services under the distribution agreement entered into with Urologix in October 2000. </font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>UDS Division Business Strategy</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The UDS division&#146;s business strategy is to capitalize on its expertise in ESWL and its position in urology to achieve long-term growth as a leader in the development, production, marketing and distribution of minimally invasive medical devices for urological and other clinical indications. To achieve this strategic goal, the UDS division intends to capitalize and expand on its expertise as the manufacturer of minimally invasive devices such as its ESWL lithotripters. Until December 31, 2007, the UDS division manufactured the Ablatherm and the disposable Ablapack on behalf of the HIFU division. All the costs related to the manufacturing of these machines were supported by the UDS division, which invoiced the HIFU division at cost plus a margin and records the sales of the devices as revenues. As from January 1, 2008, all manufacturing costs are born by EDAP TMS France. The key
elements of the UDS division&#146;s strategy are:</font></p>
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        <td width="4%" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><i><font size=2>Capitalize on the Current ESWL Installed Base</font></i><font size=2>. The UDS division&#146;s long-term growth strategy relies on its ability to capitalize on its extensive installed base of ESWL lithotripters to recognize ongoing revenue from sales of disposables, accessories, services and replacement machines. We believe that a combination of continued investment in lowering end-user costs and offering units that are easily adaptable to various treatment environments, as well as a commitment to quality and service will allow the UDS division to achieve this goal. See &#145;&#145;&#151;UDS Division Products&#146;&#146;.</font></p> </td> </tr>
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        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:3.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p></td>
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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p></td>
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        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><i><font size=2>Capitalize on an Established Distribution Platform in Urology by Expanding Distribution Possibilities</font></i><font size=2>. We believe that we can achieve additional long-term growth by offering our established distribution platform in urology to other developers of medical technologies and acting as a distributor for their devices. Our distribution platform in urology consists of a series of well-established subsidiaries in Europe and Asia as well as a network of third-party distributors worldwide. </font></p></td>
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        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:3.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p></td>
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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p></td>
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        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><i><font size=2>Provide Manufacturing Solutions to Other Developers of Medical Technologies</font></i><font size=2>. Building upon its established position in the high-tech medical devices market, we believe that the UDS division can become a provider of manufacturing alternatives to other developers of medical technologies that do not have or do not wish to invest in their own manufacturing facilities. We believe that our FDA-inspected and ISO 9001 (V:2000) and ISO 13485 (V:2003) certified facilities allow to offer manufacturing services to a wide range of potential medical equipment developers.</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>UDS Division Products</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The UDS division offers the Sonolith Praktis to small and mid-size hospitals, while the Sonolith I-Sys and the Sonolith Vision are offered to large hospitals that can afford a fully dedicated and integrated lithotripter. The UDS division also sells disposable parts for lithotripters, including the piezo-electric elements of the LT02 (although the manufacturing of new machines was discontinued in 2002) and the electrodes of the Sonolith line, which need to be replaced approximately every year and approximately </font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>every ten treatments, respectively. These parts incorporate key proprietary technologies, and the UDS division has retained sole marketing rights for these parts.</font></p>
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      <td nowrap valign=top ><u><b><font size=1>Product</font></b></u></td>
      <td nowrap valign=top ><u><b><font size=1>Procedure</font></b></u></td>
      <td nowrap valign=top ><u><b><font size=1>Development Stage</font></b></u></td>
      <td nowrap valign=top ><u><b><font size=1>Clinical and Regulatory Status</font></b></u></td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Sonolith</font></p> </td>
        <td width="24%" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Electroconductive</font></p> </td>
        <td width="24%" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Commercial</font></p> </td>
        <td width="25%" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Approved for distribution:</font></p> </td> </tr>
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      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Praktis</font></p></td>
      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>treatment of</font></p></td>
      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Production</font></p></td>
      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>European Union</font></p></td>
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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font><font size=2>compact lithotripter</font></p></td>
      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>urinary stones</font></p></td>
      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p></td>
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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Japan<br>
        </font></p>
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        <div align=left> <font size=2>United States</font></div>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Canada</font><font size=2><br>
      Russia<br>
      </font><font size=2>South<br>
      Korea</font><font size=2><br>
      Australia<br>
      </font><font size=2>New Zealand</font><font size=2>        </font></p></td>
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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Sonolith Vision</font></p></td>
      <td nowrap valign=top style='padding:3.0pt 0in 0in 0in; '>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Electroconductive</font></p></td>
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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Commercial</font></p></td>
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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Approved for distribution:</font></p></td>
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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p></td>
      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>treatment of</font></p></td>
      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Production</font></p></td>
      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>European Union</font></p></td>
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      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>urinary stones</font></p></td>
      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;</p></td>
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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Japan<br>
      Canada<br>
      </font><font size=2>South Korea</font><font size=2><br>
      Australia</font><font size=2><br>
      New Zealand</font><font size=2>          </font></p></td>
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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Sonolith I-Sys</font></p></td>
      <td nowrap valign=top style='padding:3.0pt 0in 0in 0in; '>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Electroconductive</font></p></td>
      <td nowrap valign=top style='padding:3.0pt 0in 0in 0in; '>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Commercial</font></p></td>
      <td nowrap valign=top style='padding:3.0pt 0in 0in 0in; '>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Approved for distribution:</font></p></td>
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    <tr>
      <td nowrap valign=top style='padding:3.0pt 0in 0in 0in; '>&nbsp;</td>
      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>treatment of<br>
      urinary stones      </font></p></td>
      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Production</font></p></td>
      <td nowrap valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>European Union<br>
      Korea <br>
      Canada<br>
      Australia      </font></p></td>
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<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><font size=2>The Sonolith Praktis, the Sonolith Vision and the Sonolith I-Sys rely on an electroconductive technology for shockwave generation. The electroconductive technology, which is derived from the electrohydraulic technology on which the first ESWL lithotripters were based, permits improved focusing of the shockwave, reduces the variability in the shockwave pressure and allows a better transfer of energy to the calculus. These features result in a faster, more effective treatment as compared to electrohydraulic lithotripters.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The UDS division&#146;s ESWL customers are located worldwide and have historically been principally large hospitals, urology clinics and research institutions. To increase its penetration of the market segment of smaller hospitals and outpatient clinics, the UDS division developed the Sonolith Praktis, an electroconductive lithotripter designed for smaller clinics which is more compact than the Sonolith Vision or I-Sys, which are more fully dedicated and integrated electroconductive lithotripters for larger hospitals.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>UDS Division Patents and Intellectual Property </font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2008, the UDS division&#146;s patent portfolio contained 15 patents consisting of 4 in the United States, 7 in the European Union and Japan and 4 in Israel and the rest of the world. They belong to 6 groups of patents covering key technologies relating to ESWL systems and associated software capabilities.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>During 2008, one additional patent covering a new shock wave generation technology was granted last year in the United States, China and Israel. Two additional patents, 1 in the European Union and 1 in Japan, are also in the examination process. One patent is dedicated to the I-Sys lithotripter technology.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The UDS division&#146;s patents cover both piezoelectricity and electroconductivity technologies associated to ESWL treatment head, electrodes and localization systems. The UDS division&#146;s ongoing research and development objectives in ESWL are to further increase the clinical efficacy, the cost-effectiveness and the ease of use of its products to make them accessible to wider patient and user populations.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As with the development of our HIFU technology, we cooperate with INSERM to develop our ESWL technology. This cooperation gave rise to co-owned patents in some cases. We have entered into </font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>various license agreements with INSERM whereby we commit to pay a fixed amount of royalties to INSERM based on the net revenues generated from the sales of ESWL devices using co-owned patents. Under these agreements, which last for the life of each co-owned patents we have the exclusive right to the commercial use of the co-owned patents, including the right to out-license such commercial rights.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>UDS Division Regulatory Status</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Sonolith Praktis is available for commercial distribution in the United States, Canada, the European Union, South Korea, Australia, New Zealand and Japan. The Sonolith Vision is available for commercial distribution in the European Union, Canada, South Korea, Australia, New Zealand and Japan. The Sonolith I-Sys is available in the European Union, Korea, Canada and Australia. The UDS division continues to provide disposables, replacement parts and services for the current installed base of LT02 machines, even though we discontinued the manufacture of these machines.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>UDS Division Market Potential</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We estimate that roughly 2% to 3% of the world population suffers from kidney or urethral stones during their lifetime. Urinary calculi are responsible for 10% of urological hospital admissions worldwide. Although urinary calculi may be eliminated naturally by the body, natural elimination is frequently accompanied by considerable pain and very often by serious complications, such as obstruction and infection of the urinary tract.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Since its introduction in clinical practice nearly 20 years ago, ESWL has become the standard treatment for urinary calculi. ESWL consists of fragmenting calculi within the body using extracorporeal shockwaves without any surgery. We believe that the market for lithotripters includes both buyers looking for a sophisticated, higher-priced machine (generally hospitals and larger urology clinics) and buyers looking for simpler and less expensive machines (typically smaller clinics). We also believe that after a period of fast growth in the mid-1980s and early 1990s, the market for lithotripters is now mature and has become primarily a replacement and service and maintenance market.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We believe that companies with a large installed base of ESWL lithotripters will be most successful in the replacement market. Consequently, we intend to capitalize on our share of the installed base of ESWL lithotripters to gain a significant position in the replacement market for those machines. We expect the ESWL business to continue to contribute, at historically consistent levels, to the UDS division&#146;s financial results despite the mature nature of the market, due to revenues from maintenance contracts and demand for replacement machines. See Item 5, &#145;&#145;Operating and Financial Review and Prospects&#146;&#146;.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>UDS Division Competition</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The ESWL market is characterized by severe price competition among manufacturers, with the result that, in recent years, the average unit price of ESWL lithotripters has declined. The UDS division expects this trend to continue. See Item 5, &#145;&#145;Operating and Financial Review and Prospects.&#146;&#146; The UDS division&#146;s major competitors in developed countries are Siemens, Storz and Dornier.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>UDS Division Sales and Distribution of Products</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The UDS division markets, sells and services its products through our direct sales and service platform in France, Italy, Japan, South Korea and Malaysia and markets its products through agents and third-party distributors in several other countries. See Item 4, &#147;Information on the Company&#151;History and Development of the Company.&#148; </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The UDS division&#146;s customers are located worldwide and have historically been mainly public and private hospitals and urology clinics. We believe that the division&#146;s customer base provides it with excellent access to the urological community and enables it to monitor the urological market, introduce new products and conduct trials under satisfactory conditions. No single customer of the UDS division represents a significant portion of the division&#146;s installed base. The UDS division&#146;s marketing efforts include the organization of training programs for urologists worldwide.</font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The UDS division is also pursuing various distribution options that use its strong network of worldwide subsidiaries and agents. Currently, the UDS division distributes products on behalf of Urologix in Italy and Japan on behalf of Andromeda in Japan We believe that the UDS division can successfully market its worldwide distribution platform to a wide range of medical equipment development companies, thus allowing for quick, easy and economically sound entry for these companies into markets covering most of the world. </font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2> Manufacturing</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our current operations consist of manufacturing medical products in our facility that is FDA-approved and certified under international standards ISO 9001 and ISO 13485. We believe that this facility can extend its outsourced services to provide device and disposable development and manufacturing services to a wide range of medical equipment development companies. Up until December 31, 2007, the HIFU division subcontracted the manufacturing of its HIFU devices and accessories, including disposables. From January 1, 2008, each division is manufacturing its own products through EDAP TMS France. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our manufacturing policy is to manufacture the critical components for our devices and accessories (unless a subcontractor can manufacture the component more cost-effectively), perform final assembly and quality control processes and maintain our own set of production standards. We purchase the majority of the raw materials used in our products from a number of suppliers, but for several components of our products, rely on a single source. Our policy is to conduct regular quality audits of suppliers&#146; manufacturing facilities. Our principal suppliers are located in France, Germany, Denmark, Korea and the United States. Management believes that the relationships with our suppliers are good.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Quality and Design Control</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The manufacturing operations of EDAP TMS France must comply with the GMP regulations enacted by the FDA, which establish requirements for assuring quality by controlling components, processes and document traceability and retention, among other things. EDAP TMS France&#146;s facilities are also subject to scheduled inspections by the FDA. TMS has obtained the ISO 9001 (V:2000) and ISO 13485 (V:2003) certifications, which indicate compliance by EDAP TMS France&#146;s manufacturing facilities with international standards for quality assurance, design and manufacturing process control. EDAP TMS France also complies with the applicable requirements that will allow it to affix the CE Marking to certain of its products. Our manufacturing site also complies with Japanese and Canadian regulations, as well as with the US Quality System Regulation. See &#145;&#145;&#151;Government
Regulation&#151;Healthcare Regulation in the United States&#146;&#146; and &#145;&#145;&#151;Government Regulation&#151;Healthcare Regulation in the European Union.&#146;&#146;</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Property and Equipment</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We have one principal facility, which is located in Vaulx-en-Velin, on the outskirts of Lyon, France. The premises comprise 3,740 square meters and are rented under a renewable nine-year commercial lease agreement. We believe the terms of the lease reflect commercial practice and market rates. The manufacturing facility, and principal offices, which we utilize to manufacture and/or assemble all of our products, has ISO 9001 and ISO 13485 certifications. We are not aware of any environmental issues that could affect utilization of the facility.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In addition, we rent office and/or warehouse facilities in Kuala Lumpur (Malaysia), Rome (Italy), Flensburg (Germany), Moscow (Russia), Seoul (South Korea), Fukuoka, Osaka, Saporo and Tokyo (Japan).</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Government Regulation</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Government regulation in our major markets, in particular the United States, the European Union and Japan, is a significant factor in the development and marketing of our products and in our ongoing research and development activities. We are principally subject to regulation of our medical devices and of the healthcare systems in these jurisdictions generally.</font></p>
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<p style=' margin-bottom:5pt; margin-top:5pt; text-indent:8.33%;text-align:justify;'><font size=2>We and our products are regulated in the United States by the FDA under a number of statutes including the Federal Food, Drug and Cosmetic Act (&#145;&#145;FDC Act&#146;&#146;). Pursuant to the FDC Act, the FDA regulates the preclinical and clinical testing, manufacturing, labeling, distribution, sale, marketing, advertising and promotion of medical devices in the United States. Medical devices are classified in the United States into one of three classes - Class I, II or III - on the basis of the controls reasonably necessary to ensure their safety and effectiveness. Class I devices are those whose safety and effectiveness can be ensured through general controls, such as establishment and registration, medical device listing, FDA-mandated good manufacturing practices (GMP), labeling, and pre-market notification (known as &#145;&#145;510(k)&#146;&#146;).  Most Class I devices are exempt
from premarket notification and/or GMP regulations.  Class II devices are those whose safety and effectiveness can reasonably be ensured through the use of general controls and &#145;&#145;special controls,&#146;&#146; such as special labeling requirements, mandatory performance standards, and post-market surveillance. FDA may require the submission of clinical data as part of pre-market notifications for Class II devices.  Class III devices are those that must receive pre-market approval (&#145;&#145;PMA&#146;&#146;) by the FDA to ensure their safety and effectiveness. Before a new Class III device may be introduced on the market, the manufacturer generally must obtain FDA approval of a PMA. The PMA process is expensive and often lengthy, typically requiring several years, and may never result in approval. The manufacturer or the distributor of the device must obtain an Investigational Device Exemption (&#147;IDE&#148;) from the FDA before commencing human clinical trials in the
United States in support of the PMA.</font><font size=2> </font><font size=2>The lithotripsy range of products has been reclassified by the FDA as a Class II device. However, the Ablatherm device, a Class III</font><b><font size=2> </font></b><font size=2>device, has not yet been approved by FDA; it is currently under IDE Study G050103. The regulatory pathway for placement in the US market may include the pre-market notification or PMA routes.  Regardless of the regulatory route to market, FDA has mandated the submission of clinical evidence of safety and effectiveness.   </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Advertising and promotional activities in the United States are subject to regulation by the FDA and, in certain instances, by the US Federal Trade Commission. The FDC Act also regulates our quality control and manufacturing procedures by requiring us to demonstrate and maintain compliance with current GMP regulations. Our manufacturing facilities are in compliance with GMP regulations. No major deficiencies have been observed during inspections carried out by FDA auditors in the past few years.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Healthcare Regulation in the European Union</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In the European Union, we have received the ISO 9001 (V:2000) and ISO 13485 (V:2003) certifications, showing that we comply with standards for quality assurance and manufacturing and design process control. In the European Union, our products are also subject to legislation implementing the European Union Council Directive concerning medical devices (the &#145;&#145;Medical Device Directive&#146;&#146;). The Medical Device Directive provides that medical devices that meet certain safety standards must bear a certification of conformity, the European Community approval &#145;&#145;CE Marking.&#146;&#146; Except in limited circumstances, member states of the European Union</font><b><font size=2> </font></b><font size=2>may not prohibit or restrict the sale, free movement or use for its intended purpose of a medical device bearing the CE Marking. Medical devices marketed throughout the
European Union must comply with the requirement of the Medical Device Directive to bear a CE Marking (subject to certain exceptions). All of our products bear the CE Marking.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Pursuant to the Medical Device Directive, medical devices are classified into four classes, Class I, Class IIa, Class IIb and Class III, on the basis of their invasiveness and the duration of their use. The classification serves as a basis for determining the conformity assessment procedures that apply to medical devices to be eligible to receive a CE Marking. The conformity assessment procedures for Class I devices can be carried out, as a general rule, under the sole responsibility of the manufacturer, while for devices of other classes, the involvement of an authorized supervisory body is required. The extent of the involvement of such body in the development and manufacturing of a device varies according to the class under which it falls, with Class III devices being subject to the greatest degree of supervision. All of the devices currently marketed by us are Class IIb devices.</font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The import and sales of medical devices in Japan is regulated by the Ministry of Health, Labour and Welfare (&#145;the &#147;MHLW&#146;&#146;) under the license "Marketing Authorization Holder". Our Japanese subsidiary has obtained a general license as well as specific approvals to import our products that have been approved in Japan. The MHLW also administers various national health insurance programs to which each Japanese citizen is required to subscribe. These programs cover, among other things, the cost of medical devices used in operations. The MHLW establishes a price list of reimbursable prices applicable to certain medical devices under the national health insurance programs and until a new device is included in this list its costs are not covered by the programs. The LT02, the SONOLITH Praktis, the SONOLITH Vision and the Prostatron are all included on the MHLW&#146;s list for reimbursement.</font></p>



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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Item 4A. Unresolved Staff Comments</font></b></p>
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Item 5. Operating and Financial Review and Prospects</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The following discussion of our results of operations and liquidity and capital resources for the fiscal years ended December 31, 2008, 2007 and 2006 is based on, and should be read in conjunction with, the Consolidated Financial Statements included elsewhere in this annual report. The Consolidated Financial Statements have been prepared in accordance with U.S. GAAP.</font></p>
<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>The following discussion contains certain forward-looking statements that involve risks and uncertainties. See &#145;&#145;Forward-Looking Information&#146;&#146; elsewhere in this Annual Report.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Critical Accounting Policies</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The discussion and analysis of our financial condition and results of operations are based upon the Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, accounts receivable, bad debts, inventories, warranty obligations, litigation and deferred tax assets. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances.  These estimates and assumptions form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We believe our more significant judgments and estimates used in the preparation of its Consolidated Financial Statements are made in connection with the following critical accounting policies.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Revenue Recognition </font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Sales of goods:</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>For medical device sales with no significant remaining vendor obligation, payments contingent upon customer financing, acceptance criteria that can be subjectively interpreted by the customer, or tied to the use of the device, revenue is recognized when evidence of an arrangement exists, title to the device passes (depending on terms, either upon shipment or delivery), and the customer has the intent and ability to pay in accordance with contract payment terms that are fixed or determinable. For sales in which payment is contingent upon customer financing, acceptance criteria can be subjectively interpreted by the customer, or payment depends on use of the device, revenue is recognized when the contingency is resolved. We provide training and usually provide a one-year warranty upon installation. We accrue the </font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>estimated training and warranty costs at the time of sale. Revenues related to disposables are recognized when goods are delivered.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Sales of Revenue-Per-Procedure Treatments and leases:</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Revenues related to the sale of Ablatherm treatments invoiced on a &#145;&#145;Revenue-Per-Procedure&#146;&#146; (&#145;&#145;RPP&#146;&#146;) basis are recognized when the treatment procedure has been completed. If a contract of RPP includes a minimum number of treatments, the revenue is recognized on a linear basis over the contract period. For treatments in excess of minimum levels, the revenue is recognized when the treatment procedure has been completed. Revenues from devices leased to customers under operating leases are recognized on a straight-line basis.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Sales of spare parts and services:</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Revenues related to spare parts are recognized when goods are delivered. Maintenance contracts rarely exceed one year and are recognized on a linear basis. Billings or cash receipts in advance of services due under maintenance contracts are recorded as deferred revenue.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Leases and Sales and leaseback transactions</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>In accordance with SFAS 13, Accounting for Leases, we classify all leases at the inception date as either a capital lease or an operating lease. A lease is a capital lease if it meets any one of the following criteria; otherwise, it is an operating lease:</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The lease contains a bargain purchase option;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The lease term is at least 75% of the property's estimated remaining economic life;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date.</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>We enter into sale and leaseback transactions from time to time. In accordance with SFAS 13 and EITF 93-8, any profit or loss on the sale is deferred and amortized prospectively over the term of the lease, in proportion to the leased asset if a capital lease, or in proportion to the related gross rental charged to expense over the lease term, if an operating lease.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Warrants</font></b></i></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>As part of the October 2007 $20 million issuance of the convertible debentures, we issued warrants to both the investors in the convertible debentures and to the bank that assisted us as placement agent (the &#147;Placement Agent&#148;). In accordance with EITF 00-19, the warrants issued to the investors in the convertible debentures (the &#147;Investor Warrants&#148;) and the Placement Agent (the &#147;Placement Agent Warrants&#148;) are classified as a liability because the Company may be required to settle them on a net cash basis upon the occurrence of certain events outside the control of the Company. We accounted for the Investor Warrants based on their fair value at inception date, with subsequent changes in fair value recorded as financial earnings (or loss) at each balance sheet date. We use a binomial pricing model to determine the fair value of the Investor Warrants: the
binomial model was developed to capture the specific nature of this instrument, and in particular the possibility that the holder may exercise the call option at any time from the inception date. The application of the model to the warrants requires the use of subjective assumptions, including historical share price volatility, the expected life of the warrants, our risk-free interest rate, and the liquidity discount factor. A change in one or more of these assumptions could result in a material change to the estimated fair value of the Investor Warrants and the Placement Agent Warrants. See Item 3, &#147;Key Information &#150; Risk Factors &#150; Changes in the fair value of the debentures and warrants issued in the October 2007 private placement of each balance sheet date could have a significant impact on our financial condition and results of operations&#148;, &#147;&#150; Convertible Debentures&#148; below</font><b><font size=2> </font></b><font size=2>and Notes 14 and 20 to the
Financial Statements.</font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Convertible Debentures</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On October 29, 2007, the Company raised $20 million in non-secured, convertible debentures with detachable warrants. At the inception date, the Company elected to measure the instrument and its embedded derivatives in their entirety at fair value, with changes in fair value reported in the income statement under financial income, pursuant to &sect;16 of SFAS 133, as amended by SFAS 155. Thus, the convertible debentures together with their embedded derivatives are recorded as a liability, with subsequent changes in fair value recorded in financial income and expenses. The Company used a binomial valuation model to measure the fair value of the Investor Warrants and a binomial valuation model with a Company specific credit spread to measure the fair value of the convertible debentures. &#150; See Item 3, &#147;Key Information &#150; Risk Factors &#150; Changes in the fair value of the
debentures and warrants issued in the October 2007 private placement of each balance sheet date could have a significant impact on our financial condition and results of operations&#148; and Notes 14 and 20 to the Financial Statements for a detailed description of the fair value calculations.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Accounts Receivable</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We generate most of our revenues and corresponding accounts receivable from sales of medical equipment, spare parts, maintenance and service to public and private hospitals and physicians worldwide. We perform initial credit evaluations of our customers and adjust credit terms based upon customers&#146; creditworthiness as determined by such things as their payment history, credit ratings and our historical experiences.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Allowance for Doubtful Accounts</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We evaluate the collectibility of our accounts receivable based on the individual circumstances of each customer on a quarterly basis. In circumstances where we are aware of a specific customer&#146;s inability to meet its financial obligations to us (e.g., bankruptcy filings, substantial downgrading of credit scores), we record a specific reserve for bad debts against amounts due to reduce the net recognized receivable to the amount we reasonably believe we will collect. If circumstances change (i.e. higher than expected defaults or an unexpected material adverse change in a major customer&#146;s ability to meet its financial obligations to us), our estimates of the recoverability of amounts due to us could be reduced by a material amount.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Operating Results</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>Overview</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Total revenues include sales of our medical devices and sales of disposables ("sales of goods"), sales of RPPs and leases, and sales of spare parts and services, all net of commissions, as well as other revenues.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Net sales of goods have historically been comprised of net sales of medical devices (Prostatrons, ESWL lithotripters and Ablatherms) and net sales of disposables (mostly Ablapaks in the HIFU division and electrodes in the Lithotripsy division). The sale price of our medical devices is subject to variation based on a number of factors, including market competitive environment, warranties and payment terms. Consequently, a particular sale of a medical device may, depending on its terms, result in significant fluctuations in the average unit sale price of the product for a given period, which may not be indicative of a market trend.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Net sales of RPP (Revenue-Per-Procedure) and leases include the revenues from the sale of Ablatherm treatment procedures and from the leasing of Ablatherm machines. We provide Ablatherms to clinics and hospitals for free for a limited period, rather than selling the devices. These hospitals and clinics perform treatments using the devices and pay us on the basis of the number of individual treatments provided. With this business model, the hospital or clinic does not make an initial investment until the increase in patient demand justifies the purchase of an Ablatherm. As a consequence, we are able to make Ablatherm treatments available to a larger number of hospitals and clinics, which we believe should serve to create more long-term interest in the product. Compared to the sale of devices, this business model </font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>initially generates a smaller, but more predictable stream of revenue but, if successful, should lead to more purchases of Ablatherms in the long term.  This activity has already increased significantly in the past years and now accounts for approximately half of the net sales of the HIFU division.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Net sales of spare parts and services include revenues arising from maintenance services furnished by us for the installed base of Prostatrons, ESWL lithotripters and Ablatherms.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We derive a significant portion of both net sales of medical devices and net sales of spare parts and services from our operations in Asia, through our wholly owned subsidiaries or representative offices in Japan (Edap Technomed Co. Ltd), Malaysia (Edap Technomed Sdh Bhd) and Korea (Edap Technomed Korea). Revenue derived from our operations in Asia represented approximately 25% of our total consolidated revenue in 2008. Net sales of medical devices in Asia represented approximately 23% of such sales in 2008 and consisted primarily of sales of ESWL lithotripters and consumables. Net sales of spare parts, supplies and services in Asia represented approximately 25% of such sales in 2008 and related primarily to ESWL lithotripters, reflecting the fact that approximately 58% of the installed base of our ESWL lithotripters that we actively maintain or otherwise serve are located in Asia. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We sell our products in many parts of the world and, as a result, our business is affected by fluctuations in currency exchange rates. We are exposed to foreign currency exchange rate risk because the mix of currencies in which our costs are denominated is different from the mix of currencies in which we earn revenues. In 2008, approximately 73% of our research and development, selling, marketing and general and administrative expenses were denominated in euro, while approximately 25% of our sales were denominated in currencies other than euro (primarily the US Dollar and Japanese yen). Our operating profitability could be materially affected by large fluctuations in the rate of exchange between the euro and such other currencies. To minimize our exposure to exchange rate risks, we sometimes use certain financial instruments for hedging purposes.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Reserves for slow-moving and obsolete inventory are determined based upon quarterly reviews of all inventory items. Items which are not expected to be sold or used in production, based on management&#146;s analysis, are written down to their net realizable value, which is their fair market value or zero in the case of spare parts or disposable parts for devices that are no longer in commercial production.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Consolidated research and development expenses include all costs related to the development of new technologies and products and the enhancement of existing products, including the costs of organizing clinical trials and of obtaining patents and regulatory approvals. We do not capitalize any of our research and development expenses, except for the expenses relating to the production of machines to be used in clinical trials and that have alternative future uses as equipment or components for future research projects. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Consolidated research and development expenses, as described above, amounted to &#128;4.3 million, &#128;3.2 million and &#128;2.4 million in 2008, 2007 and 2006, respectively, representing approximately 18.5%, 14% and 12% of total revenues in 2008, 2007 and 2006, respectively. The increase in research and development in 2008 compared to 2007 was primarily due to an increase in clinical expenses for the Phase II/III PMA trials in the United States to expand our leadership in HIFU for prostate cancer (the cost of which represented 9% of total revenues in 2008). Beginning in 2009, management expects the budget for research and development expenses in Europe (excluding the conduct of FDA clinical trials in the United States) to level off at approximately 12% of total revenues, which we expect will allow us to maintain our strategy to launch new clinical studies (thus strengthening our
clinical credibility), to continue to focus our efforts on getting regulatory approvals and reimbursement in key countries, to continue to develop our HIFU and ESWL product range and to fund projects to expand the use of HIFU beyond the treatment of prostate cancer. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Selling and marketing expenses amounted to &#128;5.7 million in 2008, &#128;5.5 million in 2007 and, &#128;4.6 million in 2006. The increase of 18.5% from 2006 to 2007 was primarily due to an increase in marketing expenses to increase awareness and educate patients and physicians on the availability of the Ablatherm-HIFU technology for treating localized prostate cancer. Management expects marketing and sales efforts to stay at significant levels in the future to consolidate the Ablatherm-HIFU technology&#146;s status as a standard of care for prostate cancer in Europe.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2008, we did not record any non-recurring operating expense. In 2007, we recorded &#128;0.2 million of non-recurring operating expenses, net, including &#128;0.5 million of employee termination expenses and a &#128;0.3 million non-recurring profit with the return of the lithotripsy and HIFU devices from HealthTronics as part of the termination of the Distribution Agreement. In 2006, we recorded &#128;0.3 million of non-recurring operating expenses, including &#128;0.2 million of employee termination expenses and &#128;0.1 million of capital increase expenses. See Note 18 of the Notes to the Consolidated Financial Statements.</font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In several past years, we experienced declining sale prices in the market for ESWL lithotripters. In 2008, however, our ESWL sales had a significant increase as a result of the success of our recently launched Sonolith Isys device, and a sustained commercial effort in both the European and Asian markets. We believe that the market for ESWL lithotripters is now mature and has become primarily a replacement and maintenance market, with high equipment penetration rates driving down demand and increasing price competition. As a result of these factors, we expect unit sale prices for ESWL lithotripters worldwide to continue to decline and total market volumes to remain stable at current levels in the foreseeable future. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We believe that our results of operations in the near future will be affected by our ability to control expenses in connection with the development, marketing and commercial launch of HIFU applications, including the Ablatherm, and the funding of Ablatherm trials in the United States in order to continue the FDA process. See &#145;&#145;&#151;Liquidity and Capital Resources.&#146;&#146;  Increases, if any, in expenses may only be offset partially in the near future by revenues arising from sale of HIFU devices and treatments.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>See Item 3, &#145;&#145;Key Information&#151;Risk Factors&#151;We sell our products in many parts of the world and, as a result, our business is affected by fluctuations in currency exchange rates&#146;&#146; and Item 11, &#145;&#145;Quantitative and Qualitative Disclosures About Market Risk&#146;&#146; for a description of the impact of foreign currency fluctuations on our business and results of operations.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Fiscal Year Ended December 31, 2008 Compared to Fiscal Year Ended December 31, 2007</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We report our segment information on a &#147;net contribution&#148; basis, so that each segment&#146;s results comprise the elimination of our intra-group revenues and expenses and thus reflect the true contribution to consolidated results of the segment. See Note 28 to the Financial Statements. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><u><i><font size=2>Total revenues</font></i></u><font size=2>. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our total revenues increased 3.3% from &#128;22.3 million in 2007 to &#128;23.1 million in 2008, principally due to sustained equipment and RPP sales in the HIFU division and the increase in Lithotripsy equipment sales.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><font size=2>HIFU division</font></i><font size=2>. The HIFU division&#146;s total net revenues remained stable at &#128;9.2 million in 2008 as compared to &#128;9.3 million in 2007. We experienced an unusually lower level of both equipment and RPP sales in the first two quarters of 2008, which we believe was due to the uncertainty in the economic and financial market worldwide. However, we increased our marketing and promotional activities in the latter half of 2008, and we experienced a higher sales level in the last quarter, offsetting the slower sales activities in the first two quarters.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The HIFU division&#146;s net sales of medical devices remained stable at &#128;2.7 million in 2008, with 7 Ablatherm units sold in 2008, as compared &#128;2.7 million in 2007, with</font><b><font size=2> </font></b><font size=2>6 units sold. The decrease in the average unit sales price from &#128;444 thousand in 2007 to &#128;384 thousand in 2008 was mostly due to the higher price level we achieved in 2007</font><b><font size=2> </font></b><font size=2>for sales into Russia.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Net sales of treatments on a mobile and fixed RPP basis slightly decreased from &#128;3.7 million in 2007 to &#128;3.5 million in 2008.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Net sales of consumables decreased 17% from &#128;1.2 million in 2007 to &#128;1.0 million in 2008 as the</font><b><font size=2> </font></b><font size=2>equipment sales to Russian customers in 2007 accompanied orders for an usually higher amount</font><b><font size=2> </font></b><font size=2>of consumables, and net sales of HIFU-related spare parts, supplies, leasing and services increased 7.5% from &#128;1.7 million in 2007 to &#128;1.9 million in 2008.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Other HIFU-related revenue increased from &#128;60 thousand in 2007 to &#128;138 thousand in 2008, as a result of the increase in the HIFU related consulting services and government subsidies for HIFU research.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><font size=2>UDS division</font></i><font size=2>. The UDS division&#146;s net revenues increased 6.6% from &#128;13.0 million in 2007 to &#128;13.9 million in 2008. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The UDS division&#146;s net sales of medical devices increased 15.9% from &#128;6.5 million in 2007 to &#128;7.5 million in 2008 with 49 devices sold in 2008 compared to 38 units sold in 2007. The 10% decrease in the average sales price in 2008 was mostly due a higher number of lower-priced Sonolith Praktis units sold </font><u><b><font size=2> </font></b></u><font size=2>in 2008 with less optional equipment. </font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Net sales of UDS-related spare parts, supplies and services decreased 2.8% from &#128;6.4 million in 2007 to &#128;6.3 million in 2008, primarily related to the ongoing expiration of service contracts with the relatively higher price levels on older generation lithotripsy machines.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Other UDS-related revenue increased from &#128;53 thousand in 2007 to &#128;59 thousand in 2008. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><u><i><font size=2>Cost of sales</font></i><font size=2>.</font></u><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Cost of sales increased 6.1% from &#128;13.1 million in 2007 to &#128;14.0 million in 2008, and represented 61.1% as a percentage of net sales in 2008, up from 59.2% as a percentage of net sales in 2007.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><u><i><font size=2>Operating expenses</font></i></u><font size=2>. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Operating expenses increased 4%, or &#128;0.5 million, from &#128;13.3 million in 2007 to &#128;13.8 million in 2008. Without the effect of the FDA/PMA trials, operating expenses decreased 2.2%., largely due to the &#128;0.5 million of non-recurring expenses in 2007.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The costs associated with the FDA/PMA trial accounted for &#128;2.2 million in 2008 compared to &#128;1.7 million in 2007, comprising mostly clinical and administrative expenses due to the ongoing PMA trials in the United States. These FDA/PMA trials also included in 2007 a one-time settlement that resulted in a &#128;0.3 million gain recognized as part of the termination agreement negotiated with HealthTronics.  </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Excluding the FDA/PMA trials, marketing and sales expenses increased &#128;0.3 million, or 5.4%, mostly due to the UDS division&#146;s activities to support the commercial introduction of the new Sonolith Isys lithotripsy device, while HIFU marketing and sales efforts remained stable in uncertain markets. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Excluding the FDA/PMA trials, research and development expenses remained stable at &#128;2.2 million in 2008 and 2007.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Excluding the FDA/PMA trials, general and administrative expenses decreased 11.1% from &#128;4.2 million in 2007 to &#128;3.8 million in 2008, mostly due to the &#128;0.5 million of non-recurring expenses in 2007 relating to the severance packages for certain</font><b><font size=2> </font></b><font size=2>senior executives. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><u><i><font size=2>Operating loss</font></i><font size=2>.</font></u><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As a result of the factors discussed above, we recorded a consolidated operating loss of &#128;4.7 million in 2008, as compared to a consolidated operating loss of &#128;4.1 million in 2007.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Excluding the expenses of the FDA/PMA trials, the consolidated operating loss in 2008 was &#128;2.5 million, an improvement of  &#128;0.2 million when compared to the previous year.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We realized an operating profit in the HIFU division of &#128;0.5 million in 2008, compared to &#128;0.2 million in 2007 and an operating loss in the UDS division of &#128;1.0 million in 2008, as compared to operating loss of &#128;0.6 million in 2007. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><font size=2>Interest result, net</font></i><font size=2>. Interest result, net was a gain of &#128;5.2 million in 2008, including &#128;6.7 million of debt fair value variation, compared with a loss of &#128;1.2 million in 2007.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><font size=2>Foreign currency exchange gains (loss), net</font></i><font size=2>. In 2008, we recorded a net foreign currency exchange gain of &#128;0.6 million, mainly due to favorable exchange rate variation of the US Dollar and the Japanese Yen against the euro, compared to a loss of &#128;0.3 million in 2007 mainly due to the weakening of the Japanese yen against the euro.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><font size=2>Other income (expense), net</font></i><font size=2>. Other income (expense), net was a loss of &#128;1 thousand in 2008, </font><font size=2>compared to a gain of &#128;16 thousand in 2007. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><font size=2>Income taxes</font></i><font size=2>. We recorded a corporate income tax benefit of &#128;492 thousand in 2008 compared to a benefit of &#128;140 thousand in 2007. The increase was mainly due to exceptional research and development tax credits in 2008, resulting from the French government decision to increase R&amp;D tax advantages, and from an exceptional acceleration in tax filings that allowed us to record in 2008 of both 2007 and 2008 R&amp;D tax credits.</font><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We realized a consolidated net profit of &#128;1.6 million in 2008 compared with consolidated net loss of &#128;5.4 million in 2007, as a result of the factors mentioned above.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Fiscal Year Ended December 31, 2007 Compared to Fiscal Year Ended December 31, 2006</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As from the first quarter of 2007, we elected to report our segment information on a &#147;net contribution&#148; basis, so that each segment&#146;s results comprise the elimination of our intra-group revenues and expenses and thus reflect the true contribution to consolidated results of the segment. See Note 28 to the Financial Statements. We have reclassified our 2006 results using this method for comparative purposes. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><u><i><font size=2>Total revenues</font></i></u><font size=2>. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our total revenues increased 10% from &#128;20.3 million in 2006 to &#128;22.3 million in 2007, principally due to the transition in the HIFU division to the new RPP model and the increase in the number of HIFU treatments.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><font size=2>HIFU division</font></i><font size=2>. The HIFU division&#146;s total net sales increased 22% from &#128;7.6 million in 2006 to &#128;9.3 million in 2007, principally due to an increase in Ablatherm RPP and revenues related to disposables and service activity.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The HIFU division&#146;s net sales of medical devices increased 2%, from &#128;2.6 million in 2006 to &#128;2.7 million in 2007, with six Ablatherm units sold in 2007 compared to eight units sold in 2006. The increase in the average unit sales price from &#128;326 thousand in 2006 to &#128;444 thousand in 2007 was due to the fact that three of the devices sold in 2006 were used machines and only new machines were sold in 2007.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Net sales of treatments on a mobile and fixed RPP basis increased 33%, from &#128;2.8 million in 2006 to &#128;3.7 million in 2007. This was a result of our efforts to increase patient and physician awareness about the availability of Ablatherm-HIFU treatment for localized prostate cancer, which has increased demand from hospitals and clinics, as well as from patients, for this HIFU treatment. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As a result of that increase in the number of total HIFU treatments, net sales of consumables increased 60% from &#128;0.7 million in 2006 to &#128;1.2 million in 2007, and net sales of HIFU-related spare parts, supplies, leasing and services increased 17% from &#128;1.5 million in 2006 to &#128;1.7 million in 2007.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Other HIFU-related revenue decreased from &#128;66 thousand in 2006 to &#128;60 thousand in 2007.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><font size=2>UDS division</font></i><font size=2>. The UDS division&#146;s net sales increased 3% from &#128;12.6 million in 2006 to &#128;12.9 million in 2007. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The UDS division&#146;s net sales of medical devices increased 8% from &#128;6.0 million in 2006 to &#128;6.5 million in 2007 with 38 devices sold in 2006 and 2007 and a better Average Sales Price in 2007 due to better sales in the higher price segment, mostly due to the launch of the new Sonolith I-sys and despite a negative Japanese yen/euro exchange rate. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Net sales of UDS-related spare parts, supplies and services decreased 2% from &#128;6.6 million in 2006 to &#128;6.4 million in 2007, primarily related to the expiration of more profitable service contracts on older generation lithotripsy machines that were not renewed.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Other UDS-related revenue increased from &#128;26 thousand in 2006 to &#128;53 thousand in 2007. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><u><i><font size=2>Cost of sales</font></i><font size=2>.</font></u><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Cost of sales increased 10% from &#128;11.9 million in 2006 to &#128;13.1 million in 2007, stable at 59.2% as a percentage of net sales.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><u><i><font size=2>Operating expenses</font></i></u><font size=2>. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Operating expenses increased 16%, or &#128;1.9 million, from &#128;11.4 million in 2006 to &#128;13.3 million in 2007. This increase in operating expenses resulted from costs associated with the resumption of the FDA clinical trials and sustained efforts in Europe to improve market education on HIFU and to enhance our Ablatherm-HIFU position.</font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The costs associated with the FDA/PMA trial accounted for &#128;1.7 million of expenses, comprising mostly clinical and administrative expenses due to the takeover of the PMA trial sponsorship from HealthTronics and the resumption of the selection of clinical centers and patient enrollment. These FDA/PMA trials also included a one-time settlement that resulted in a &#128;0.3 million gain recognized as part of the termination agreement negotiated with HealthTronics.  </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Excluding the FDA/PMA trials, marketing and sales expenses increased &#128;0.8 million, or 17%, mostly in the HIFU division which accounted for &#128;0.5 million of the increase, or 21%, as a result of the continuing efforts to increase market acceptance and penetration in Europe through the HIFU-RPP model, while expenses in the UDS division increased &#128;0.3 million to prepare for the launch of the new Sonolith I-Sys lithotripsy device.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Excluding the FDA/PMA trials, research and development expenses decreased from &#128;2.4 million in 2006 to &#128;2.3 million in 2007, mostly due to the reallocation of research and development resources to support the FDA/PMA trials, while research and development expenses in the UDS division were stabilized after a more significant effort in the previous year to develop the new lithotripsy machine.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Excluding the FDA/PMA trials, general and administrative expenses decreased from &#128;4.1 million in 2006 to &#128;3.7 million in 2007, a decrease of 9%, while non-recurring expenses increased &#128;0.3 million due to the impact of the severance packages of some senior executives.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><u><i><font size=2>Operating loss</font></i><font size=2>.</font></u><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As a result of the factors discussed above, we recorded a consolidated operating loss of &#128;4.1 million in 2007, which included expenses for general corporate purposes and the expenses incurred for the resumption of the FDA/PMA trials, as compared to a consolidated operating loss of &#128;3.1 million in 2006.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Excluding the expenses of the FDA/PMA trials, the consolidated operating loss in 2007 was &#128;2.7 million, an improvement of  &#128;0.4 million when compared to the previous year.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We realized an operating profit in the HIFU division of &#128;0.2 million in 2007, compared to an operating loss of &#128;0.1 million in 2006 and an operating loss in the UDS division of &#128;0.6 million in 2007, as compared to operating loss of &#128;1.1 million in 2006. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><font size=2>Interest result, net</font></i><font size=2>. Interest result, net was a loss of &#128;1.2 million in 2007, including &#128;1.1 million of debt fair value variation, compared with a profit of &#128;0.2 million in 2006.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><font size=2>Foreign currency exchange gains (loss), net</font></i><font size=2>. In 2007, we recorded a net foreign currency exchange loss of &#128;0.3 million, compared to a loss of &#128;0.4 million in 2006, in each case mainly due to the continued weakening of the Japanese yen against the euro.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><font size=2>Other income (expense), net</font></i><font size=2>. Other income (expense), net was a gain of &#128;16 thousand in 2007, compared to a loss of &#128;5 thousand in 2006. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><font size=2>Income taxes</font></i><font size=2>. We recorded a corporate income tax profit of &#128;140 thousand in 2007 compared to an expense of &#128;56 thousand in 2006.  </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><u><i><font size=2>Net loss</font></i><font size=2>.</font></u><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We realized a consolidated net loss of &#128;5.4 million in 2007 compared with consolidated net loss of &#128;3.4 million in 2006, as a result of the factors mentioned above.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Effect of Inflation</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Management believes that the impact of inflation was not material to our net sales or loss from operations in the three years ended December 31, 2008.</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><A NAME="PAGENUM"><font size=2>39</font></A></p> </td>
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<b><font size=2>Liquidity and Capital Resources</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our cash flow has historically been subject to significant fluctuations over the course of any given financial year due to cyclical demand for medical devices. Cyclical demand has historically resulted in significant annual and quarterly fluctuations in trade and other receivables and inventories, and therefore led to significant variations in working capital requirements and operating cash flows that were not necessarily indicative of changes in our business. We believe our working capital is sufficient for our present working capital requirements although we have in the past experienced negative cash flows and associated risks to liquidity, and may in the future experience the same. Our negative cash flow situation is described in more detail below. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We anticipate that cash flow in future periods will be mainly derived from ongoing operations and any capital raising the Company would potentially undertake. We do not have any commercial commitments nor do we employ any off-balance sheet financing. Because we anticipate relying principally on cash and cash equivalent balances to meet our liquidity requirements, a decrease in the demand for our products, or the inability of our customers to meet their financial obligations to us due to operating difficulties or adverse market conditions, would reduce the availability of funds to us. Additionally, failure to meet our obligations arising out of the convertible debentures issued in the October 2007 private placement would cause us to incur substantial penalties in the form of liquidated damages and could, over the passage of time, lead to an event of default under the debentures. Payment of
liquidated damages or mandatory default amount will have a material adverse effect on our financial condition and results of operation. See Item 3, &#147;Key Information &#150; Risk Factors &#150; Risks Relating to the October 2007 Private Placement.&#148;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our cash position as of December 31, 2008, 2007 and 2006, was &#128;15.0 million (including &#128;1.1 million of short-term treasury investments), &#128;18.6 million (including &#128;1.1 million of short-term treasury investments) and &#128;10.9 million (including &#128;1.0 million of short-term treasury investments), respectively. We experienced negative cash flows of &#128;3.6 million in 2008, and positive cash flows of &#128;7.6 million in 2007 and  &#128;1.6 million in 2006. In 2008, our negative cash flow situation was primarily due to the lack of external financing similar to those raised in 2007 and 2006. In 2007, our positive cash flow situation was primarily due to raising approximately $17.4 million (&#128;11.9 million) in net proceeds by issuing $20 million aggregate principal amount of our convertible debentures in a private placement to fund the FDA/PMA trial for the
Ablatherm-HIFU device. Excluding the proceeds from the issuance of the convertible debentures, we experienced negative cash flows of &#128;4.2 million in 2007. In 2006, our positive cash flow situation was primarily due to the net capital increase of &#128;5.2 million realized during the summer through a $7.5 million private placement. Excluding the proceeds from this capital raise, we experienced negative cash flows of &#128;3.7 million in 2006.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2008, net cash used in operating activities was &#128;4.6 million compared with net cash used in operating activities of &#128;2.7 million in 2007 and &#128;1.9 million in 2006, respectively. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2008, net cash used in operating activities reflected principally:</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>a net profit of &#128;1.6 million; </font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>elimination of &#128;3.3 million of net expenses without effects on cash, including &#128;1.8 million of depreciation and amortization and the &#128;6.7 million profit due to changes in the fair value of financial debt and warrants;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>an increase in trade accounts receivable of &#128;3.5 million, mostly due to the exceptionally high level of sales in December 2008;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>an increase in inventories of &#128;0.1 million;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>an increase in payables of &#128;0.6 million; and</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>an increase in accrued expenses and other current liabilities of &#128;0.2 million.</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><A NAME="PAGENUM"><font size=2>40</font></A></p> </td>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2007, net cash used in operating activities reflected principally:</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>a net loss of &#128;5.3 million;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>elimination of &#128;3.1 million of net expenses without effects on cash, including &#128;1.3 million of depreciation and amortization and &#128;1.1 million due to changes in the fair value of financial debt and warrants;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>an increase in trade accounts receivable of &#128;1.6 million;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>an increase in inventories of &#128;0.8 million, mostly in anticipation of the launch of the new lithotripsy machine;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>an increase in payables of &#128;1.0 million; and</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>an increase in accrued expenses and other current liabilities of &#128;0.7 million.</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2006, net cash used in operating activities was &#128;1.9 million compared with net cash used in operating activities of &#128;0.3 million and &#128;1.1 million in 2005 and 2004, respectively. In 2006, net cash used in operating activities reflected principally:</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>a net loss of &#128;3.4 million;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>elimination of &#128;1.9 million of net expenses without effects on cash, including &#128;1.3 million of depreciation and amortization;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>an increase in trade accounts receivable of &#128;1.2 million;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>a decrease in inventories of &#128;0.4 million, reflecting dedicated actions to reduce the level of both the inventory of finished goods and spare parts; and</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
        <td  valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>an increase in accrued expenses and other current liabilities of &#128;0.3 million.</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2008, net cash used in investing activities was &#128;712 thousand compared with net cash used of &#128;1.2 million in investing activities in 2007 and &#128;1.6 million in 2006, reflecting investments of &#128;0.7 million in capitalized assets produced by the Company (mainly Ablatherm devices as a support of the RPP business model in HIFU), an investment of &#128;0.4 million in property and equipment, and net proceeds from sales of leased-back assets of &#128;1.1 million.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2007, net cash used in investing activities was &#128;1.2 million, reflecting principally an increased investment of &#128;1.9 million in capitalized assets produced by the company (mainly Ablatherm devices as a support of the RPP business model in HIFU), an investment of &#128;0.5 million in property and equipment, net proceeds from sales of leased-back assets of &#128;1.2 million and net proceeds from sales of assets of &#128;0.2 million.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2006, net cash used in investing activities reflected principally an increased investment of &#128;1.3 million in capitalized assets produced by the Company (mainly Ablatherm devices as a support of the Revenue-Per-Procedure business model in HIFU), an investment of &#128;0.2 million in property and equipment, net proceeds from sales of leased-back assets of &#128;0.7 million and net proceeds from sales of assets of  &#128;0.2 million. Cash flows from investing activities also include short term treasury investments of &#128;1.0 million, as part of the cash management investment support.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2008, net cash provided by financing activities was &#128;0.3 million compared with net cash provided in financing activities of &#128;11.8 million in 2007, and net cash used of &#128;5.2 million in 2006, reflecting principally the increase in capital of &#128;0.6 million linked with the issuance of new shares in payment of the interest coupons on the convertible debt, a long-term debt increase of &#128;0.2 million through the Japanese subsidiary, repayment of long term borrowing for &#128;0.1 million, repayment of capital lease obligations totaling &#128;0.6 million, and an increase of &#128;0.2 million in bank overdrafts.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2007, net cash provided by financing activities was &#128;11.8 million, reflecting principally the raising of net proceeds of &#128;11.9 million in convertible debt, &#128;0.4 million of net proceeds of capital raising through the exercise of warrants and stock options, a short-term debt increase of &#128;0.3 million, repayment of long term borrowing for &#128;0.1 million and repayment of capital lease obligations totaling &#128;0.6 million.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2006 net cash provided by financing activities reflected principally a share capital increase of &#128;5.2 million, a short-term debt increase of &#128;0.4 million, an increase in long term borrowing for &#128;0.2 million reimbursed of &#128;0.2 million and repayment of capital lease obligations totaling &#128;0.5 million.</font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our future cash flow may also be affected by the expansion of our mobile RPP business. In 1999, in an effort to increase the availability of our equipment, we implemented a new marketing strategy of leasing our medical devices on a monthly, quarterly or yearly basis, rather than selling them directly to end-users, and in 2002, we began to develop our mobile activity by making certain devices available to hospitals and clinics free of charge, charging instead on the basis of each procedure that was performed. Relative to the sale of devices, this business model initially generates smaller, but more predictable cash flows. The RPP model is now established in Europe as a growth and profitability model, and we will continue to expand this business model in the near future. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:9.33%;text-align:justify;'><font size=2>On October 31, 2007, we completed the private placement of $20 million aggregate principal amount of our 9% Senior Convertible Debentures due 2012. In addition, the purchasers of the convertible debentures and our Placement Agent received warrants to purchase our ordinary shares, which expire in 2013. The October 2007 private placement resulted in net proceeds of approximately $17.4 million.  The terms of the convertible debentures allow us to use the proceeds of the private placement to finance costs associated with the regulatory approval for the commercialization of Ablatherm HIFU in the United States (including related clinical trials) and for general and administrative expenses. The warrants may be exercised for cash or, under certain circumstances, through a cashless exercise procedure. If all of the warrants issued under the October 2007 private placement are fully exercised for
cash, including the warrants issued to the Placement Agent, we will receive approximately $12.8 million in cash from those warrant holders. We will use any proceeds received from the exercise of warrants for the purposes agreed to under the terms of the October 2007 private placement.</font><b><font size=2> </font></b><font size=2>For further description on the terms of the convertible debentures and the use of proceeds relating to the issuance of the convertible debentures, see the Form of Securities Purchase Agreement dated as of October 29, 2007, included as Exhibit 4.5 to this annual report.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our policy is that the treasury function should maintain liquidity with the use of short-term borrowings and the minimal use of long-term borrowings. The treasury function currently adheres to this objective with the use of fixed-rate debt, which normally consists of long-term borrowing from a Japanese bank and with certain long-term borrowings consisting of sale and leaseback equipment financing. Currently the majority of our short-term debt is based on an annual variable rate: Euribor+0.5 and Eonia+0.5. We maintain bank accounts for each of our subsidiaries in the local currencies of each subsidiary. The primary currencies in which we maintain balances are the euro, the U.S. dollar and the Japanese yen. To minimize our exposure to exchange rate risks, we may use certain financial instruments for hedging purposes from time to time. As of December 31, 2008, there were no outstanding
hedging instruments.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><b><font size=2>Contractual Obligations and Commercial Commitments as of December 31, 2008 (in thousands of euro, excluding interest expenses)</font></b></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:16.55pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="5" valign=bottom style=' height:16.55pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Payments Due by Period</font></b></p> </td> </tr>
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        <td width="37%" style='border-bottom:solid black .5pt; height:33.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:33.15pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:33.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Total</font></b></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:33.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Less than<br>
      1 year</font></b></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:33.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>1-3 years </font></b></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:33.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>4-5 years </font></b></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:33.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>More than <br>
      5 years</font></b></p> </td> </tr>
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        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Short-Term Debt.............................. </font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>1,753</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>1,753</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
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      <td valign=bottom style=' height:12.75pt'><font size=2>Long-Term Debt..............................</font></td>
      <td valign=bottom style=' height:12.75pt'>&nbsp;</td>
      <td valign=bottom style=' height:12.75pt'><div align="center"><font size=2>9,579 </font></div></td>
      <td valign=bottom style=' height:12.75pt'><div align="center"><font size=2>79</font></div></td>
      <td valign=bottom style=' height:12.75pt'><div align="center"><font size=2>&#151;</font></div></td>
      <td valign=bottom style=' height:12.75pt'><div align="center"><font size=2>9,500</font></div></td>
      <td valign=bottom style=' height:12.75pt'><div align="center"><font size=2>&#151;</font></div></td>
    </tr>
    <tr style='height:0pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Capital Lease Obligations..............</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2,019</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>708</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>1,271</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>40</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td  colspan="2" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Operating Leases............................</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>1,275</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>532</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>743</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151; </font></p> </td>
      <td width="10%" valign=bottom style=' height:12.75pt'><p style='margin-left:0pt;text-indent:1.25pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>New Accounting Pronouncements </font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.16%;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:8.16%;text-align:left;'><font size=2>In February, 2008, the FASB issued FASB Staff Position (&#147;FSP&#148;) FASB 157-2, &#147;Effective Date of FASB Statement No. 157.&#148; This FSP delays the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial </font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><A NAME="PAGENUM"><font size=2>42</font></A></p> </td>
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<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>statements on a recurring basis (at least annually). The effective date for nonfinancial assets and nonfinancial liabilities has been delayed by one year to fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. The Company has not completed its analysis of the potential impact of the adoption of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities (effective January 1, 2009) on the Company&#146;s financial position and results of operations. </font></p>
<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:8.16%;text-align:left;'><font size=2>In March 2008, the FASB issued SFAS No. 161 (SFAS 161), &#147;Disclosures about Derivative Instruments and Hedging Activities.&#148;  SFAS 161 amends and expands the disclosure requirements of SFAS No. 133, &#147;Accounting for Derivative Instruments and Hedging Activities&#148;, and is effective for fiscal years beginning after November 15, 2008. The Company has not determined yet the effect on consolidated financial statements, if any, upon adoption of SFAS 161.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>In April 2008, the FASB issued FASB Staff Position (&#147;FSP&#148;) SFAS No. 142-3, &#147;</font><i><font size=2>Determination of the Useful Life of Intangible Assets&#148;</font></i><font size=2>. This FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, </font><i><font size=2>&#147;Goodwill and Other Intangible Assets&#148; </font></i><font size=2>(&#147;SFAS 142&#148;). The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141R, and other GAAP. This FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal
years. Early adoption is prohibited. The Company has not determined yet the effect on consolidated financial statements, if any, upon adoption of SFAS 142-3.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In May 2008, the FASB issued Staff Position FSP APB 14-1 (FSP APB 14-1), &#147;Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement).&#148;  FSP APB 14-1 requires companies that have issued convertible debt that may be settled wholly or partly in cash when converted, to account for the debt and equity components separately.  The value assigned to the bond liability is the estimated value of a similar bond without the conversion feature as of the issuance date.  The difference between the proceeds for the convertible debt and the amount reflected as a bond liability is recorded as additional paid-in-capital.  Interest expense is recorded using the issuer&#146;s comparable debt rate.  FSP APB 14-1 is effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years and will require
retrospective application</font><font color="#008000"><font size=2>. </font></font><font size=2>The Company does not expect that this will have a significant impact on its consolidated financial statements.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In June 2008, the FASB issued Financial Accounting Standards Board Staff Position EITF 03-6-1, </font><i><font size=2>Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities </font></i><font size=2>(&#147;FSP EITF 03-6-1&#148;). The FSP provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method in accordance with SFAS 128, Earnings per Share. The FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. Upon adoption, the Company is required to retrospectively adjust its earnings per share data to conform with the provisions in this FSP. Early
application of this FSP is prohibited. The Company has not determined yet the effect on consolidated financial statements, if any, upon adoption of FSP EITF 03-6-1.</font></p>
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Research and Development, Patents and Licenses</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>See &#147;&#151;Operating Results&#151;Overview&#148; and Item 4, &#145;&#145;Information on the Company&#151;High Intensity Focused Ultrasound Division&#151;HIFU Division Patents and Intellectual Property&#146;&#146; and &#145;&#145;Information on the Company&#151;Urology and Services Division&#151;UDS Division Patents and Intellectual Property.&#146;&#146;</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Off-Balance Sheet Arrangements</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We have no off-balance sheet arrangements.</font></p>
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<b><font size=2>Item 6. Directors, Senior Management and Employees</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>Senior Executive Officers</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The following table sets forth the name, age and position of each of our Senior Executive Officers as of March 16 2009. The Chief Executive Officer and the Chief Financial Officer listed below have entered into employment contracts with us or our subsidiaries (which permit the employee to resign subject to varying notice periods). In addition, in case of a change of control of the Company, or of a termination of their employment contract by the Company without cause, the Senior Executive Officers are entitled to receive severance packages totaling approximately &#128; 0.4 million. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'>&nbsp;</p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:3.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Philippe Chauveau</font></p> </td>
        <td width="10%" nowrap valign=top style='padding:3.0pt 0in 0in 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>73</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Chairman of the Board of Directors</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:24.98%; text-indent:-24.98%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:24.98%;text-align:justify;'><font size=2>In 1997, Philippe Chauveau was named chairman of EDAP TMS S.A.'s </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:24.98%;text-align:justify;'><font size=2>Supervisory Board, involving a two-tier board structure overseeing a Management  Board. In 2002, both these boards were replaced by a single Board of Directors, which Philippe Chauveau headed as Chairman and CEO. While remaining Chairman of the Board, he was succeeded by Hugues de Bantel as CEO in 2004, and by Marc Oczachowski in 2007. Since 2000, and up to 2007, Philippe Chauveau also served as founding Chairman of the Board of Scynexis Inc., funded by private equity, which is an innovative drug discovery company based in the United States, partnering with major pharmaceutical companies worldwide. He is also personal executive coach to senior research leaders at Hoffmann LaRoche. Additionally, he is involved in management development programs at Solvay Business School in Brussels, Belgium.  He was Vice-President of research and development at AT&amp;T Bell Labs and has also served as
Chairman of Apple Computer Europe, preceded by increasing marketing roles in ITT and in Procter &amp; Gamble. He has an Honours Degree from Trinity College Dublin with a B.A. and a Bsc.</font></p>
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    <td nowrap valign=top style='padding:3.0pt 0in 0in 0in; '><font size=2>Marc Oczachowski </font></td>
    <td nowrap valign=top style='padding:3.0pt 0in 0in 0in; '><font size=2>38</font></td>
    <td nowrap valign=top style='padding:3.0pt 0in 0in 0in; '><font size=2>Chief Executive Officer of EDAP TMS S.A. and President of the HIFU Division and the UDS Division</font></td>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:24.98%;text-align:justify;'><font size=2>Marc Oczachowski joined the Company in May 1997 as Area Sales Manager, </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:24.98%;text-align:justify;'><font size=2>based in Lyon, France. From March 2001 to January 2004, he held management positions as General Manager of EDAP Technomed Malaysia. He was appointed Chief Operating Officer of EDAP TMS in November 2004 and became Chief Executive Officer of the Company on March 31,<sup> </sup>2007. Previously he worked for Sodem Systems, which manufactures orthopaedic power tools, as Area Sales Manager. He is a graduate of Institut Commercial de Lyon, France.</font></p>
<p style=' margin-bottom:0pt; margin-top:3pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Eric Soyer</font></p> </td>
        <td width="10%" nowrap valign=top style='padding:3.0pt 0in 0in 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>42</font></p> </td>
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  <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Chief Financial Officer of EDAP TMS S.A.</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:3pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:24.98%;text-align:justify;'><font size=2>Eric Soyer joined the Company in December 2006. He was previously CFO of Medica, a &#128;270 million French company operating 108 nursing home and post-care clinics throughout France and Italy. Previously he was CFO and a Managing Director of April Group, an insurance services company listed on the Paris stock exchange, with 22 subsidiaries in France, the UK, Spain, Germany and Italy. He has international experience as a controller and cost accountant for Michelin Group in France, the United States and Africa. Eric Soyer has a BA degree from Clermont Graduate School of Management, an MBA degree from the University of Kansas and an Executive MBA degree from the HEC Paris School of Management. </font></p>
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<b><font size=2>Board of Directors</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The following table sets forth the names and backgrounds of the members of the Board of Directors. The mandate for each member of the Board of Directors expires on the date of the annual meeting of shareholders approving the financial results for fiscal year 2013, in June 2014. There is no contract providing for benefits upon termination of the directors&#146; mandates.</font></p>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0in'><font size=2>Philippe Chauveau</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:6.0pt;margin-bottom:0pt'><font size=2>See biography under &#147;&#151;Senior Executive Officers.&#148;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Pierre Beysson</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Age: 67</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Pierre Beysson was appointed as a member of the Board of Directors in September 2002. Pierre Beysson was then the Chief Financial Officer of Compagnie des Wagons-Lits ("CWL"), the on-board train service division of Accor, a French multinational Hotel and Business Services Group. In this capacity, he sat on a number of boards of companies related to the Accor Group. He is now a mergers and acquisitions consultant. Before his assignment at CWL, Pierre Beysson held a number of senior financial positions with Nixdorf Computers, Trane (Air Conditioning), AM International (Office Equipment) and FMC (Petroleum Equipment). Pierre Beysson was trained as a CPA, has auditing experience and has an MBA from Harvard Business School.</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Karim Fizazi</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Age: 43</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Dr. Karim Fizazi was appointed as a member of the Company's Board of Directors in November 2002. He is currently Chairman of the Genito-Urinary Oncology group at Institut Gustave Roussy in Villejuif, France, which is the biggest cancer center in Europe. He was appointed Head of Department of Medicine of Institut Gustave Roussy in 2005. He was visiting Assistant Professor, Genitourinary Medical Oncology Department, MD Anderson Cancer Center in Houston, Texas for 18 months. His residency included a position at the Institut Curie in Paris.</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Jean-Philippe Deschamps</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Age: 67</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Pr. Jean-Philippe Deschamps was appointed as a member of the Company's Board of Directors in March 2007. He is Emeritus Professor of Technology and Innovation Management at IMD, in Lausanne, Switzerland. Prior to joining IMD in November 1996, he was based in Brussels as a corporate Vice-President with Arthur D. Little and Chairman of the firm's technology and innovation management practice, which he created in 1981. Before that, he was Arthur D. Little's first European practice leader for strategy and organization. He has thirty years of international management consulting experience throughout Europe, North America, Asia and the Middle East. He graduated from Ecole des Hautes Etudes Commerciales in Paris and received his MBA from INSEAD and from the Harvard Business School. </font></p>
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Compensation and Options</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The entire Board of Directors acts as a &#145;&#145;Compensation Committee&#146;&#146; to review the compensation of our Senior Executive Officers, as per the approved charter of the &#147;Compensation Committee&#148;, and to propose any changes to compensation paid to the Board of Directors, provided that the majority of independent members participate in the votes for Management compensations.  Aggregate compensation paid or accrued for services in all capacities by the Company and its subsidiaries to Senior Executive Officers and to the Board of Directors as a group for the fiscal year 2008 was approximately &#128;0.77 million. No amount was set aside or accrued by us to provide pension, retirement or similar benefits for Senior Executive Officers and to the Board of Directors as a group in respect of the year 2008.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2008, Senior Executive Officers held an aggregate of 191,763 options to purchase or to subscribe to shares of our common stock, with a weighted average exercise price of &#128;3.71 per shares. Of these options, 6,425 expire on June 18, 2012, 30,000 expire on February 24, 2014 and 155,338 expire on October 29, 2017.</font></p>
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<p style=' margin-bottom:0pt; margin-top:3pt;text-align:justify;'><b><font size=2>Audit Committee</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Board of Directors&#146; Audit Committee comprises four fully independent members: Mr. Pierre Beysson, acting as Head of the Audit Committee, Mr. Philippe Chauveau, Dr. Karim Fizazi and Pr. Jean-Philippe Deschamps. The purpose of the Committee, conforming to its annually approved charter, is to:</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Provide assistance to the Board of Directors in fulfilling their oversight responsibility to the shareholders, potential shareholders, the investment community and others relating to: the integrity of our financial statements, our compliance with legal and regulatory requirements, our accounting practices and financial reporting processes, the effectiveness of our disclosure controls and procedures and internal control over financial reporting, the independent auditor&#146;s qualifications and independence, and the performance of our internal audit function and independent auditors.</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Prepare the Audit Committee report that SEC proxy rules require to be included in our annual proxy statement. The Audit Committee may request any officer or employee of the Company or our outside counsel or independent auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>Employees</font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2006, we employed 142 individuals on a full-time basis, employed as follows: </font></p>
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        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Sales &amp; Marketing</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Manufacturing</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Service</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Research &amp; Dvpt</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Regulatory</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Clinical Affairs</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Administrative</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Total</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>France</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>15</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>22</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>24</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>9</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>17</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>93</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>Italy</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>5</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>Germany</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>6</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>Japan</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>9</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>14</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>4</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>29</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>Malaysia</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>7</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>South Korea</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>1</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>1</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:right;margin-top:3pt;margin-bottom:0pt'><b><font size=2>Total =</font></b></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>32</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>22</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>43</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>9</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>5</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>28</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>142</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2007, we employed 148 individuals on a full-time basis, employed as follows: </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Sales &amp; Marketing</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Manufacturing</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Service</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Research &amp; Dvpt</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Regulatory</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Clinical Affairs</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Administrative</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Total</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>France</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>14</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>29</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>20</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>10</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>4</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>16</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>95</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>Italy</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>5</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>Germany</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>8</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>Japan</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>8</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>15</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>4</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>29</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>Malaysia</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>7</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>South Korea</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>1</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>1</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>Russia</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>1</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>1</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font SIZE=2>USA</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>1</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>1</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:right;margin-top:3pt;margin-bottom:0pt'><b><font size=2>Total =</font></b></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>32</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>29</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>40</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>10</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>6</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>28</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>148</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1></font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white; padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="33%" valign=top style=background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><A NAME="PAGENUM"><font size=2>46</font></A></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:140.25pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always"><HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'>
</p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2008, we employed 149 individuals on a full-time basis, employed as follows: </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Sales &amp; Marketing</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Manufacturing</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Service</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Research &amp; Dvpt</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Regulatory</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Clinical Affairs</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Administrative</font></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>Total</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>France</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>16</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>31</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>19</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>11</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>4</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>13</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>96</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>Italy</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>5</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>Germany</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>4</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>8</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>Japan</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>9</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>15</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>29</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>Malaysia</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>7</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>South Korea</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>1</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>1</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>2</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=2>Russia</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>1</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>1</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font SIZE=2>USA</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>1</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>1</font></p> </td> </tr>
    <tr>
        <td width="12%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:right;margin-top:3pt;margin-bottom:0pt'><b><font size=2>Total =</font></b></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>36</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>31</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>39</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>11</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>6</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>23</font></p> </td>
        <td width="10%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:3pt;margin-bottom:0pt'><font size=2>149</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>Management considers labor relations to be good. Employee benefits are in line with those specified by applicable government regulations.</font></p>
<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>Share Ownership </font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of March 20, 2009, the total number of shares issued was 10,006,333, with 423,740 shares held as Treasury Stocks, thus bringing the total number of shares outstanding to 9,582,593.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of March 20, 2009, the Board of Directors and the Senior Executive Officers of the Company held a total of 224 Shares.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>Options to Purchase or Subscribe for Securities</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of March 16 2009, we had sponsored five stock purchase and subscription option plans. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On May 14, 1998, the shareholders of EDAP TMS S.A. authorized the Board of Directors to grant up to 713,425 options to purchase pre-existing Shares at a fixed exercise price to be set by the Board of Directors. The shareholders also authorized the Board of Directors to cause EDAP TMS S.A. to repurchase up to 535,675 of its own Shares (treasury stock) to cover the options granted under the new plan. Up to 279,000 of the 713,425 options were reserved for modification of the terms of pre-existing options.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On June 12, 2001, the shareholders of EDAP TMS S.A. authorized the Board of Directors to grant up to 300,000 options to purchase pre-existing Shares and 80,000 options to subscribe to new Shares, at a fixed exercise price to be set by the Supervisory Board.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On January 29, 2004, the shareholders of EDAP TMS S.A. authorized the Board of Directors to grant up to 240,000 options to purchase pre-existing Shares and 100,000 options to subscribe to new Shares, at a fixed price to be set by the Board of Directors. All of the Shares that may be purchased through the exercise of stock options are currently held as treasury stock.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On February 17, 2005, the shareholders of EDAP TMS S.A. authorized the Board of Directors to grant up to 625,000 free shares to be issued to certain employees of the Company, subject to compliance with the conditions and performance criteria fixed by the Board of Directors. On March 30, 2005, 500,900 rights to subscribe for free shares were granted by the Board of Directors, based on certain performance criteria to be met for years 2005 and 2006. However, given the dramatic shift of business model during 2005 from the sales of Ablatherm equipment towards the sales of treatment procedures (RPPs), on January 6, 2006, the Board of Directors decided to cancel the 2005 allocation plan and to set up a new one reflecting the new business model for years 2006 and 2007. On January 6, 2006, in accordance with the Performance Stock Plan authorized by the shareholders, 564,100 rights to subscribe to
new shares were distributed, including new entrants. On July 3, 2006, an additional 13,800 rights to subscribe to new shares </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><A NAME="PAGENUM"><font size=2>47</font></A></p> </td>
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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>were distributed to new entrants. On March 8, 2007, 47,100 rights to subscribe to new shares were granted to new entrants by the Board of Directors, based on certain performance criteria to be met for years 2007 and 2008. On that same date, upon reviewing and approving the consolidated 2006 results, the Board confirmed that 2006 performance criteria fixed by the Board on January 6, 2006 were not met. 313,680 rights to subscribe to new shares, based on these fixed performance criteria were then cancelled and these shares will then never be subscribed and issued. On March 8, 2007, a revised business model was approved by the Board of Directors for years 2007 and 2008. On that date, 47,100 rights to subscribe to new shares were granted to new entrants, subject to the achievement of certain milestones based on the revised 2007-2008 business model. As of December 31, 2007 none of the milestones for the year
2007, fixed by the January 6, 2006 Board of Directors, have been reached, and only one milestone fixed by the March 8, 2007 Board of Directors has been reached, thus triggering the allocation of 7,065 new shares to some employees. As per the Performance Stock Plan approved on March 8, 2007, these shares will only be issued on July 2009. As of December 31, 2007, 211,435 rights to subscribe to new shares, based on these fixed performance criteria for the year 2007 were then cancelled and these shares will then never be subscribed and issued. As of December 31, 2007, only 18,840 rights out of the 625,000 initially granted were still in force, based on 2008 milestones. As of December 31, 2008, only one milestone, out of four milestones fixed by the Board of Directors on March 8, 2007, was reached on 2008 performance goals, thus triggering the allocation of 4,710 new shares to some employees. A total of 11,775 new shares will then be issued in July 2009 conforming the March 8, 2007 plan.
As of December 31, 2008, no right under the February 2005 authorization remained in force.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On May 22, 2007, the shareholders of EDAP TMS S.A. authorized the Board of Directors to grant up to 600,000 options to subscribe to 600,000 new Shares and up to 105,328 options to purchase pre-existing Shares at a fixed price to be set by the Board of Directors. All of the Shares that may be purchased through the exercise of stock options are currently held as treasury stock.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On December 31, 2008, the duration of our stock option contracts was as follows:</font></p>
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<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:25.95pt'>
        <td width="37%" style='border-bottom:solid black .5pt; height:25.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Months until expiration</font></b></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:25.95pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:25.95pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:25.95pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:25.95pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="6%" valign=bottom style='border-bottom: solid black .5pt;height:25.95pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14%" valign=bottom style='border-bottom: solid black .5pt;height:25.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Number of Shares </font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="6%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,212</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>33</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="6%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>52,000</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>42</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="6%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,425</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>62</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="6%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>162,000</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>106</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="6%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>485,088</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2008, a summary of stock option activity to purchase or to subscribe to Shares under these plans is as follows:</font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="37%" style='height:12.75pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2008</font></p> </td>
        <td  colspan="2" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2007</font></p> </td>
        <td  colspan="2" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2006</font></p> </td> </tr>
    <tr style='height:51.0pt'>
        <td width="37%" style='height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign="top" style='border-bottom:solid black .5pt; height:51.0pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Options </font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted<br>
            average<br>
            exercise<br>
            price</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(&#128;)</font></p> </td>
        <td width="10%" valign="top" style='border-bottom:solid black .5pt; height:51.0pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Options </font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted <br>
            average <br>
            exercise <br>
            price</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(&#128;)</font></p> </td>
        <td width="10%" valign="top" style='border-bottom:solid black .5pt; height:51.0pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Options </font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted<br>
            average<br>
            exercise<br>
            price</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(&#128;)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Outstanding on January 1,</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>781,625</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
      <p align="center" style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.51</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>502,162</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2.49</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>593,262</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p align="center" style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2.58</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Granted</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
      <p align="center" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>504,088</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.99</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p align="center" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Exercised</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
      <p align="center" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(183,750)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2.03</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(72,600)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p align="center" style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.20</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Forfeited</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(34,000)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
      <p align="center" style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.59</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(7,250)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2.60</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(18,500)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p align="center" style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2.60</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Expired</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(40,900)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
      <p align="center" style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.37</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(33,625)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.81</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p align="center" style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;-</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="37%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Outstanding on December 31,</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>706,725</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
      <p align="center" style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.51</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>781,625</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.51</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>502,162</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p align="center" style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2.49</font></p> </td> </tr>
    <tr style='height:14.25pt'>
        <td width="37%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Exercisable on December 31,</font></p> </td>
        <td width="10%" valign=bottom style=height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>342,929</font></p> </td>
        <td width="10%" valign=bottom style=height:14.25pt'>
      <p align="center" style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3.00</font></p> </td>
        <td width="10%" valign=bottom style=height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>234,787</font></p> </td>
        <td width="10%" valign=bottom style=height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2,63</font></p> </td>
        <td width="10%" valign=bottom style=height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>405,162</font></p> </td>
        <td width="10%" valign=bottom style=height:14.25pt'>
            <p align="center" style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2.73</font></p> </td> </tr>
    <tr style='height:39.0pt'>
        <td width="37%" valign=middle style=' height:39.0pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2><br>
      Shares purchase options available for grant on December 31 </font></p> </td>
        <td width="10%" style='height:39.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2><br>
      105,328</font></p> </td>
        <td width="10%" style='height:39.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='height:39.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2><br>
      105,328</font></p> </td>
        <td width="10%" style='height:39.0pt'>
            <p align="center" style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2><br>
            &nbsp;&nbsp;&nbsp;&nbsp;-<br>
      </font></p> </td>
        <td width="10%" style='height:39.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2><br>
      0</font></p> </td>
        <td width="10%" style='height:39.0pt'>
          <p align="center" style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2><br>
&nbsp;&nbsp;&nbsp;&nbsp;-<br>
        </font></p></td>
    </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1></font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white; padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="33%" valign=top style=background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><A NAME="PAGENUM"><font size=2>48</font></A></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:140.25pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<div TITLE="EE+ Page Break" STYLE="PAGE-BREAK-AFTER: always"><HR noshade align="center" width="100%" size="2">
</DIV>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The following table summarizes information about options to purchase Shares already held by the Company as treasury Shares, or to subscribe to new Shares, at December 31, 2008:</font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Outstanding options</font></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Exercisable options</font></p> </td> </tr>
    <tr style='height:63.75pt'>
        <td width="37%" valign=bottom style=' height:63.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Exercise price (&#128;)</font></p> </td>
        <td width="10%" valign=bottom style=' height:63.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:63.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Options</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:63.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted <br>
      average<br>
      remaining contractual<br>
      life</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:63.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted<br>
            average <br>
            exercise<br>
            price</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(&#128;)</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:63.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Options </font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:63.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted<br>
            average<br>
            exercise<br>
            price</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(&#128;)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.99</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>485,088</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,8</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.99</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>121,292</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.99</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.60</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>162,000</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5.2</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.60</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>162,000</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.60</font></p> </td> </tr>
    <tr style='height:14.25pt'>
        <td width="37%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.08<sup>(1)</sup></font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>52,000</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.8</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.08</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>52,000</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.08</font></p> </td> </tr>
    <tr style='height:14.25pt'>
        <td width="37%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.02<sup>(2)</sup></font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,425</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.5</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.02</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,425</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.02</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.83</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,212</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.0</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.83</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,212</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.83</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="37%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>1.83 to 3.99</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>706,725</font></p> </td>
        <td width="10%" valign=bottom style=height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4.2</font></p> </td>
        <td width="10%" valign=bottom style=height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.51</font></p> </td>
        <td width="10%" valign=bottom style=height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>342,929</font></p> </td>
        <td width="10%" valign=bottom style=height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.00</font></p> </td> </tr></table>
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        <td width="8%" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(1) </font></p> </td>
        <td  valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>All the 52,000 options were granted on September 25, 2001 with an exercise price expressed in U.S. dollars ($1.92) and converted here to euros based on the noon buying rate on September 25, 2001 ($1 = &#128;1.085).</font></p> </td> </tr></table>
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    <tr>
        <td width="8%" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(2) </font></p> </td>
        <td  valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>All the 6,425 options were granted on June 18, 2002 with an exercise price expressed in U.S. dollars ($1.92) and converted here to euros based on the noon buying rate on June 18, 2002 ($1 = &#128;1.0545).</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Item 7. Major Shareholders and Related Party Transactions</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>Major Shareholders</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>To our knowledge, we are not directly or indirectly owned or controlled by another corporation, by any foreign government, or by any other natural or legal person or persons acting severally or jointly. At March 16, 2009, to our knowledge, the following persons had beneficial ownership of more than 5% of the Shares: Siemens France Holding owned 1,003,250 Shares representing 10.03% of the total share capital of the Company and (after subtracting treasury stock, which under French law carries no voting rights) 10.47% of voting rights, Bruce &amp; Co., Inc, owned 742,044 shares representing 7.42% of the total share capital of the Company and (after subtracting treasury stock, which under French law carries no voting rights) 7.74% of voting rights, and Wells Capital Management, Inc. and Wells Fargo, together owned 667,234 Shares representing 6.67% of the total share capital of the Company and
(after subtracting treasury stock, which under French law carries no voting rights) 6.96% of voting rights. The Shares owned by these persons do not carry special voting rights.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>To our knowledge, there have been no significant changes in the percentage of ownership of our Shares over the past three years. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>There are no arrangements known to us, the operation of which may at a later date result in a change of control of the Company.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of March 13 2009, 10,006,333 Shares were issued, including 9,582,593 outstanding and 423,740 treasury Shares. At the same date, there were 9,843,850 ADSs, each representing one Share, all of which were held of record by 15 registered holders in the United States (including The Depository Trust Company). </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>Related Party Transactions</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The General Manager of the Company's Korean branch "EDAP-TMS Korea" is also Chairman of a Korean company named Dae You. EDAP-TMS Korea subcontracts to Dae You the service contract maintenance of our medical devices installed in Korea. The amounts payable under this contract were &#128;61 thousand, &#128;71 thousand and &#128;61 thousand, for 2008, 2007 and 2006 respectively. Dae You also acts as an agent to promote our medical devices in South Korea, and receives commissions on sales. Dae You has purchased medical devices from us, which it operates in partnership with hospitals or clinics. These </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><A NAME="PAGENUM"><font size=2>49</font></A></p> </td>
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            <p style='margin-left:0pt;text-indent:140.25pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>purchases amounted to &#128;539 thousand, &#128;558 thousand and &#128;588 thousand in 2008, 2007 and 2006 respectively. As of December 31, 2008, receivables from Dae You amounted to &#128;384 thousand and our payables to them amounted to &#128;31 thousand. As of December 31, 2007, receivables amounted to &#128;52 thousand and payables to &#128;28 thousand.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We purchase certain technological elements from Siemens AG, an affiliate of our shareholder Siemens France Holding. Total purchases amounted to &#128;212 thousand, &#128;183 thousand in 2007 and &#128;444 thousand in 2006. As of December 31, 2008, payables due to Siemens AG amounted to &#128;10 thousand and as of December 31, 2007, payables amounted to &#128;1 thousand. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>Item 8. Financial Information</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>Consolidated Financial Statements</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>See Item 18, &#145;&#145;Financial Statements.&#146;&#146;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>Export Sales</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2008, total consolidated export net sales, which we define as sales made outside of France, were &#128;17.9 million, which represented 78% of total net sales. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>Legal Proceedings</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of the date of this annual report, the Company is not involved in any material legal proceedings. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2000, a patient made a product liability claim against the Company in the United States, alleging that he was injured in the course of a Prostatron procedure.  In connection with the sale of the Prostatron business in October 2000, the Company agreed to retain liability for this claim.  In February 2008, we reached a settlement for this claim with the cost of $15,000 which was fully covered by our Product Liability Insurance.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>Dividends and Dividend Policy</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The payment and amount of dividends depend on our earnings and financial condition and such other factors that our Board of Directors deems relevant. Dividends are subject to recommendation by the Board of Directors and a vote by the shareholders at the shareholders&#146; ordinary general meeting. Dividends, if any, would be paid in euro and, with respect to ADSs, would be converted at the then-prevailing exchange rate into U.S. dollars. Holders of ADSs will be entitled to receive payments in respect of dividends on the underlying Shares in accordance with the Deposit Agreement.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>In France, dividends are paid out of after-tax income. Dividends paid to holders of Shares who are not residents of France generally will be subject to French withholding tax at a rate of 25%.  Holders who qualify for benefits under an applicable tax treaty and who comply with the procedures for claiming treaty benefits may be entitled to a reduced rate of withholding tax and, in certain circumstances, certain other benefits, under conditions provided for in the relevant treaty under French law. See Item 10, &#145;&#145;Additional Information&#151;French Taxation&#151;Taxation of Dividends on Shares or ADSs&#151;Withholding Tax.&#146;&#146;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>No dividends were paid with respect to fiscal years 2004 through 2008, and we do not anticipate paying any dividends for the foreseeable future. In particular, in connection with the October 2007 private placement, we agreed not to pay cash dividends on any of our equity securities. Thereafter, declaration of dividends on our shares will depend upon, among other things, future earnings, if any, the operating and financial condition of our business, our capital requirements, general business conditions and such other factors as our Board of Directors deems relevant.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>Significant Changes</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Except as otherwise disclosed in this Annual Report, there has been no material change in the financial position of EDAP TMS S.A. and its consolidated subsidiaries since December 31, 2008. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><A NAME="PAGENUM"><font size=2>50</font></A></p> </td>
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            <p style='margin-left:0pt;text-indent:140.25pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'>
<b><font size=2>Item 9. The Offer and Listing</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>Description of Securities</font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>The Shares are traded solely in the form of ADSs, each ADS representing one Share. Each ADS may be evidenced by an American Depositary Receipt issued by The Bank of New York, our Depositary.  The principal United States trading market for the ADSs, which is also the principal trading market for the ADSs overall, is the NASDAQ Global Market of the NASDAQ Stock Market, Inc. (&#145;&#145;NASDAQ&#148;), on which the ADSs are quoted under the symbol &#145;&#145;EDAP.&#146;&#146; The principal non-U.S. trading market for the ADSs was NASDAQ Europe, formerly known as the European Association of Securities Dealers Automated Quotation System (&#145;&#145;EASDAQ&#146;&#146;), on which the ADSs were quoted under the symbol &#145;&#145;EDAP&#146;&#146;. We requested and received a conditional approval from NASDAQ Europe for the delisting of our ADSs effective on April 25, 2002. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>Trading Markets</font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>The following tables set forth, for the years 2004 through 2008, the reported high and low sales prices of the ADSs on NASDAQ. </font></p>
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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>NASDAQ</font></B></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>High</font></b></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Low</font></b></p> </td> </tr>
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        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin:0in;text-indent:0pt;text-align:center;margin-top:5pt;margin-bottom:.0001pt'><b><font size=2>$</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2008</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5.12</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.05</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2007</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9.40</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4.25</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2006 </font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>21.64</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5.12</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2005 </font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5.68</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.10</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2004</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.92</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
  <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.55</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The following tables set forth, for the years 2007 and 2008, the reported high and low sales prices of the ADSs on NASDAQ for each full financial quarter:</font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>NASDAQ</font></B></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>High</font></b></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Low</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><u><b><font size=2>2007:</font></b></u></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin:0in;text-indent:0pt;text-align:center;margin-top:5pt;margin-bottom:.0001pt'><b><font size=2>$</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>First Quarter</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9.40</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5.62</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Second Quarter</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8.85</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5.67</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Third Quarter</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8.00</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4.60</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Fourth Quarter</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6.62</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4.25</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>2008:</font></b></u><u></u></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>First Quarter</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5.12</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.31</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Second Quarter</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4.00</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.74</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Third Quarter</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.46</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.56</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Fourth Quarter</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.24</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
  <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.05</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The following table sets forth, for the most recent six months (from October 2008 through March 20, 2009), the reported high and low sale prices of the ADSs on NASDAQ for each month:</font></p>
<div align=left>
<table width="100%" border="0" cellpadding=0 cellspacing=0 style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="353" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="135" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>NASDAQ</font></B></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="353" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="135" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>High</font></b></p> </td>
        <td width="101" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Low</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="353" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><u><b><font size=2>2008:</font></b></u></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="135" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin:0in;text-indent:0pt;text-align:center;margin-top:5pt;margin-bottom:.0001pt'><b><font size=2>$</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="353" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>October</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="135" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="97" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.24</font></p> </td>
        <td  colspan="2" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.05</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="353" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>November</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="135" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="97" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.19</font></p> </td>
        <td  colspan="2" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.22</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="353" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>December</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="135" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="97" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.57</font></p> </td>
        <td  colspan="2" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.10</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="353" valign=bottom style=' height:12.75pt'>
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:5pt;margin-bottom:.0001pt'><u><b><font size=2>2009:</font></b></u><u></u></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="135" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="97" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="353" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>January</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="135" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="97" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.95</font></p> </td>
        <td  colspan="2" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.37</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="353" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>February</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="135" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="97" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.06</font></p> </td>
        <td  colspan="2" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.40</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="353" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>March (through March 20, 2009)</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="94" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="135" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="97" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.20</font></p> </td>
        <td  colspan="2" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.11</font></p> </td> </tr>
    <tr>
        <td width="353" ></td>

        <td width="94" ></td>

        <td width="94" ></td>

        <td width="94" ></td>

        <td width="135" ></td>

        <td width="97" ></td>

        <td width="4" ></td>

  <td width="101" ></td> </tr> </table>
</div>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1></font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white; padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="33%" valign=top style=background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><A NAME="PAGENUM"><font size=2>51</font></A></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:140.25pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Item 10. Additional Information</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>Memorandum and Articles of Association</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Set forth below is a brief summary of significant provisions of our articles of association (</font><i><font size=2>statuts</font></i><font size=2>) and applicable French laws. This is not a complete description and is qualified in its entirety by reference to our </font><i><font size=2>statuts</font></i><font size=2>. Each time they are modified, we file copies of our articles of association with, and such articles of association are publicly available from, the Registry of Commerce and Companies in Lyon, France, under number 316488204 RCS-LYON.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our corporate affairs are governed by its articles of association and by Book II of the French Commercial Code, as amended. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our articles of association were last updated in January 2009 to act the recent increase in share capital related to the issuance of additional shares in 2008.  </font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><b><font size=2>Corporate Purposes</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Pursuant to Article 2 of the articles of association, the purposes of the Company are:</font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="4%" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:3.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
        <td  valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the taking of financial interests, under whatever form, in all French or foreign groups, companies or businesses which currently exist or which may be created in the future, mainly through contribution, subscription or purchasing of stocks or shares, obligations or other securities, mergers, holding companies, groups, alliances or partnerships;</font></p> </td> </tr></table>
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<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the management of such financial interests;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the direction, management, control and coordination of its subsidiaries and interests;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the provision of all administrative, financial, technical or other services; and</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>generally, all operations of whatever nature, financial, commercial, industrial, civil, relating to property and real estate which may be connected directly or indirectly, in whole or in part, to the Company&#146;s purposes or to any other similar or related purposes which may favor the extension or development of said purposes.</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><b><font size=2>Board of Directors</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Board of Directors is currently composed of four members who were appointed by the shareholders for a period of six years expiring upon the date of the annual general shareholders&#146; meeting approving the financial results for fiscal year 2013 See Item 6, &#145;&#145;Directors, Senior Management and Employees&#146;&#146;. The tenure of a director terminates at the end of the ordinary general shareholders' meeting convened to vote upon the accounts of the then-preceding fiscal year and is held in the year during which the term of such Director comes to an end. Directors may always be re-elected; a director may also be dismissed at any time at the shareholders&#146; meeting.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The mandate for each member of the current Board of Directors expires on the date of the ordinary general shareholders' meeting approving the financial results for the 2013 fiscal year.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Each Director must own at least one share during his/her term of office. If, at the time of his/her appointment, a director does not own the required number of shares or if during his/her term, he/she no longer owns the required number of shares, he/she is considered to have automatically resigned if he/she fails to comply with the shareholding requirement within three months.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>An individual person cannot be on more than five Boards of Directors or Supervisory Boards in companies registered in France; directorships in controlled companies (as defined by Section L.233-16 of the French Commercial Code) by the Company are not taken into account. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In case of the death or resignation of one or more director, the Board of Directors may make provisional appointments to fill vacancies before the next general shareholders meetings. These provisional appointments must be ratified by the next following ordinary shareholders meeting. Even if a provisional appointment is not ratified, resolutions and acts previously approved by the Board of Directors nonetheless remain valid.</font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>When the number of directors falls below the compulsory legal minimum, the remaining directors must convene an ordinary general shareholders&#146; meeting to reach the full complement of the Board of Directors. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Any director appointed in replacement of another director whose tenure has not expired remains in office only for the remaining duration of the tenure of his predecessor. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>One of our employees may be appointed to serve as a director. His/her contract of employment must however entail actual work obligations. In this case, he/she does not lose the benefit of his/her employment contract. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The number of directors who are also linked to the Company by an employment contract cannot exceed one third of the directors then in office and in any case five members. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Directors cannot be more than seventy-five years old. If one of the directors reaches this limit during his/her tenure, such director is automatically considered to have resigned at the next general shareholders meeting. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Board of Directors determines the direction of our business and supervises our operations. Within the limits set out by the corporate purposes and the powers expressly granted by law to the general shareholders&#146; meeting, the Board of Directors may deliberate upon our operations and make any decisions in accordance with our business. However, a director must abstain from voting on matters in which the director has an interest. The resolutions passed in a meeting of the Board of Directors are valid only if a quorum of half of the directors is reached. A Director cannot borrow money from the Company. </font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><b><font size=2>The Chairman of the Board</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Board of Directors must elect one of its members as Chairman of the Board of Directors, who must be an individual person. The Board of Directors determines the duration of the tenure of the Chairman, which cannot exceed that of his/her tenure as a director. The Board of Directors may dismiss the Chairman at any time. The remuneration of the Chairman is decided by the Board of Directors, upon recommendation of the Compensation Committee.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Chairman represents the Board of Directors and organizes its work. The general shareholders&#146; meeting must be informed of this work by the Chairman. The Chairman is responsible for the good functioning of our organization and for supervising the ability of the Board members to perform their mission.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Pursuant to Section 706-43 of the French Criminal Proceedings Code, the Chairman may validly delegate to any person he/she chooses the power to represent us in any criminal proceedings that we may face. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As with any other director, the Chairman cannot be over seventy-five years old. In case the Chairman reaches this limit during his/her tenure, he/she will automatically be considered to have resigned. However, his/her tenure is extended until the next Board of Directors meeting, during which his/her successor will be appointed. Subject to the age limit provision, the Chairman of the Board may also be re-elected. </font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><b><font size=2>The Chief Executive Officer</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We are managed by the Chairman of the Board of Directors or an individual elected by the Board of Directors bearing the title of Chief Executive Officer. The choice between these two methods of management belongs to the Board of Directors and must be made as provided for by our articles of association. On March 31, 2008, the Board of Directors appointed Mr. Marc Oczachowski as Chief Executive Officer. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Chief Executive Officer is vested with the powers to act under all circumstances on behalf of the Company, within the limits set out by the Company&#146;s corporate purposes, and subject to the powers expressly granted by law to the Board of Directors and the general shareholders&#146; meeting.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Chief Executive Officer represents us with respect to third parties. We are bound by any acts of the Chief Executive Officer even if they are contrary to corporate purposes, unless it is proven that the </font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>third party knew such act exceeded the Company&#146;s corporate purposes or could not ignore it in light of the circumstances. Publication of the articles of association alone is not sufficient evidence of such knowledge.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The remuneration of the Chief Executive Officer is set by the Board of Directors, upon recommendation of the Compensation Committee. The Chief Executive Officer can be terminated at any time by the Board of Directors. If such termination is found to be unjustified, damages may be allocated to the Chief Executive Officer, except when the Chief Executive Officer is also the Chairman of the Board.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Chief Executive Officer may not hold another position as Chief Executive Officer or member of a Management Board in a company registered in France except when (a) such company is controlled (as referred to in Section L.233-16 of the French Commercial Code) by the Company and (b) when this controlled company&#146;s shares are not quoted on a regulated market.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Chief Executive Officer cannot be over seventy years old. In case the Chief Executive Officer reaches this limit during his/her office, he/she is automatically considered to have resigned. However, his/her tenure is extended until the next Board of Directors meeting, during which his/her successor must be appointed.</font><i><b><font size=2> </font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Dividend and Liquidation Rights (French Law)</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Net income in each fiscal year, as increased or reduced, as the case may be, by any profit or loss of the Company carried forward from prior years, less any contributions to legal reserves, is available for distribution to our shareholders as dividends, subject to the requirements of French law and our articles of association.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Under French law and our articles of association, we are required to allocate 5% of our net profits in each fiscal year to a legal reserve fund until the amount in such reserve fund is equal to 10% of the nominal amount of the registered capital. The legal reserve is distributable only upon the liquidation of the Company.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our shareholders may, upon recommendation of the Board of Directors, decide to allocate all or a part of distributable profits, if any, among special or general reserves, to carry them forward to the next fiscal year as retained earnings, or to allocate them to the shareholders as dividends.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our articles of association provide that, if so agreed by the shareholders, reserves that are available for distribution under French law and our articles of association may be distributed as dividends, subject to certain limitations.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>If we have made distributable profits since the end of the preceding fiscal year (as shown on an interim income statement certified by our statutory auditors), the Board of Directors has the authority under French law, without the approval of shareholders, to distribute interim dividends to the extent of such distributable profits. We have never paid interim dividends.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Under French law, dividends are distributed to shareholders pro rata according to their respective shareholdings. Dividends are payable to holders of shares outstanding on the date of the annual shareholders' meeting deciding the distribution of dividends, or in the case of interim dividends, on the date of the Board of Directors meeting approving the distribution of interim dividends. However, holders of newly issued shares may have their rights to dividends limited with respect to certain fiscal years. The actual dividend payment date is decided by the shareholders in an ordinary general meeting or by the Board of Directors in the absence of such a decision by the shareholders. The payment of the dividends must occur within nine months from the end of our fiscal year. Under French law, dividends not claimed within five years of the date of payment revert to the French State.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>If the Company is liquidated, our assets remaining after payment of our debts, liquidation expenses and all of our remaining obligations will be distributed first to repay in full the nominal value of the shares, then the surplus, if any, will be distributed pro rata among the shareholders based on the nominal value of their shareholdings and subject to any special rights granted to holders of priority shares, if any.</font></p>
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<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Changes in Share Capital (French Law)</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our share capital may be increased only with the approval of the shareholders entitled to vote at an extraordinary general meeting, following a recommendation of the Board of Directors. Increases in the share capital may be effected either by the issuance of additional shares (including the creation of a new class of shares) or by an increase in the nominal value of existing shares. Additional Shares may be issued for cash or for assets contributed in kind, upon the conversion of debt securities previously issued by the Company, by capitalization of reserves, or, subject to certain conditions, in satisfaction of indebtedness incurred by the Company. Dividends paid in the form of Shares may be distributed in lieu of payment of cash dividends, as described above under &#145;&#145;&#151;Dividend and Liquidation Rights (French law).&#146;&#146; French law permits different classes of shares
to have liquidation, voting and dividend rights different from those of the outstanding ordinary shares.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our share capital may be decreased only with the approval of the shareholders entitled to vote at an extraordinary general meeting. The share capital may be reduced either by decreasing the nominal value of the shares or by reducing the number of outstanding shares. The conditions under which the registered capital may be reduced will vary depending upon whether or not the reduction is attributable to losses incurred by the Company. The number of outstanding shares may be reduced either by an exchange of shares or by the repurchase and cancellation by us of our shares. Under French law, all the shareholders in each class of shares must be treated equally unless the inequality in treatment is accepted by the affected shareholder. If the reduction is not attributable to losses incurred by us, each shareholder will be offered an opportunity to participate in such capital reduction and may
decide whether or not to participate therein.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Repurchase of Shares (French Law)</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Pursuant to French law, the Company may not acquire its own shares except (a) to reduce its share capital under certain circumstances with the approval of the shareholders at an extraordinary general meeting, (b) to provide shares for distribution to employees under a profit sharing or stock option plan and (c) after obtaining approval from the shareholders at an ordinary general meeting, to make purchases for stabilization of quotations on a regulated stock exchange. In either case, the amounts to be repurchased under (b) and (c) may not result in the Company holding more than 10% of its shares then-issued. A subsidiary of the Company is prohibited by French law from holding shares of the Company and, in the event it becomes a shareholder of the Company, such shareholder must transfer all the shares of the Company that it holds. </font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Attendance and Voting at Shareholders&#146; Meetings (French Law)</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In accordance with French law, there are two types of general shareholders&#146; meetings, ordinary and extraordinary. Ordinary general meetings are required for matters such as the election of directors, the appointment of statutory auditors, the approval of the report prepared by the Board of Directors and the annual accounts, the declaration of dividends and the issuance of (non-convertible) bonds.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Extraordinary general meetings are required for approval of matters such as amendments to the Company&#146;s articles of association, modification of shareholders&#146; rights, approval of mergers, increases or decreases in share capital (including a waiver of preferential subscription rights), the creation of a new class of shares, the authorization of the issuance of investment certificates or securities convertible or exchangeable into shares and for the sale or transfer of substantially all of the Company&#146;s assets.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Board of Directors is required to convene an annual ordinary general shareholders meeting, which must be held within six months of the end of our fiscal year, for approval of the annual accounts. Other ordinary or extraordinary meetings may be convened at any time during the year. Shareholders meetings may be convened by the Board of Directors or, if the Board of Directors fails to call such a meeting, by our statutory auditors or by a court-appointed agent. The court may be requested to appoint an agent either by one or more shareholders holding at least 5% of the our registered capital or by an interested party under certain circumstances, or, in case of an urgent matter, by the Work Council (</font><i><font size=2>Comit&#233; d&#146;entreprise</font></i><font size=2>) representing the employees. The notice calling a meeting must state the agenda for such meeting. </font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>French law provides that, at least 15 days before the date set for any general meeting on first notice, and at least six days before the date set for any general meeting on second notice, notice of the meeting must be sent by mail to all holders of properly registered shares who have held such shares for more than one month before the date of the notice. A preliminary written notice (</font><i><font size=2>avis de r&#233;union</font></i><font size=2>) must be sent to each shareholder who has requested to be notified in writing. Under French law, one or several shareholders together holding a specified percentage of shares may propose resolutions to be submitted for approval by the shareholders at the meeting. Upon our request, the Bank of New York will send to holders of ADSs notices of shareholders&#146; meetings and other reports and communications that are made generally available to
shareholders. The Work Council may also require the registration of resolution proposals on the agenda.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>Attendance and exercise of voting rights at ordinary and extraordinary general meetings are subject to certain conditions. Shareholders deciding to exercise their voting rights must have their shares registered in their names in the shareholder registry maintained by or on behalf of the Company before the meeting. An ADS holder must timely and properly return its voting instruction card to the Depositary to exercise the voting rights relating to the shares represented by its ADSs.  The Depositary will use its reasonable efforts to vote the underlying shares in the manner indicated by the ADS holder.  In addition, if an ADS holder does not timely return a voting instruction card or the voting instruction card received is improperly completed or blank, that holder will be deemed to have given the Depositary a proxy to vote, and the Depositary will vote in favor of all proposals recommended
by the Board of Directors and against all proposals that are not recommended by the Board of Directors.  </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>All shareholders who have properly registered their shares have the right to participate in general meetings, either in person, by proxy, or by mail, and to vote according to the number of shares they hold. Each share confers on the shareholder the right to one vote. Under French law, an entity we control directly or indirectly is prohibited from holding shares in the Company and, in the event it becomes a shareholder, such entity would not be entitled to any voting rights. A proxy may be granted by a shareholder whose name is registered on our share registry to his or her spouse, to another shareholder or to a legal representative, in the case of a legal entity, or by sending a proxy in blank to the Company without nominating any representatives. In the latter case, the Chairman of the shareholders&#146; meeting will vote such blank proxy in favor of all resolutions proposed by the Board
of Directors and against all others.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The presence in person or by proxy of shareholders having not less than 20% (in the case of an ordinary general meeting or an extraordinary general meeting deciding upon any capital increase by capitalization of reserves) or 25% (in the case of an extraordinary general meeting) of the Shares entitled to vote is necessary to reach a quorum. If a quorum is not reached at any meeting, the meeting is adjourned. Upon recommencement of an adjourned meeting, there is no quorum requirement in the case of an ordinary general meeting or an extraordinary general meeting deciding upon any capital increase by capitalization of reserves. The presence in person or by proxy of shareholders having not less than 20% of the Shares is necessary to reach a quorum in the case of any other type of extraordinary general meeting.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>At an ordinary general meeting or an extraordinary general meeting deciding upon any capital increase by capitalization of reserves, a simple majority of the votes of the shareholders present or represented by proxy is required to approve a resolution. At any other extraordinary general meeting, a two-thirds majority of the votes cast is required. However, a unanimous vote is required to increase liabilities of shareholders. Abstention from voting by those present or represented by proxy is viewed as a vote against the resolution submitted to a vote.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In addition to his/her rights to certain information regarding the Company, any shareholder may, during the two-week period preceding a shareholders&#146; meeting, submit to the Board of Directors written questions relating to the agenda for the meeting. The Board of Directors is required to respond to such questions during the meeting.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Under French law, shareholders can nominate individuals for election to the Board of Directors at a shareholders&#146; meeting. When the nomination is part of the agenda of the shareholders&#146; meeting, the nomination must contain the name, age, professional references and professional activity of the nominee for the past five years, as well as the number of shares owned by such candidate, if any. In addition, if the agenda for the shareholders&#146; meeting includes the election of members of the Board of Directors, any </font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>shareholder may require, during the meeting, the nomination of a candidate for election at the Board of Directors at the shareholders&#146; meeting, even if such shareholder has not followed the nomination procedures. Under French law, shareholders cannot elect a new member of the Board of Directors at a general shareholders meeting if the agenda for the meeting does not include the election of a member of the Board of Directors, unless such nomination is necessary to fill a vacancy due to the previous resignation of a member.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As set forth in our articles of association, shareholders&#146; meetings are held at our registered office of the Company or at any other locations specified in the written notice. We do not have staggered or cumulative voting arrangements for the election of Directors.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Preferential Subscription Rights (French Law)</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Shareholders have preferential rights to subscribe for additional shares issued by the Company for cash on a pro rata basis (or any equity securities of the Company or other securities giving a right, directly or indirectly, to equity securities issued by the Company). Shareholders may waive their preferential rights, either individually or at an extraordinary general meeting under certain circumstances. Preferential subscription rights, if not previously waived, are transferable during the subscription period relating to a particular offering of shares. U.S. holders of ADSs may not be able to exercise preferential rights for Shares underlying their ADSs unless a registration statement under the Securities Act is effective with respect to such rights or an exemption from the registration requirement thereunder is available.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Form and Holding of Shares (French Law)</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><font size=2>Form of Shares</font></i></p>
<p style=' margin-bottom:0pt; margin-top:3pt; margin-left:8.33%;text-align:justify;'><font size=2>Our articles of association provide that shares can only be held in registered form. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><font size=2>Holding of Shares </font></i></p>
<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>The shares are registered in the name of the respective owners thereof in the registry maintained by or on behalf of the Company. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Stock certificates evidencing shares, in a manner comparable to that in the United States, are not issued by French companies, but we may issue or cause to be issued confirmations of shareholdings registered in such registry to the persons in whose names the shares are registered. Such confirmations do not constitute documents of title and are not negotiable instruments.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Ownership of ADSs or Shares by Non-French Residents (French Law) </font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Under French law, there is no limitation on the right of non-French residents or non-French security holders to own, or where applicable, vote securities of a French company. A non-resident of France must file a </font><i><font size=2>d&#233;claration administrative</font></i><font size=2>, or administrative notice, with French authorities in connection with the acquisition of a controlling interest in any French company. Under existing administrative rulings, ownership, by a non-resident of France or a French corporation which is itself controlled by a foreign national, of 33.33% or more of a company&#146;s share capital or voting rights is regarded as a controlling interest, but a lower percentage may be held to be a controlling interest in certain circumstances (depending upon such factors as the acquiring party&#146;s intentions, its ability to elect directors or financial reliance by
the French company on the acquiring party).</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Certain Exemptions (French Law)</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Under the U.S. securities laws, as a foreign private issuer, we are exempt from certain rules that apply to domestic U.S. issuers with equity securities registered under the U.S. Securities Exchange Act of 1934, including the proxy solicitation rules and the rules requiring disclosure of share ownership by directors, officers and certain shareholders. We are also exempt from certain of the current NASDAQ corporate governance requirements. For more information on these exemptions, see Item 16 G &#150; &#145;&#145;Corporate Governance &#151;Exemptions from Certain NASDAQ Corporate Governance Rules.&#146;&#146;</font></p>
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<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Enforceability of Civil Liabilities (French Law)</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We are a </font><i><font size=2>soci&#233;t&#233; anonyme</font></i><font size=2>, or limited liability corporation, organized under the laws of the Republic of France. The majority of our directors and executive officers reside in the Republic of France. All or a substantial portion of our assets and the assets of such persons are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce, either inside or outside the United States, judgments against such persons obtained in U.S. courts or to enforce in U.S. court judgments obtained against such persons in courts in jurisdictions outside the United States, in each case, in any action predicated upon the civil liability provisions of the federal securities laws of the United States. In an original action brought in France
predicated solely upon the U.S. federal securities laws, French courts may not have the requisite jurisdiction to grant the remedies sought, and actions for enforcement in France of judgments of U.S. courts rendered against French persons referred to in the second sentence of this paragraph would require such French persons to waive their right under Article 15 of the French Civil Code to be sued in France only. We believe that no such French persons have waived such right with respect to actions predicated solely upon U.S. federal securities laws. In addition, actions in the United States under the U.S. federal securities laws could be affected under certain circumstances by the French law of July 16, 1980, which may preclude or restrict obtaining evidence in France or from French persons in connection with such actions. </font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Material Contracts</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On August 3, 2006, we closed a private placement of 961,676 ordinary shares in the form of ADSs, resulting in net proceeds of approximately $7.5 million.  The Securities Purchase Agreement among EDAP TMS S.A. and each purchaser set forth the purchase price for the ordinary shares.  The terms for registering the ADSs with the SEC are covered by the Registration Rights Agreement. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On October 31, 2007, we completed the private placement of $20 million principal amount of 9% Senior Convertible Debentures due 2012. In addition, the purchasers of the convertible debentures and the Placement Agent received warrants to purchase our ordinary shares, which expire in 2013. The October 2007 private placement resulted in net proceeds of approximately $17.4 million. The Securities Purchase Agreement, dated as of October 29, 2007, among EDAP TMS S.A. and each purchaser was furnished to the SEC on Form 6-K dated October 31, 2007, and incorporated by reference in our Form F-3 registration statement filed with the SEC on November 30, 2007. The terms for registering the underlying ADSs with the SEC are included in the Registration Rights Agreement, dated as of October 29, 2007, among EDAP TMS S.A. and the investors signatory thereto, which was furnished to the SEC on Form 6-K dated
October 31, 2007 and incorporated by reference in our Form F-3 filed with the SEC on November 30, 2007. </font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Exchange Controls</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Under current French foreign exchange control regulations, there are no limitations on the amount of cash payments that we may remit to residents of foreign countries. Laws and regulations concerning foreign exchange controls do require, however, that all payments or transfers of funds made by a French resident to a non-resident be handled by an accredited intermediary. All registered banks and credit institutions in France are accredited intermediaries. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Under French law, there is no limitation on the right of non-French residents or non-French security holders to own, or where applicable, vote securities of a French company. A non-resident of France must file a </font><i><font size=2>d&#233;claration administrative</font></i><font size=2>, or administrative notice, with French authorities in connection with the acquisition of a controlling interest in any French company. Under existing administrative rulings, ownership by a non-resident of France or a French corporation which is itself controlled by a foreign national, of 20% or more of a listed company&#146;s share capital or voting rights is regarded as a controlling interest, but a lower percentage may be held to be a controlling interest in certain circumstances (depending upon such factors as the acquiring party&#146;s intentions, its ability to elect directors or financial reliance
by the French company on the acquiring party).</font></p>
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>French Taxation</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The following generally summarizes the material French tax consequences of purchasing, owning and disposing of Shares or ADSs. The statements relating to French tax laws set forth below are based on the laws in force as of the date hereof, and are subject to any future changes in applicable laws and tax treaties.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>This discussion is intended only as a descriptive summary and does not purport to be a complete analysis or listing of all potential tax effects of the purchase, ownership or disposition of Shares or ADSs. It does not constitute legal or tax advice. The following summary does not address the treatment of Shares or ADSs that are held by a resident of France (except for purposes of describing related tax consequences for other holders) or in connection with a permanent establishment or fixed base through which a holder carries on business or performs personal services in France, or by a person that owns, directly or indirectly, 5% or more of the stock of the Company. Moreover, the following discussion of the tax treatment of dividends only deals with distributions made on or after January 1, 2006.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>There are currently no procedures available for holders that are not U.S. residents to claim tax treaty benefits in respect of dividends received on ADSs or Shares registered in the name of a nominee. Such holders should consult their own tax advisor about the consequences of owning and disposing of ADSs or Shares.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Investors should consult their own tax advisors regarding the tax consequences of the purchase, ownership and disposition of shares in light of their particular circumstances.</font></p>
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<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Taxation of Dividends on Shares or ADSs - Withholding Tax</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In France, dividends are paid out of after-tax income. Dividends paid by a French corporation, such as EDAP, to non-residents normally are subject to a 25% French withholding tax (reduced to 18% since January 1, 2008 when non-residents are individuals resident from one of the countries of the European Economic Area, except Liechtenstein. However, non-resident holders that are entitled to and comply with the procedures for claiming benefits under an applicable tax treaty may be subject to a reduced rate (generally 15%) of French withholding tax. If a non-resident holder establishes its entitlement to treaty benefits prior to the payment of a dividend, then French tax generally will be withheld at the reduced rate provided under the treaty. </font></p>
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<p style=' margin-bottom:9pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Taxation of dividends</font></b></i></p>
<p style=' margin-bottom:9pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>Dividends received by French resident individuals are either included in their total income and subject to the progressive income tax, or they can alternatively be subject to an 18% levy source at the option of the beneficiary.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>When no option is exercised by the French resident individuals, they are only taxed on 60% of the dividends they receive and, in addition to a second fixed annual allowance of &#128;3,050 for couples subject to joint taxation and &#128;1,525 for single persons, widows or divorced persons</font><b><font size=2>,</font></b><font size=2> are entitled to a tax credit equal to 50% of all dividends received within one year (the "Tax Credit"). The Tax Credit is capped for all dividends received within one year at &#128;230 for married couples and members of a civil union agreement subject to joint taxation and &#128;115 for single persons, widows or widowers, divorcees or married persons subject to separate taxation. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>As a result of the French Finance Act for 2008, French resident individuals can elect to have all or part of the dividends received subject to an 18% levy at source at the irrevocable option of the shareholder exercised no later than at the time of the payment if it occurs in France.  If the option is exercised only for a portion of the dividends received during the year (whether they are distributed by EDAP or any other company), the remaining dividends subject to the progressive income tax lose the benefit of the aforementioned allowances and the Tax Credit.  Holders of Shares are invited to contact their financial or tax advisor to be informed of the consequences of such option on their tax situation and the terms and conditions of exercising the option and the payment of the levy at source as well as the reporting obligations related to such option when the paying agent is not located in France.</font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Dividends paid to non-residents are not normally eligible for the Tax Credit described above. However, qualifying non-resident individuals who were previously entitled to a refund of the </font><i><font size=2>avoir fiscal</font></i><font size=2> may benefit, under the same conditions as for the </font><i><font size=2>avoir fiscal</font></i><font size=2>, from a refund of the Tax Credit (net of applicable withholding tax) under certain conditions, subject to compliance with the procedures for claiming benefits under the applicable treaty. The French tax authorities have not yet issued any guidance with regard to the procedures for claiming the refund of the Tax Credit to non-resident individuals. </font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>Individual investors are urged to consult their own tax advisors in this respect. </font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Subject to the more favorable provisions of a relevant tax treaty, holders that are not residents of France for tax purposes, do not hold Shares or ADSs in connection with the conduct of a business or profession in France, and have not held more than 25% of dividend rights (</font><i><font size=2>droits aux b&#233;n&#233;fices sociaux</font></i><font size=2>) of the Company, directly or indirectly, alone or together with their spouse, ascendants or descendants,</font><b><font size=2> </font></b><font size=2>at any time during the preceding five years, are not subject to French income tax or capital gains tax on the sale or disposition of Shares or ADSs. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font SIZE=2>A 3% </font><i><font size=2>ad valorem</font></i><font size=2> registration duty (subject to a maximum of &#128;5,000 per transfer) applies to certain transfers of shares in French companies. This duty does not apply to transfers of shares in listed companies that are not evidenced by a written agreement, or if any such agreement is executed outside France.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><font size=2>Estate and Gift Tax</font></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>France imposes estate and gift tax on shares or ADSs of a French corporation that are acquired by inheritance or gift. The tax applies without regard to the tax residence of the transferor. However, France has entered into estate and gift tax treaties with a number of countries pursuant to which, assuming certain conditions are met, residents of the treaty country may be exempted from such tax or obtain a tax credit.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><font size=2>Wealth Tax</font></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Individuals who are not residents of France for purposes of French taxation are not subject to a wealth tax (</font><i><font size=2>Imp&#244;t de Solidarit&#233; sur la Fortune</font></i><font size=2>) in France as a result of owning an interest in the share capital of a French corporation, provided that such ownership interest is, directly or indirectly, less than 10% of the corporation&#146;s share capital and does not enable the shareholder to exercise influence over the corporation. Double taxation treaties may provide for a more favorable tax treatment.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Taxation of U.S. Investors</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The following is a summary of the material French and U.S. federal income tax consequences of the purchase, ownership and disposition of Shares or ADSs by a holder that is a resident of the United States for purposes of the Convention Between the Government of the United States of America and the Government of the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital of August 31, 1994 (the &#147;Treaty&#148;), which entered into force on December 30, 1995 (as amended by any subsequent protocols), and the tax regulations issued by the French tax authorities, and are fully eligible for benefits under the Treaty (a &#145;&#145;U.S. holder&#146;&#146;). </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In particular, the United States and France signed a protocol on January 13, 2009, that, upon ratification, will make several significant changes to the Treaty, including changes to the &#147;Limitation of Benefits&#148; provision. The provisions of the protocol will be effective as soon as the ratification occurs in both jurisdictions and with respect to withholding taxes will be effective for amounts paid or accrued on or after the first day of the year in which the protocol enters into force. US holders are advised to consult their own tax advisors regarding the effect the protocol may have on their eligibility for Treaty benefits in light of their own particular circumstances.</font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>A holder generally will be entitled to Treaty benefits in respect of Shares or ADSs if he is concurrently:</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the beneficial owner of the shares or ADSs (and the dividends paid with respect thereto);</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>an individual resident of the United States, a U.S. corporation, or a partnership, estate or trust to the extent its income is subject to taxation in the United States in its hands or in the hands of its partners or beneficiaries;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>not also a resident of France for French tax purposes; and</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>not subject to an anti-treaty shopping article that applies in limited circumstances.</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>Special rules apply to pension funds and certain other tax-exempt investors.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>If a partnership holds Shares of ADSs, the tax treatment of a partner generally will depend on the status of the partner and the activities of the partnership. If a US Holder is a partner in a partnership that holds Shares or ADSs, the holder is urged to consult its own tax advisor regarding the specific tax consequences of owning and disposing of its Shares and ADSs.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>For U.S. federal income tax purposes, a U.S. holder&#146;s ownership of the Company&#146;s ADSs will be treated as ownership of the Company&#146;s underlying shares.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>This summary does not purport to be a comprehensive description of all of the tax considerations that may be relevant to any particular investor, and does not discuss tax considerations that arise from rules of general application or that are generally assumed to be known by investors. In particular, the summary does not deal with Shares or ADSs that are not held as capital assets, and does not address the tax treatment of holders that are subject to special rules, such as banks, insurance companies, dealers in securities or currencies, regulated investment companies, persons that elect mark-to-market treatment, persons holding Shares or ADSs as a position in a synthetic security, straddle or conversion transaction, persons that own, directly or indirectly, 5% or more of the Company&#146;s voting stock or 10% or more of the Company&#146;s outstanding capital and persons whose functional
currency is not the U.S. dollar. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>This summary does not discuss the treatment of shares or ADSs that are held in connection with a permanent establishment or fixed base through which a holder carries on business or performs personal services in France. Moreover, the following discussion of the tax treatment of dividends only deals with distributions made on or after January 1, 2006.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The summary is based on laws, treaties, regulatory interpretations and judicial decisions in effect on the date hereof, all of which are subject to change. Such changes could apply retroactively and could affect the consequences described below.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Holders should consult their own tax advisors regarding the tax consequences of the purchase, ownership and disposition of Shares or ADSs in the light of their particular circumstances, including the effect of any state, local, or other national laws.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Dividends</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Generally, dividend distributions to non-residents of France are subject to French withholding tax at a 25% rate. However, under the Treaty, the rate of French withholding tax on dividends paid to a U.S. holder is reduced to 15% and a US holder may claim a refund from the French tax authorities of the amount withheld in excess of the Treaty rate of 15%, if any. For U.S. holders that are not individuals, the requirements for eligibility for Treaty benefits, including the reduced 15% withholding tax rate, contained in the &#147;Limitation on Benefits&#148; provision of the Treaty are complicated, and there are certain technical changes being made to these requirements by the new protocol. U.S. holders are advised to consult their own tax advisors regarding their eligibility for Treaty benefits, and whether the new protocol to the Treaty may affect their eligibility, in light of their own
particular circumstances.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.83%;text-align:justify;'><font size=2>French withholding tax will be withheld at the 15% Treaty rate if a U.S. holder has established before the date of payment that the holder is a resident of the United States under the Treaty by following the simplified procedure described below.</font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In addition, individual U.S. holders may be entitled to a refund of the Tax Credit, less a 15% withholding, provided that (i) they are subject to U.S. federal income tax on the Tax Credit and the dividend to which it relates, and (ii) they are the effective beneficiaries of such dividend. The French tax authorities have not yet issued guidance with respect to the procedures for claiming the refund of the Tax Credit to non-resident individuals. However, it should be noted that when the new protocol to the Treaty enters into force, the Treaty will no longer specifically provide for any entitlement to a refund of the Tax Credit, and individual U.S. holders should not continue to benefit from such a refund.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The gross amount of dividends and Tax Credit that a U.S. holder receives (before the deduction of French withholding tax) generally will be subject to U.S. federal income taxation as ordinary dividend income to the extent paid or deemed paid out of the current or accumulated earnings and profits of the Company (as determined under U.S. federal income tax principles). Such dividends will not be eligible for the dividends received deduction generally allowed to U.S. corporations. To the extent that an amount received by a U.S. holder exceeds the allocable share of current and accumulated earnings and profits of the Company, such excess will be applied first to reduce such U.S. holder&#146;s tax basis in its Shares or ADSs and then, to the extent it exceeds the U.S. holder&#146;s tax basis, it will constitute capital gain from a deemed sale or exchange of such Shares or ADSs.  As the Company
does not maintain &#147;earnings and profits&#148; computations, holders should assume that all distributions constitute dividends.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Subject to certain exceptions for short-term and hedged positions, the U.S. dollar amount of dividends received by an individual before January 1, 2011 with respect to the Shares or ADSs will be subject to taxation at a maximum rate of 15% if the dividends are &#147;qualified dividends.&#148;  Dividends paid on the Shares or ADSs will be treated as qualified dividends if (i) the issuer is eligible for the benefits of a comprehensive income tax treaty with the United States that the IRS has approved for the purposes of the qualified dividend rules and (ii) the Company was not, in the year prior to the year in which the dividend was paid, and is not, in the year in which the dividend is paid, a passive foreign investment company (&#147;PFIC&#148;).  The Treaty has been approved for the purposes of the qualified dividend rules.  Based on the Company&#146;s audited financial statements and
relevant market and shareholder data, we believe that the Company was not treated as a PFIC for U.S. federal income tax purposes with respect to its 2008 taxable year.  In addition, based on the Company&#146;s audited financial statements and our current expectations regarding the value and nature of its assets, the sources and nature of its income, and relevant market and shareholder data, we do not anticipate it becoming a PFIC for the 2009 taxable year.  Accordingly, dividends paid by us in 2009 to a U.S. holder should constitute &#147;qualified dividends&#148; unless such holder acquired its Shares or ADSs during a year in which the Company was a PFIC and such holder did not make a mark-to-market election (as described under &#147;&#151;Passive Foreign Investment Company Rules&#148; below).</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Holders of ADSs and Shares should consult their own tax advisers regarding the availability of the reduced dividend tax rate in light of their own particular circumstances.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Dividends distributed with respect to the Shares or ADSs generally will be treated as dividend income from sources outside of the United States, and generally will be treated as &#147;passive category&#148; (or, in the case of certain U.S. holders, &#147;general category&#148;) income for U.S. foreign tax credit purposes.  Subject to certain limitations, French income tax withheld in connection with any distribution with respect to the Shares or ADSs may be claimed as a credit against the U.S. federal income tax liability of a U.S. holder if such U.S. holder elects for that year to credit all foreign income taxes. Alternatively, such French withholding tax may be taken as a deduction against taxable income. Foreign tax credits will not be allowed for withholding taxes imposed in respect of certain short-term or hedged positions in securities and may not be allowed in respect of certain
arrangements in which a U.S. holder&#146;s expected economic profit is insubstantial.  U.S. holders should consult their own tax advisors concerning the implications of these rules in light of their particular circumstances.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Dividends paid in euro will be included in the income of a U.S. holder in a U.S. dollar amount calculated by reference to the exchange rate in effect on the date of receipt by the holder (or, in the case of the ADSs, by the Depositary), regardless of whether the payment is in fact converted into U.S. dollars. If such a dividend is converted into U.S. dollars on the date of receipt, a U.S. holder generally should not be required to recognize foreign currency gain or loss in respect of the dividend income.</font></p>
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<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Procedures for Claiming Treaty Benefits</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The French tax authorities issued guidelines in Instruction n&deg; 4-J-1-05, dated February 25, 2005 that significantly changed the formalities to be complied with by non-resident shareholders, including U.S. holders, in order to obtain the reduced withholding tax rate on distributions made on or after January 1, 2005.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Pursuant to these guidelines, U.S. holders can either claim Treaty benefits under a simplified procedure or under the normal procedure. The procedure to be followed depends on whether the application for Treaty benefits is filed before or after the dividend payment. </font></p>
<p style=' margin-bottom:12pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Under the simplified procedure, in order to benefit from the lower rate of withholding tax applicable under the Treaty before the payment of the dividend, a U.S. holder must complete and deliver to the paying agent (through its account holder) a treaty form (Form 5000), to certify in particular that:</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the U.S. holder is beneficially entitled to the dividend;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the U.S. holder is a U.S. resident within the meaning of the Treaty;</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the dividend is not derived from a permanent establishment or a fixed base that the U.S. holder has in France; and</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the dividend received is or will be reported to the tax authorities in the United States.</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>For partnerships or trusts, claims for Treaty benefits and related attestations are made by the partners, beneficiaries or grantors who also have to supply certain additional documentation. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In order to be eligible for Treaty benefits, pension funds and certain other tax-exempt U.S. holders must comply with the simplified procedure described above, though they may be required to supply additional documentation evidencing their entitlement to those benefits. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>If Form 5000 is not filed prior to the dividend payment, a withholding tax will be levied at the 25% rate, and a holder would have to claim a refund for the excess under the normal procedure by filing both Form 5000 and Form 5001 no later than December 31 of the second calendar year following the year in which the dividend is paid.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Pension funds and certain other tax-exempt entities are subject to the same general filing requirements as other U.S. holders except that they may have to supply additional documentation evidencing their entitlement to these benefits.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Copies of Form 5000 and Form 5001 may be downloaded from the French tax authorities&#146; website (</font><u><font size=2>www.impots.gouv.fr</font></u><font size=2>) and are also available from the U.S. Internal Revenue Service and from the </font><i><font size=2>Centre des Imp&#244;ts des Non-R&#233;sidents</font></i><font size=2> in France (10 rue du Centre 93160, Noisy-le-Grand).</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Finally, as mentioned above, the French tax authorities have not yet issued any guidance with respect to the procedures for claiming the refund of the Tax Credit to non-resident individuals. However, it should be noted that when the new protocol to the Treaty enters into force, the Treaty will no longer specifically provide for any entitlement to a refund of the Tax Credit, and individual U.S. holders should not continue to benefit from such a refund.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Capital Gains</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Under the Treaty, a U.S. holder will not be subject to French tax on any gain derived from the sale or exchange of Shares or ADSs, unless the gain is effectively connected with a permanent establishment or fixed base maintained by the holder in France.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>For U.S. federal income tax purposes, gain or loss realized by a U.S. holder on the sale or other disposition of Shares or ADSs will be capital gain or loss, and will be long-term capital gain or loss if the Shares or ADSs were held for more than one year. The net amount of long-term capital gain recognized by an individual U.S. holder before January 1, 2011 generally is subject to taxation at a maximum rate of 15%. U.S. holders&#146; ability to offset capital losses against ordinary income is limited.</font></p>
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<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Passive Foreign Investment Company Rules </font></b></i><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Unfavorable U.S. tax rules (the </font><font size=2>&#147;</font><font size=2>PFIC rules&#148;) apply to companies that are considered passive foreign investment companies (&#147;PFICs&#148;). The Company will be classified as a PFIC in a particular taxable year if either (a) 75% or more of its gross income is treated as passive income for purposes of the PFIC rules; or (b) the average percentage of the value of its assets that produce or are held for the production of passive income is at least 50%.</font></p>
<p style=' margin-bottom:6pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As explained above, the Company believes that it was not a PFIC for U.S. tax purposes with respect to the year 2008, and also does not anticipate becoming a PFIC with respect to the year 2009. However, as discussed in Forms 20-f filed by the Company with respect to certain prior years the Company believes that it was a PFIC in the past.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>U.S. holders that held Shares or ADSs at any time during the years when the Company was a PFIC and did not make certain U.S. tax elections (a "mark-to-market election" or a "QEF election") will be subject to adverse tax treatment.  For instance, such holders will be subject to a special tax at ordinary income tax rates on certain dividends that the Company pays and on gains realized on the sale of Shares or ADSs (&#145;excess distributions&#146;) in all subsequent years, even though the Company ceased to qualify as a PFIC. The amount of this tax will be increased by an interest charge to compensate for tax deferral, calculated as if the excess distributions had been earned ratably over the period the U.S. holder held its Shares or ADSs.  It may be possible, in certain circumstances, for a holder to avoid the application of the PFIC rules by making a "deemed sale" election for its taxable
year that includes the last day of the Company&#146;s last taxable year during which it qualified as a PFIC.  The PFIC rules are extremely complex, and holders should consult their own tax advisers regarding the possible application of the PFIC rules to their Shares or ADSs and the desirability and availability of a "deemed sale election &#148;.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>French Estate and Gift Tax</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Under the estate and gift tax convention between the United States and France, a transfer of Shares or ADSs by gift or by reason of the death of a U.S. holder entitled to benefits under that convention will not be subject to French gift or inheritance tax, so long as the donor or decedent was not domiciled in France at the time of the transfer, and Shares or ADSs were not used or held for use in the conduct of a business or profession through a permanent establishment or fixed base in France.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>French Wealth Tax</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The French wealth tax does not generally apply to Shares or ADSs of a U.S. holder if the holder is a resident of the United States for purposes of the Treaty.</font></p>
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>U.S. Information Reporting and Backup Withholding Rules</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries are subject to information reporting and may be subject to backup withholding unless the holder (i) is a corporation or other exempt recipient or (ii) provides a taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred. Holders that are not U.S. persons generally are not subject to information reporting or backup withholding. However, such a holder may be required to provide a certification of its non- U.S. status in connection with payments received within the United States or through a U.S.-related financial intermediary.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Documents on Display</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended. In accordance with these requirements, we file reports and other information with the Securities and Exchange Commission (&#147;SEC&#148;). These materials, including this annual report and the exhibits hereto, </font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>may be inspected and copied at the SEC&#146;s public reference room at 100F Street, N.E., Washington, D.C. 20549 and at the SEC&#146;s regional offices at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and 233 Broadway, New York, New York 10279. Copies of the materials may be obtained from the public reference room of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The public may obtain information on the operation of the SEC&#146;s Public Reference Room by calling the SEC in the United States at +1 800 SEC 0330.</font></p>
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Item 11. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Quantitative and Qualitative Disclosures about Market Risk</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We are exposed to market risk from changes in both foreign currency exchange rates and interest rates. We do not hold or issue derivative or other financial instruments for trading purposes. As of December 31, 2008, we had no outstanding foreign exchange sale contracts.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Exchange Rate Risk</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Revenues and Expenses in Foreign Currencies</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We are exposed to foreign currency exchange rate risk because a significant portion of our costs are denominated in currencies other than those in which we earn revenues. In 2008, approximately 66% of our total operating expenses were denominated in euro. During the same period, approximately 75% of our sales were denominated in euro, the rest being denominated primarily in U.S. dollars and Japanese yen.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>A uniform 10% strengthening in the value of the euro as of December 31, 2008 relative to the U.S. dollar and the Japanese yen would have resulted in an increase in income before taxes and minority interests of approximately &#128;384,000 for the year ended December 31, 2008, compared to a increase of approximately &#128;118,000 for the year ended December 31, 2007. This calculation assumes that the U.S. dollar and Japanese yen exchange rates would have changed in the same direction relative to the euro. In addition to the direct effect of changes in exchange rates quantified above, changes in exchange rates also affect the volume of sales. </font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We regularly assess the exposure of our receivables to fluctuations in the exchange rates of the principal foreign currencies in which our sales are denominated (in particular, the U.S. dollar and the Japanese yen) and, from time to time, hedge such exposure by entering into forward sale contracts for the amounts denominated in such currencies that we expect to receive from our local subsidiaries. As of December 31, 2008 we had no outstanding hedging instruments.</font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>Financial Instruments and Indebtedness </font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Over the past three years, we also had exchange rate exposures with respect to indebtedness and assets denominated in Japanese yen and U.S. dollars. Approximately &#128;0.231 million and &#128;0.05 million of our outstanding indebtedness at December 31, 2008 and 2006, respectively, were denominated in Japanese yen. At December 31, 2007, we had no outstanding indebtedness denominated in Japanese yen. Approximately &#128;9.3 million and &#128;15.3 million of our outstanding indebtedness at December 31, 2008 and 2007, respectively, were denominated in U.S. dollars. None of our outstanding indebtedness was denominated in U.S. dollars at December 31, 2006.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.83%;text-align:justify;'><font size=2>In addition, we had approximately &#128;9.6 million, &#128;11.4 million and &#128;0.4 million of cash denominated in U.S. dollars at December 31, 2008, 2007 and 2006, respectively, and &#128;0.5 million, &#128;1.0 million and &#128;1.2 million of cash denominated in Japanese yen at December 31, 2008, 2007 and 2006, respectively. </font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Item 12. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Description of Securities Other than Equity Securities</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2> Not applicable. </font></p>
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<B><font SIZE=2>PART II</font></B></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Item 13.  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defaults, Dividend Arrearages and Delinquencies</font></b></p>
<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>Not applicable</font><b><font size=2>.</font></b><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Item 14.  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Material Modifications to the Rights of Security Holders and Use of Proceeds</font></b></p>
<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>Not applicable</font><b><font size=2>.</font></b></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Item 15.  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Controls and Procedures</font></b></p>
<p style=' margin-bottom:5pt; margin-top:5pt;text-align:left;'><i><b><font face="Times New Roman, Times, serif" size=2>Disclosure Controls and Procedures</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font face="Times New Roman, Times, serif" size=2>Under the supervision and with the participation of the Company&#146;s management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of its disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;)), as of December 31, 2008. Based on this evaluation, the Company&#146;s Chief Executive Officer and Chief Financial Officer concluded that the Company&#146;s disclosure controls and procedures were effective as of such date. The Company&#146;s disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC&#146;s


rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely discussions regarding required disclosure. </font></p>

<p style=' margin-bottom:5pt; margin-top:5pt;text-align:left;'><font face="Times New Roman, Times, serif"><i><b><font size=2>Management&#146;s Report on Internal Control Over Financial Reporting</font></b></i></font></p>
<p style=' margin-bottom:5pt; margin-top:5pt; text-indent:8.49%;text-align:justify;'><font face="Times New Roman, Times, serif" size=2>Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.</font></p>
<p style=' margin-bottom:5pt; margin-top:5pt; text-indent:8.49%;text-align:justify;'><font face="Times New Roman, Times, serif" size=2>The Company&#146;s internal controls over financial reporting include those policies and procedures</font> <font face="Times New Roman, Times, serif" size=2>that:</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Times New Roman, Times, serif" size=2>Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;</font></p> </td> </tr></table>

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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1 face="Times New Roman, Times, serif">&nbsp;</font><font size=4 face="Times New Roman, Times, serif"><b>&#149;</b></font></p>            </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Times New Roman, Times, serif" size=2>Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company&#146;s management and directors; and</font></p> </td> </tr></table>

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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1 face="Times New Roman, Times, serif">&nbsp;</font><font size=4 face="Times New Roman, Times, serif"><b>&#149;</b></font></p>            </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font face="Times New Roman, Times, serif" size=2>Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company&#146;s assets that could have a material effect on the financial statements.</font></p> </td> </tr></table>
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<p style=' margin-bottom:5pt; margin-top:5pt; text-indent:8.66%;text-align:justify;'><font face="Times New Roman, Times, serif" size=2>Because of inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.</font></p>
<p style=' margin-bottom:5pt; margin-top:5pt; text-indent:9.16%;text-align:justify;'><font face="Times New Roman, Times, serif" size=2>Management assessed the effectiveness of internal control over financial reporting as of December 31, 2008 based upon the framework as set forth by the Committee of &nbsp;Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on the </font></p>
<p style=' margin-bottom:5pt; margin-top:5pt;text-align:justify;'><font face="Times New Roman, Times, serif" size=2>&nbsp;</font></p>
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<p style=' margin-bottom:5pt; margin-top:5pt;text-align:justify;'><font face="Times New Roman, Times, serif" size=2>Management&#146;s assessment, management concluded that the Company&#146;s internal control over financial reporting was effective as of December 31, 2008. </font></p>
<p style=' margin-bottom:5pt; margin-top:5pt; text-indent:8.66%;text-align:justify;'><font face="Times New Roman, Times, serif" size=2>This annual report does not include the attestation report of the Company&#146;s registered public accounting firm regarding internal control over financial reporting.  Management&#146;s report was not subject to attestation by the Company&#146;s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management&#146;s report in this annual report.</font></p>
<p style=' margin-bottom:5pt; margin-top:5pt;text-align:justify;'><i><b><font face="Times New Roman, Times, serif" size=2>Change in Internal Control over Financial Reporting</font></b></i></p>
<p style=' margin-bottom:5pt; margin-top:5pt; text-indent:8.66%;text-align:justify;'><font face="Times New Roman, Times, serif" size=2>No change in the Company&#146;s internal control over financial reporting occurred as of the end of the period covered by this report that has materially affected, or is reasonably likely to materially affect the Company&#146;s internal control over financial reporting.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Item 16A.   &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit Committee Financial Expert</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Our Board of Directors has determined that the chair of the Board&#146;s audit committee, Mr. Pierre Beysson, an independent Director, qualifies as an audit committee financial expert.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Item 16B.   &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Code of Ethics</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We have adopted a code of ethics applicable to our Chief Executive Officer, Chief Financial Officer, principal accounting officers and to any persons performing similar functions. The code of ethics is reviewed every year by the Board of Directors. In 2008, there were no waivers of its applicability. Our code of ethics has previously been filed with the SEC and we</font><b><font size=2> </font></b><font size=2>have made it available on our website at </font><u><font size=2>www.edap-tms.com</font></u><font size=2>.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Item 16C.   &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal Accountant Fees and Services</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The &#145;&#145;Audit and Non-Audit Services Pre-Approval Policy&#146;&#146; was approved by our Audit Committee on December 22, 2003 (the &#147;2003 Rules&#148;) and reviewed on July 22, 2005. This requires all services which are to be performed by our external auditors to be pre-approved. This may be in the form of a general pre-approval or as pre-approval on a case-by-case basis. All services to be performed by the external auditors were subjected to the above policy and approved in advance. The Audit Committee has been regularly informed of the services and the fees to be paid. No services which are classified as prohibited services by the U.S. Securities and Exchange Commission under the 2003 Rules were commissioned after May 6, 2003. Our external auditors Ernst &amp; Young Audit (&#147;E&amp;Y&#148;) billed the following services related to our 2008 financial year:</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Nature of the Fees </font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p align="right" style='margin-left:0pt;text-indent:.75pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006 (in &#128;)</font></b></p> </td>
        <td width="18%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007 (in &#128;)</font></b></p> </td>
        <td width="18%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p align="right" style='margin-left:0pt;text-indent:.75pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008 (in &#128;)</font></b></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Audit fees</font></p> </td>
        <td width="18%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>175,780&nbsp;</font></p> </td>
        <td width="18%" style='height:12.75pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>162,394&nbsp;</font></p> </td>
        <td width="18%" style='height:12.75pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>213,380&nbsp;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Audit-related fees</font></p> </td>
        <td width="18%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>96,850    </font></p> </td>
        <td width="18%" style='height:12.75pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>53,040&nbsp;</font></p> </td>
        <td width="18%" style='height:12.75pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,360&nbsp;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Tax fees</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt'><font size=2>All other fees </font></p> </td>
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      <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-&nbsp;</font></p> </td>
        <td width="18%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.5pt;margin-bottom:0pt'><b><font size=2>Total</font></b></p> </td>
        <td width="18%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>272,630&nbsp;</font></b></p> </td>
        <td width="18%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>&nbsp;215,434&nbsp;</font></b></p> </td>
        <td width="18%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>214,740&nbsp;</font></b></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><i><b><font size=2>Audit Fees</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The following services were billed under the category &#145;&#145;audit services&#146;&#146;: audit of financial statements and services performed in relation to legal obligations, including the formulation of audit opinions and reports, domestic and international legal audits and support in the preparation and auditing of the documents to be filed. Audit services also included the auditing of information systems and processes and tests, which serve to promote understanding and reliability of the systems and internal corporate controls, as well as advice on issues of billing, accounting and reporting.</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><A NAME="PAGENUM"><font size=2>67</font></A></p> </td>
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><i><b><font size=2>Audit-Related Fees</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Audit-related services mainly consisted of services that are normally performed by the external auditor in connection with the auditing of the annual financial statements. Audit-related services also included advice on issues of accounting and reporting which were not classified as audit services, support with the interpretation and implementation of new accounting and reporting standards, auditing of employee benefit plans and support with the implementation of corporate control requirements for reporting.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><i><b><font size=2>Tax Fees</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Tax services consisted of services relating to issues of domestic and international taxation (adherence to tax law, tax planning and tax consulting). Furthermore, services were commissioned for the review of tax returns, assistance with tax audits, as well as assistance relating to tax law. No tax services were rendered during the 2008 fiscal year.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><i><b><font size=2>All Other Fees</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Other services mainly consisted of routine and administrative follow-up of patents and brand names. All these services were unrelated to the audits of our financial statements.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Item 16D.   &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exemptions from the Listing Standards for Audit Committees</font></b></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Item 16E.    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Purchases of Equity Securities by the Issuer and Affiliated Purchasers</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2008, neither the Company nor affiliated purchasers made purchases of equity securities of the Company registered pursuant to Section 12 of the Exchange Act. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Item 16F.   &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in Registrant&#146;s Certifying Accountant</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Not applicable.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Item 16G.   &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;   Corporate Governance</font></b></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Exemptions from Certain NASDAQ Corporate Governance Rules</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>NASDAQ rules provide for exemptions from the NASDAQ corporate governance standards to a foreign issuer when those standards are contrary to a law, rule or regulation of any public authority exercising jurisdiction over such issuer or contrary to generally accepted business practices in the issuer&#146;s country of domicile. We received from NASDAQ an exemption from compliance with one certain corporate governance standard that is contrary to the law, rules, regulations or generally accepted business practices of France. The exemption, and the practices followed by the Company, are described below.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>We are exempt from NASDAQ&#146;s quorum requirements applicable to meetings of shareholders. In keeping with French law and generally accepted business practices in France, the presence in person or by proxy of shareholders having not less than 20% (in the case of an ordinary general meeting or an extraordinary general meeting deciding upon any capital increase by capitalization of reserves) or 25% (in the case of an extraordinary general meeting) of the shares is necessary for a quorum. If a quorum is not present at any meeting, the meeting is adjourned. Upon recommencement of an adjourned meeting, there is no quorum requirement in the case of an ordinary general meeting or an extraordinary general meeting deciding upon any capital increase by capitalization of reserves. The presence in person or by proxy of shareholders having not less than 20% of the Shares is necessary for a quorum in
the case of any other type of extraordinary general meeting. We petitioned for this exemption because there are doubts as to whether it would be legally permissible for a French company to adopt in its articles of association quorum requirements that would be more stringent than those prescribed by French law, and this would in any event be contrary to generally accepted business practice in France.</font></p>
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<p style=' margin-bottom:0pt; margin-top:24pt;text-align:center;'><B><font SIZE=1>PART III</font></B></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Item 17.    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;Financial Statements.</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>See Item 18, "Financial Statements."</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Item 18. &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial Statements</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The financial statements listed in the Index to Financial Statements are filed as a part of this Annual Report.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Item 19.    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;Exhibits</font></b></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The exhibits listed in the Index to Exhibits are filed or incorporated by reference as a part of this Annual Report.</font></p>
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1 face="Times New Roman, Times, serif">INDEX TO EXHIBITS</font></B></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Pursuant to the rules and regulations of the Securities and Exchange Commission, the Company has filed certain agreements as exhibits to this annual report on Form 20-F. These agreements may contain representations and warranties by the parties. These representations and warranties have been made solely for the benefit of the other party or parties to such agreements and (i) may be intended not as statements of fact, but rather as a way of allocating the risk to one of the parties to such agreements if those statements turn out to be inaccurate; (ii) may have been qualified by disclosures that were made to such other party or parties and that either have been reflected in the Company&#146;s filings or are not required to be disclosed in those filings; (iii) may apply materiality standards different from what may be viewed as material to investors; and (iv) were made only as of the date of
such agreements or such other date(s) as may be specified in such agreements and are subject to more recent developments. Accordingly, these representations and warranties may not describe the Company&#146;s actual state of affairs at the date hereof.</font></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Exhibit Description</font></b></p>
<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Number:</font></b></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.1 </font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>By-laws (</font><i><font size=2>statuts</font></i><font size=2>) of EDAP TMS S.A. as amended as of January 8, 2009. </font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.1</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(a) Commercial Leases dated October 1, 2002 and Amendment No. 1 dated October 15, 2002, between Maison Antoine Baud and EDAP TMS S.A., EDAP S.A. and Technomed Medical Systems S.A. (together with an English translation thereof) (incorporated herein by reference to Exhibit 4.4 to the Annual Report on Form 20-F filed on May 8, 2003 (File No. 000-29374)).<sup> (1)</sup></font></p> </td> </tr>
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      <td valign=top style='padding:3.0pt 0in 0in 0in'>&nbsp;</td>
      <td  valign=top style='padding:3.0pt 0in 0in 0in'><font size=2>(b) Amendment No. 2 to commercial leases between TMS S.A. and Maison Antoine Baud, signed on June 28, 2004(incorporated herein by reference to Exhibit 4.2(b) to the Annual Report on Form 20-F filed on May 20, 2005 (File No. 000-29374)).<sup> (1)</sup></font></td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.2</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Registration Rights Agreement dated as of July 27, 2006, among EDAP TMS S.A. and the investors signatory thereto (incorporated herein by reference to Exhibit 2 to the Report of Foreign Private Issuer on Form 6-K/A furnished on August 18, 2006 (File No. 000-29374)).<sup> (1)</sup></font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.3</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Securities Purchase Agreement dated as of October 29, 2007 among EDAP TMS S.A. and each purchaser identified on the signature pages thereto (incorporated herein by reference to Exhibit 1 to the Report of Foreign Private Issuer on Form 6-K furnished on October 31, 2007 (File No. 000-29374)).<sup> (1) </sup></font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.4</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Registration Rights Agreement dated as of October 29, 2007, among EDAP TMS S.A. and the investors signatory thereto (incorporated herein by reference to Exhibit 2 to the Report of Foreign Private Issuer on Form 6-K furnished on October 31, 2007 (File No. 000-29374)).<sup> (1)</sup></font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.5</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Amended and Restated</font> <font size=2>Depositary Agreement with Bank of New York), filed with the SEC on March 27, 2008 as Post-Effective Amendment No.1 to Form F-6 (File No. 333-07314). <sup>(1)</sup></font></p> </td> </tr></table>
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      <td valign=top ><font size=2>8.1</font></td>
      <td  valign=top ><font size=2>List of subsidiaries of EDAP TMS S.A. as of March 31, 2009.</font></td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>11.1 </font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Code of Ethics of the Company, approved by the Board of Directors on July 22, 2005.<sup>(1)</sup></font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002.</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15.1</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Consent of Ernst &amp; Young.</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><font size=2>(1)</font></i></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><i><font size=2>Previously filed.</font></i></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf. </font></p>
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<p style=' margin-bottom:0pt; margin-top:6pt; margin-left:49.97%; text-indent:8.33%;text-align:justify;'><font SIZE=2>EDAP TMS S.A.</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="60%" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Dated: March 31, 2009</font></p> </td>
        <td width="39%" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/ MARC OCZACHOWSKI
            </font></u><br>
            <i><font size=2>Marc Oczachowski</font></i><br>
            <i><font size=2>Chief Executive Officer</font></i><br></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:justify;'><i></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:justify;'><i></i></p>
<p style=' margin-bottom:0pt; margin-top:3pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:3pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<table border="0" cellspacing=0 cellpadding=0 width="88%" style=' border-collapse:collapse'>
  <tr>
    <td width="1%" nowrap valign=top >
      <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p></td>
    <td width="60%" nowrap valign=top >
      <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Dated: March 31, 2009</font></p></td>
    <td width="39%" nowrap valign=top >
      <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/ ERIC SOYER</font></u><br>
          <i><font size=2>Eric Soyer</font></i><br>
          <i><font size=2>Chief Financial Officer</font></i><br>
    </p></td>
  </tr>
</table>
<div align=left></div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:justify;'><i></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:justify;'><i></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<div TITLE="EE+ Page Footer">
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1></font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white; padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="33%" valign=top style=background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><A NAME="PAGENUM"><font size=2>71</font></A></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:140.25pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>




<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2><br>
</font></p>

<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>INDEX TO FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Audited Consolidated Financial Statements for EDAP TMS S.A. and Subsidiaries for the Years Ended December 31, 2008, 2007 and 2006</font></b></p>

<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=92% nowrap align=left> <FONT size=2>Report of Independent Auditors</FONT>&nbsp; </TD>
    <TD width=2%>&nbsp; </TD>
    <TD width=5% nowrap align=right> <FONT size=2>F-2</FONT>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=92% nowrap align=left> <FONT size=2>Consolidated Balance Sheets as of December 31, 2008 and 2007</FONT>&nbsp; </TD>
    <TD width=2%>&nbsp; </TD>
    <TD width=5% nowrap align=right> <FONT size=2>F-3</FONT>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=92% nowrap align=left> <FONT size=2>Consolidated Statements of Income for the years ended December 31, 2008, 2007 and 2006</FONT>&nbsp; </TD>
    <TD width=2%>&nbsp; </TD>
    <TD width=5% nowrap align=right> <FONT size=2>F-4</FONT>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=99% nowrap colspan=3 align=left> <FONT size=2>Consolidated Statements of Comprehensive Income for the years ended December 31, 2008, 2007</FONT>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=92% nowrap align=left> <FONT size=2>and 2006</FONT>&nbsp; </TD>
    <TD width=2%>&nbsp; </TD>
    <TD width=5% nowrap align=right> <FONT size=2>F-5</FONT>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=92% nowrap align=left> <FONT size=2>Consolidated Statements of Shareholders&#146; Equity for the years ended December 31, 2008, 2007</FONT>&nbsp; </TD>
    <TD width=2%>&nbsp; </TD>
    <TD width=5% nowrap align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=92% nowrap align=left> <FONT size=2>and 2006</FONT>&nbsp; </TD>
    <TD width=2%>&nbsp; </TD>
    <TD width=5% nowrap align=right> <FONT size=2>F-6</FONT>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=92% nowrap align=left> <FONT size=2>Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006</FONT>&nbsp; </TD>
    <TD width=2%>&nbsp; </TD>
    <TD width=5% nowrap align=right> <FONT size=2>F-7</FONT>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=92% nowrap align=left> <FONT size=2>Notes to Consolidated Financial Statements</FONT>&nbsp; </TD>
    <TD width=2%>&nbsp; </TD>
    <TD width=5% nowrap align=right> <FONT size=2>F-8</FONT>&nbsp; </TD>
  </TR>
</TABLE>
<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-1</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
</p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Report of Independent Registered Public Accounting Firm</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Board of Directors and Shareholders of EDAP TMS S.A. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><font size=2>We have audited the accompanying consolidated balance sheets of EDAP TMS S.A. and subsidiaries as of December 31, 2007 and 2008, and the related consolidated statements of income, comprehensive income, changes in shareholders' equity and cash flows for the three years ended December 31, 2008. These consolidated financial statements are the responsibility of EDAP TMS's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><font size=2>We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company&#146;s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company&#146;s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><font size=2>In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of EDAP TMS S.A. and subsidiaries at December 31, 2007 and 2008, and the consolidated results of its operations and its cash flows for the three years ended December 31, 2008, in conformity with U.S. generally accepted accounting principles. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font style='background-color:'><font color=""><font size=2>&nbsp;</font></font></font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; margin-left:49.97%; text-indent:8.33%;text-align:justify;'><font size=2>ERNST &amp; YOUNG Audit</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:justify;'><font size=2>/</font><u><font size=2>s/ LAURENT CHAPOULAUD&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:justify;'><font size=2>Represented by</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:justify;'><font size=2>Laurent Chapoulaud </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2><br>
March 31, 2009</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Lyon, France</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-2</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>CONSOLIDATED BALANCE SHEETS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>As of December 31, 2008 and 2007</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>ASSETS </font></B></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Notes</font></b></p> </td>
        <td width="11%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="11%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Current assets</font></b></p>  </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Cash and cash equivalents </font>                                              </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>13,827</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>17,523</font></p> </td> </tr>
    <tr style='height:11.9pt'>
        <td width="68%" valign=bottom style=' height:11.9pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net Trade accounts and notes receivable </font>                   </p> </td>
        <td width="9%" valign=bottom style=' height:11.9pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="11%" style='height:11.9pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>14,611</font></p> </td>
        <td width="11%" style='height:11.9pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10,876</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Other receivables</font>   </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>4</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>951</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,149</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Inventories </font>                                </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>5</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,023</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,306</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deferred tax assets </font>                                        </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>22-3</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>322</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>245</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Other assets, current portion</font>                                       </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>6</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>909</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>935</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Short-term investment</font>                          </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=2>2</font></p> </td>
        <td width="11%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,143</font></p> </td>
        <td width="11%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,089</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total current assets</font>                                      </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>35,786</font></p> </td>
        <td width="11%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>36,124</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Other assets, non-current </font>     </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>6</font></p> </td>
        <td width="11%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,330</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,800</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Property and equipment, net </font>                                      </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>7</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,763</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,179</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Intangible assets, net</font>                              </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>8</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>102</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>79</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Goodwill</font>                                                 </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>8</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,412</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,412</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Deposits and other non-current assets</font>                                   </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>471</font></p> </td>
        <td width="11%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>410</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total assets </font>                            </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='border-bottom:double black 2.25pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>43,863</font></p> </td>
        <td width="11%" style='border-bottom:double black 2.25pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>45,003</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>LIABILITIES AND SHAREHOLDERS&#146; EQUITY</font></b></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Current liabilities</font></b></p>  </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Trade accounts and notes payable </font>     </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>9</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,046</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,661</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deferred revenues, current portion</font>        </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>10</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>704</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>452</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Social security and other payroll withholdings taxes</font>             </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>770</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>813</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Employee absences compensation </font>      </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>450</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>443</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Income taxes payable </font>                           </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>38</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>49</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Other accrued liabilities</font>                   </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>11</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,908</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,293</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Short-term borrowings</font>                        </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>13</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,753</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,593</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Current portion of capital lease obligations </font>          </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>12</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>708</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>521</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Current portion of long-term debt </font>            </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=2>14</font></p> </td>
        <td width="11%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>79</font></p> </td>
        <td width="11%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>58</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total current liabilities </font>                      </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>14,457</font></p> </td>
        <td width="11%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,884</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deferred revenues, non current</font>                          </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>10</font></p> </td>
        <td width="11%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>582</font></p> </td>
        <td width="11%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>708</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Capital lease obligations, non current</font>                                          </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>12</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,311</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,035</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Convertible debentures carried at fair value</font>           </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>14</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,901</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,691</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Financial instruments carried at fair value</font>                      </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>14</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>447</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,484</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Long-term debt, non current</font>                                          </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>14</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>152</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#8722;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Other long-term liabilities </font>       </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=2>15</font></p> </td>
        <td width="11%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>822</font></p> </td>
        <td width="11%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>703</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total liabilities </font>               </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>26,672</font></p> </td>
        <td width="11%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>30,504</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Shareholders&#146; equity</font></b></p>  </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Common stock, &#128;0.13 par value;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10,006,333 shares issued and 9,582,593 shares outstanding; 9,624,497 shares issued and   9,200,757 shares outstanding; at December 31,</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2008 and  2007, respectively </font>                                      </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,301</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,251</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Additional paid-in capital </font>      </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>27,145</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>25,896</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Retained earnings </font>                                             </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(6,668)</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(8,265)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Cumulative other comprehensive loss </font>                                     </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,285) </font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,082) </font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Treasury stock, at cost; 423,740 at December 31, 2008 and 2007, respectively </font>                            </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,301) </font></p> </td>
        <td width="11%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,301) </font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total shareholders&#146; equity </font>                                     </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=2>16</font></p> </td>
        <td width="11%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>17,191</font></p> </td>
        <td width="11%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>14,499</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total liabilities and shareholders&#146; equity </font>            </p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='border-bottom:double black 2.25pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>43,863</font></p> </td>
        <td width="11%" style='border-bottom:double black 2.25pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>45,003</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-3</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=2>CONSOLIDATED STATEMENTS OF INCOME</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>For the years ended December 31, 2008, 2007 and 2006</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><b><font size=2>Notes</font></b></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td width="10%" valign=top style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Sales of goods</font>                 </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,547</font></p> </td>
        <td width="10%" valign=bottom style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,752</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10,849</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Sales of RPPs &amp; leases</font>                    </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,664</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,814</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,805</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Sales of spare parts and services</font>                  </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,645</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,647</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,520</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total sales </font>                                   </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,856</font></p> </td>
        <td width="10%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,213</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=2>20,174</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total net sales</font>                  </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=2>17</font></p> </td>
        <td width="10%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,856</font></p> </td>
        <td width="10%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,213</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>20,174</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Other revenues </font>           </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=2>18</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>197</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>113</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>91</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total revenues</font>                </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>23,053</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,327</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>20,265</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Cost of goods</font>                    </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(8,395)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(7,130)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,582)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Cost of RPPs &amp; leases</font>                       </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,546)</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,169)</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,576)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Cost of spare parts and services</font>                     </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,014)</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,849)</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,789)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total cost of sales</font>                                              </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(13,955)</font></p> </td>
        <td width="10%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(13,148)</font></p> </td>
        <td width="10%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(11,946)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Gross profit </font>                              </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,099</font></p> </td>
        <td width="10%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,179</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,319</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Research and development expenses </font>                                         </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,255)</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,194)</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,442)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Selling and marketing expenses </font>                       </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,684)</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,476)</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,621)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="57%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>General and administrative expenses</font>                                               </p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,862)</font></p> </td>
        <td width="10%" style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,374)</font></p> </td>
        <td width="10%" style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,082)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Non-recurring operating expenses</font>           </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=2>19</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(224)</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(267)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Loss from operations</font>                               </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,703)</font></p> </td>
        <td width="10%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,089)</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,094)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Financial (expense) income, net </font>                       </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>20</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,232</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,243)</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>153</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Foreign currency exchange gain (loss), net</font>              </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>577</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(254)</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(430)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Other income (expense), net</font>                                            </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=2>21</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>16</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Income (loss) before taxes </font>  </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,105</font></p> </td>
        <td width="10%" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,571)</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,375)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Income tax (expense) benefit </font>                                      </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=2>22</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>492</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>140</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(56)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="57%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Net income (loss)</font>   </p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='border-bottom:double black 2.25pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,597</font></p> </td>
        <td width="10%" style='border-bottom:double black 2.25pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,430)</font></p> </td>
        <td width="10%" style='border-bottom:double black 2.25pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,431)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="57%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Basic income (loss) per share</font>                                     </p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>23</font></p> </td>
        <td width="10%" style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0.17</font></p> </td>
        <td width="10%" style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.59)</font></p> </td>
        <td width="10%" style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.39)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="57%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Diluted income (loss) per share<sup>(1)</sup> </font>            </p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>23</font></p> </td>
        <td width="10%" style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0.17</font></p> </td>
        <td width="10%" style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.59)</font></p> </td>
        <td width="10%" style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.39)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Basic Weighted average shares outstanding</font>    </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>23</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,582,593</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,200,757</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,817,007</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Diluted Weighted average shares outstanding</font>                                          </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>23</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,658,295</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,200,757</font></p> </td>
        <td width="10%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,817,007</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size="2"><sup>(1)</sup> Due to the net losses in 2006 and 2007, the assumed net exercise of stock options/warrants and stock relating to the convertible bonds in those years was excluded, as the effect would have been anti-dilutive.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>The accompanying notes are an integral part of the consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-4</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=2>CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>For the years ended December 31, 2008, 2007 and 2006</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="66%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="11%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td width="11%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="66%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net income(loss)</font>      </p> </td>
        <td width="11%" valign=top style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,597</font></p> </td>
        <td width="11%" valign=top style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,430)</font></p> </td>
        <td width="11%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,431)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="66%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Other comprehensive loss:</font></p> </td>
        <td width="11%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="66%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Foreign currency translation adjustments </font>                  </p> </td>
        <td width="11%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(168)</font></p> </td>
        <td width="11%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(71)</font></p> </td>
        <td width="11%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(55)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="66%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Provision for retirement indemnities</font>   </p> </td>
        <td width="11%" valign=top style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(34)</font></p> </td>
        <td width="11%" valign=top style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5</font></p> </td>
        <td width="11%" valign=top style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(84)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="66%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Comprehensive income (loss), net of tax</font>                            </p> </td>
        <td width="11%" valign=top style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,395</font></p> </td>
        <td width="11%" valign=top style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,496)</font></p> </td>
        <td width="11%" valign=top style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,570)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:49.97%; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>The accompanying notes are an integral part of the consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-5</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><b><font size=2>CONSOLIDATED STATEMENTS OF SHAREHOLDERS&#146; EQUITY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>For the years ended December 31, 2008, 2007 and 2006</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>&nbsp;</p>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
  <tr style='height:72.75pt'>
    <td style='height:72.75pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p></td>
    <td style='border-bottom:solid black .5pt; height:72.75pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Number of Shares</font></b></p></td>
    <td style='border-bottom:solid black .5pt; height:72.75pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Common Stock</font></b></p></td>
    <td style='border-bottom:solid black .5pt; height:72.75pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Additional paid-in Capital</font></b></p></td>
    <td style='border-bottom:solid black .5pt; height:72.75pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Retained Earnings</font></b></p></td>
    <td style='border-bottom:solid black .5pt; height:72.75pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Cumula-tive Other Compre-hensive Income (loss)</font></b></p></td>
    <td style='border-bottom:solid black .5pt; height:72.75pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Treasury Stock </font></b></p></td>
    <td style='border-bottom:solid black .5pt; height:72.75pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Total</font></b></p></td>
  </tr>
  <tr style='height:13.5pt'>
    <td valign=bottom style=' height:13.5pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Balance as of January 1, 2006</font></p></td>
    <td valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>7,782,731</font></p></td>
    <td valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,087</font></p></td>
    <td valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>20,359</font></p></td>
    <td valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>597</font></p></td>
    <td valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,877)</font></p></td>
    <td valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,794)</font></p></td>
    <td valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>17,372</font></p></td>
  </tr>
    <tr style='height:13.5pt'>
      <td valign=bottom style=' height:13.5pt'>&nbsp;</td>
      <td valign=bottom style='border-top:solid black .5pt; height:13.5pt'>&nbsp;</td>
      <td valign=bottom style='border-top:solid black .5pt; height:13.5pt'>&nbsp;</td>
      <td valign=bottom style='border-top:solid black .5pt; height:13.5pt'>&nbsp;</td>
      <td valign=bottom style='border-top:solid black .5pt; height:13.5pt'>&nbsp;</td>
      <td valign=bottom style='border-top:solid black .5pt; height:13.5pt'>&nbsp;</td>
      <td valign=bottom style='border-top:solid black .5pt; height:13.5pt'>&nbsp;</td>
      <td valign=bottom style='border-top:solid black .5pt; height:13.5pt'>&nbsp;</td>
    </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net loss </font>     </p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,431)</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,431)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Translation adjustment</font>                                 </p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(55)</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(55)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Warrants and stock options granted </font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>72,600</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>256</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>260</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Capital increase</font>                    </p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>961,676</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>125</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,114</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,239</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Provision for retirement indemnities</font>                                                </p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(84)</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(84)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Balance as of December 31, 2006 </font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,817,007</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,212</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>25,476</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,835)</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,016)</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,538)</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>19,300</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net loss </font>     </p> </td>
        <td width="10%" valign=bottom style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,430)</font></p> </td>
        <td width="10%" valign=bottom style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,430)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Translation adjustment</font>                                 </p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(71)</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(71)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Warrants and stock options granted </font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>383,750</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>39</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>420</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>237</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>695</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Capital increase</font>                    </p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Provision for retirement indemnities</font>                                                </p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Balance as of December 31, 2007</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,200,757</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,251</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>25,896</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(8,265)</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,082)</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,301)</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>14,499</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net income </font>                                      </p> </td>
        <td width="10%" valign=bottom style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,597</font></p> </td>
        <td width="10%" valign=bottom style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,597</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Translation adjustment</font>                                 </p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(168)</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(168)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Warrants and stock options granted </font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>699</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>699</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Capital increase</font>                    </p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>381,836</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>50</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>550</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>599</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Provision for retirement indemnities</font>                                                </p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(34)</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(34)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="29%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Balance as of December 31, 2008</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,582,593</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,301</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>27,145</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(6,668)</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,285)</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,301)</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>17,191</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>The accompanying notes are an integral part of the consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-6</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>CONSOLIDATED STATEMENTS OF CASH FLOWS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>For the years ended December 31, 2008, 2007 and 2006</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted)</font></b><font size=2>.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:15.75pt'>
        <td width="67%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="67%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Cash flows from operating activities</font></b></p> </td>
        <td width="10%" valign=top style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=top style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=top style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net income (loss) </font>                                                </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,597</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,430)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,431)</font></p> </td> </tr>
    <tr style='height:10.5pt'>
        <td width="67%" valign=bottom style=' height:10.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Adjustments to reconcile net loss to net cash used in operating activities:</font></p> </td>
        <td width="10%" valign=bottom style=' height:10.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:10.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:10.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Depreciation and amortization </font>                              </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,785</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,296</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,257</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Change in fair value on Convertible Debentures</font>                                   </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,465)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>747</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Change in fair value on Investors Warrants and Placement Agent Warrants</font>                                                </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,238)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>371</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Other Non-cash compensation</font>                             </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>684</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>72</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>32</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Change in allowances for doubtful accounts &amp; slow-moving inventories</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>394</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>412</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>273</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Change in long-term provisions </font>                     </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>325</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(18)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>229</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="67%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net capital loss on disposals of assets</font>                                    </p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>255</font></p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>407</font></p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>245</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deferred tax expense/(benefit) </font>                              </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(77)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(161)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(91)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Net loss (gain) on sale of assets </font>                   </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Operating cash flow</font>                                     </p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,740)</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,304)</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,486)</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="67%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Increase/Decrease in operating assets and liabilities:</font></p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Decrease/(Increase) in trade accounts and notes and other receivables </font>       </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,467)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,599)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,201)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Decrease/(Increase) in inventories </font>       </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(126)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(820)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>429</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Decrease/(Increase) in other assets </font>  </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>26</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>278</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(353)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(Decrease)/Increase in trade accounts and notes payable </font>                               </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>561</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,009</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>395</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>(Decrease)/Increase in accrued expenses, other current liabilities </font>                                        </p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>152</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>707</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>315</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="67%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net increase/decrease in operating assets and liabilities</font>                                          </p> </td>
        <td width="10%" valign=bottom style='height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,854)</font></p> </td>
        <td width="10%" valign=bottom style='height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(426)</font></p> </td>
        <td width="10%" valign=bottom style='height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(415)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Net cash used in operating activities </font></b>                                           </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,593)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,729)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,901)</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="67%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Cash flows from investing activities</font></b></p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="67%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Additions to capitalized assets produced by the Company</font>                           </p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(687)</font></p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,947)</font></p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,287)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net proceeds from sale of leased back assets</font>  </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,108</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,192</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>737</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Acquisitions of property and equipment </font>                       </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(373)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(513)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(208)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Acquisitions of intangible assets </font>             </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(57)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(46)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(43)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Acquisitions of short term investments </font>                             </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(691)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(58)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,031)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net proceeds from sale of assets</font>                   </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>168</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>221</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Increase in deposits and guarantees</font>                                                </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(11)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(34)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(18)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Reimbursement of deposits and guarantees </font>       </p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Net cash used in investing activities </font></b>                                            </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(712)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,238)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,629)</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="67%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Cash flow from financing activities</font></b></p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="67%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Proceeds from capital increase</font><font size=1> (2007: exercise of warrants and stock options)</font></p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>600</font></p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>352</font></p> </td>
        <td width="10%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,239</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Proceeds from long term borrowings, net of financing costs </font>                  </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>238</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,876</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>150</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Repayment of long term borrowings </font>                                              </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(65)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(121)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(148)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Repayment of obligations under capital leases </font>                                        </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(636)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(569)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(464)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Increase/(decrease) in bank overdrafts and short-term borrowings </font>                                </p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>159</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>285</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>409</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Net cash used in financing activities</font></b>                                               </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>296</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,824</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,186</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Net effect of exchange rate changes on cash and cash equivalents </font>                              </p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,313</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(227)</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(80)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Net increase/(decrease) in cash and cash equivalents</font></b>      </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,696)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>7,629</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,575</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="67%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Cash and cash equivalents at beginning of year </font>                                </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>17,523</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,894</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,317</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="67%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><b><font size=2>Cash and cash equivalents at end of year</font></b>                     </p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>13,827</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>17,523</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,894</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:4.16%;text-align:center;'><font size=2>The accompanying notes are an integral part of the consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-7</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:4.16%;text-align:center;'><B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>1&#151;SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-1 Nature of operations</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>EDAP TMS S.A. and its subsidiaries (&#145;&#145;the Company&#146;&#146;) are engaged in the development, production, marketing, distribution and maintenance of a portfolio of minimally-invasive medical devices for the treatment of urological diseases. The Company currently produces devices for treating stones of the urinary tract, benign prostatic hyperplasia and localized prostate cancer. Net sales consist primarily of direct sales to hospitals and clinics in France and Europe, export sales to third-party distributors and agents, and export sales through subsidiaries based in Italy and Asia.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Company purchases the majority of the components used in its products from a number of suppliers but for some components, relies on a single source. Delay would be caused if the supply of these components or other components was interrupted and these delays could be extended in certain situations where a component substitution may require regulatory approval. Failure to obtain adequate supplies of these components in a timely manner could have a material adverse effect on the Company&#146;s business, financial position and results of operation.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-2 Management estimates</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The preparation of financial statements in conformity with U.S. generally accepted accounting principles (&#145;&#145;US GAAP&#146;&#146;) requires management to make estimates and assumptions, such as business plans, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-3 Consolidation</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The accompanying consolidated financial statements include the accounts of EDAP TMS S.A. and all its domestic and foreign owned subsidiaries, which include EDAP TMS France SAS (formerly "Technomed Medical Systems S.A."), EDAP Technomed Inc., Edap Technomed Sdn Bhd, Edap Technomed Italia S.R.L, EDAP Technomed Co. Ltd. (formerly Nippon Euro Edap Technomed KK) and EDAP TMS Gmbh (formerly EDAP GmbH). Edap Technomed Sdn Bhd was incorporated in early 1997. Edap Technomed Co. Ltd. was created in late 1996.  EDAP TMS Gmbh was created in July 2006. EDAP SA, a subsidiary incorporating HIFU activities merged all of its activity into EDAP TMS France SAS in 2008. All intercompany transactions and balances are eliminated in consolidation</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-4 Revenue recognition</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Sales of goods:</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>For medical device sales with no significant remaining vendor obligation, payments contingent upon customer financing, acceptance criteria that can be subjectively interpreted by the customer, or tied to the use of the device, revenue is recognized when evidence of an arrangement exists, title to the device passes (depending on terms, either upon shipment or delivery), and the customer has the intent and ability to pay in accordance with contract payment terms that are fixed or determinable. For sales in which payment is contingent upon customer financing, acceptance criteria can be subjectively interpreted by the customer, or payment depends on use of the device, revenue is recognized when the contingency is resolved. The Company provides training and provides a minimum of one-year warranty upon installation. The Company accrues for the estimated training and warranty costs at the time
of sale. Revenues related to disposables are recognized when goods are delivered. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-8</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Sales of RPPs and leases:</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Revenues related to the sale of Ablatherm treatments invoiced on a &#145;&#145;Revenue-Per-Procedure&#146;&#146; (&#145;&#145;RPP&#146;&#146;) basis are recognized when the treatment procedure has been completed. Revenues from devices leased to customers under operating leases are recognized on a straight-line basis.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Sales of spare parts and services:</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Revenues related to spare parts are recognized when goods are delivered. Maintenance contracts rarely exceed one year and are recognized on a linear basis. Billings or cash receipts in advance of services due under maintenance contracts are recorded as deferred revenue.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-5 Shipping and handling costs</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Company recognizes revenue from the shipping and handling of its products as a component of revenue. Shipping and handling costs are recorded as a component of cost of sales.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-6 Cash equivalents and short term investments</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Cash equivalents are cash investments which are highly liquid and have initial maturities of 90 days or less. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Cash investments with a maturity higher than 90 days are considered as short-term investments. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-7 Accounts Receivables</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Accounts receivables are stated at cost net of allowances for doubtful accounts. The Company makes judgments as to its ability to collect outstanding receivables and provides allowances for the portion of receivables when collection becomes doubtful. Provision is made based upon a specific review of all significant outstanding invoices. These estimates are based on our bad debt write-off experience, analysis of credit information, specific identification of probable bad debt based on our collection efforts, aging of accounts receivables and other known factors. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-8 Inventories</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Inventories are valued at the lower of manufacturing cost, which is principally comprised of components and labor costs, or market (net realizable value). Cost is determined on a first-in, first-out basis for components and spare parts and by specific identification for finished goods (medical devices). The Company establishes reserves for inventory estimated to be obsolete, unmarketable or slow moving, first based on a detailed comparison between quantity in inventory and historical consumption and then based on case-by-case analysis of the difference between the cost of inventory and the related estimated market value.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-9</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-9 Property and equipment</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Property and equipment is stated at historical cost. Depreciation and amortization of property and equipment are calculated using the straight-line method over the estimated useful life of the related assets, as follows:</font></p>

<p style=' margin-bottom:0pt; margin-top:3pt;text-align:left;'><font size=2>Leasehold improvements......................................... 10 years or lease term if shorter</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Equipment ................................................................. 3-10 years</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Furniture, fixtures, fittings and other .................... 2-10 years</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Equipment includes industrial equipment and research equipment that has alternative future uses. Equipment also includes devices that are manufactured by the Company and leased to customers through operating leases related to Revenue-Per-Procedure transactions and devices subject to sale and leaseback transactions. This equipment is depreciated over a period of seven years. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-10 Long-lived assets</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Company reviews the carrying value of its long-lived assets, including fixed assets and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be fully recoverable. Recoverability of long-lived assets is assessed by a comparison of the carrying amount of the assets (or the Group of assets, including the asset in question, that represents the lowest level of separately-identifiable cash flows) to the total estimated undiscounted cash flows expected to be generated by the asset or group of assets. If the future net undiscounted cash flows is less than the carrying amount of the asset or group of assets, the asset or group of assets is considered impaired and an expense is recognized equal to the amount required to reduce the carrying amount of the asset or group of assets to its then fair value. Fair value
is determined by discounting the cash flows expected to be generated by the assets, when the quoted market prices are not available for the long-lived assets. Estimated future cash flows are based on assumptions and are subject to risk and uncertainty. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-11 Goodwill and intangible assets</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Goodwill represents the excess of purchase price over the fair value of identifiable net assets of businesses acquired. Goodwill is not amortized but instead tested annually for impairment or more frequently when events or change in circumstances indicate that the assets might be impaired by comparing the carrying value to the fair value of the reporting units to which it is assigned. Under Statement of Financial Accounting Standards 142, &#147;Goodwill and other intangible assets&#148;, the impairment test is performed in two steps. The first step compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is less than its carrying amount, a second step is performed to measure the amount of impairment loss. The second step allocates the fair value of the reporting unit to the Company&#146;s tangible and intangible
assets and liabilities. This derives an implied fair value for the reporting unit&#146;s goodwill. If the carrying amount of the reporting units goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized equal to that excess. For the purpose of any impairment test, the Company relies upon projections of future undiscounted cash flows and takes into account assumptions regarding the evolution of the market and its ability to successfully develop and commercialize its products. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Changes in market conditions could have a major impact on the valuation of these assets and could result in additional impairment losses.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-10</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Intangible assets consist primarily of purchased patents relating to lithotripters, purchased licenses, a purchased trade name and a purchased trademark. The basis for valuation of these assets is their historical acquisition cost. Amortization of intangible assets is calculated by the straight-line method over the shorter of the contractual or estimated useful life of the assets, as follows:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Patents .................................................................... 5 years</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Licenses................................................................... 5 years</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Trade name and trademark ...................................  7 years</font></p>


<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-12 Treasury Stocks</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Treasury stock purchases are accounted for at cost. The sale of treasury stocks is accounted for using the first in first out method. Gains on the sale or retirement of treasury stocks are accounted for as additional paid-in capital whereas losses on the sale or retirement of treasury stock are recorded as additional paid-in capital to the extent that previous net gains from sale or retirement of treasury stocks are included therein; otherwise the losses shall be recorded to accumulated benefit (deficit) account. Gains or losses from the sale or retirement of treasury stock do not affect reported results of operations. </font></p>
<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>1-13 Warranty expenses</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Company generally provides customers with a warranty for each product sold and accrues warranty expense at time of sale based upon historical claims experience. Actual warranty costs incurred are charged against the accrual when paid and are classified in cost of sales in the statement of income</font><font color="#FF0000"><font size=2>. </font></font><font size=2>Warranty expense amounted to &#128;768 thousand, &#128;645 thousand and &#128;483 thousand for the years ended December 31 2008, 2007 and 2006 respectively.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-14 Income taxes</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Company accounts for income taxes in accordance with SFAS No. 109, &#145;&#145;Accounting for Income Taxes&#146;&#146; Under SFAS No. 109, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured by applying enacted tax rates and laws to taxable years in which such differences are expected to reverse. A valuation allowance is established if, based on the weight of available evidence, it is more likely than not that some portion, or all of the deferred tax assets, will not be realized. In accordance with SFAS No. 109, no provision has been made for income or withholding taxes on undistributed earnings of foreign subsidiaries, such undistributed earnings being permanently reinvested.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of January 1, 2007, the Company adopted FIN48 "Accounting for uncertainty in income tax". Under FIN48, the measurement of a tax position that meets the more-likely-that-not recognition threshold must take into consideration the amounts and probabilities of the outcomes that could be realized upon ultimate settlement using the facts, circumstances and information available at the reporting date.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-15 Research and development costs</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Research and development costs are recorded as an expense in the period in which they are incurred.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The French government provides tax credits to companies for annual increased spending for innovative research and development. Income tax benefits correspond to these French research tax credits, which are credited against income taxes payable in each of the four years after being incurred or, if not utilized, are recoverable in cash. As of December 31, 2008, EDAP TMS had total research tax credits receivable of &#128;701 thousand.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-11</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:3pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-16 Advertising costs</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Advertising costs are recorded as an expense in the period in which they are incurred.  Advertising costs amounted to &#128;1,408 thousand, &#128;831 thousand and &#128;584 thousand for the years ended December 31 2008, 2007 and 2006 respectively.</font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-17 Foreign currency translation and transactions</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><i><font size=2>Translation of the financial statements of consolidated companies</font></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The reporting currency of EDAP TMS S.A. for all years presented, is the euro (&#128;).  The functional currency of each subsidiary is its local currency. In accordance with Statement of Financial Accounting Standards No. 52, all accounts in the financial statements are translated into euro from the functional currency at exchange rate as follows:</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:3.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>assets and liabilities are translated at year-end exchange rates;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="4%" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:3.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>shareholders&#146; equity is translated at historical exchange rates (as of the date of contribution);</font></p> </td> </tr></table>



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    <tr>
        <td width="4%" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:3.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>statement of income items are translated at average exchange rates for the year; and</font></p> </td> </tr></table>



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    <tr>
        <td width="4%" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:3.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>translation gains and losses are recorded in a separate component of shareholders&#146; equity.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><font size=2>Foreign currencies transactions</font></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Transactions involving foreign currencies are translated into the functional currency using the exchange rate prevailing at the time of the transactions. Receivables and payables denominated in foreign currencies are translated at year-end exchange rates. The resulting unrealized exchange gains and losses are carried to the statement of income.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-18 Earnings per share</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share reflects potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. The dilutive effects of the Company&#146;s common stock options and warrants is determined using the treasury stock method to measure the number of shares that are assumed to have been repurchased using the average market price during the period, which is converted from U.S. dollars at the average exchange rate for the period.</font></p>

<p style=' margin-bottom:0pt; margin-top:3pt;text-align:justify;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-19 Derivative instruments</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Financial Accounting Standards Board Statement No. 133 &#145;&#145;Accounting for Derivative Instruments and Hedging Activities&#146;&#146; (&#145;&#145;SFAS 133&#146;&#146;) requires the Company to recognize all of its derivative instruments as either assets or liabilities in the statement of financial position at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, the Company must classify the hedging instrument, based upon the exposure being hedged, as fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation.</font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>Gains and losses from derivative instruments are recorded in the income statement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-12</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-20 Employee stock option plans</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>At December 31, 2008, the Company had five stock-based employee compensation plans. The Company adopted SFAS 123R, &#147;Share-Based Payment&#148;, effective January 1, 2006. SFAS 123R requires the recognition of fair value of stock compensation as an expense in the calculation of net income (loss). </font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>The fair value of each stock option granted during the year is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:</font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>


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        <td width="56%" valign=bottom style=' height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black .5pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Year Ended December 31,</font></b></p> </td> </tr>
    <tr style='height:15.75pt'>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="15%" valign=bottom style='border-bottom: solid black .5pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b><font size=2><sup>(1)</sup></font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b><font size=2><sup>(1)</sup></font></p> </td> </tr>
    <tr style='height:13.25pt'>
        <td width="56%" valign=bottom style=' height:13.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted-average expected life (years) </font>                             </p> </td>
        <td width="15%" valign=bottom style='height:13.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="13%" valign=bottom style=' height:13.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10</font></p> </td>
        <td width="13%" valign=bottom style=' height:13.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="56%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Expected volatility rates</font>                 </p> </td>
        <td width="15%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>75%</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="56%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Expected dividend yield </font>              </p> </td>
        <td width="15%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="56%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Risk-free interest rate </font>                            </p> </td>
        <td width="15%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4.4%</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="56%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted-average exercise price (&#128;)</font>                                         </p> </td>
        <td width="15%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.99</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="56%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted-average fair value of options granted during the year (&#128;)</font>                         </p> </td>
        <td width="15%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.43</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#151;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><font size=2><sup>(1) The Company did not make any grants during the years ended December 31, 2006 and 2008. </sup></font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-21 Convertible debentures and detachable warrants</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><u><font size=2>Convertible Debentures</font></u></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On October 29, 2007, the Company issued $20 million in aggregate principal amount of non-secured, convertible debentures with detachable warrants. See Note 14 for further discussion. At the inception date, the Company elected to measure the instrument and the embedded derivatives in their entirety at fair value, with changes in fair value reported in the income statement under financial income, pursuant to &sect;16 of SFAS 133, as amended by SFAS 155. Thus, the convertible debentures together with their embedded derivatives are recorded as a liability, with subsequent changes in fair value recorded in financial income and expenses. The Company used a binomial valuation model to measure the fair value of the Investor Warrants and a binomial valuation model with a Company specific credit spread to measure the fair value of the convertible debentures.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; margin-left:4.16%; text-indent:4.16%;text-align:justify;'><u><font size=2>Warrants:</font></u></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As part of the October 2007 $20 million issuance of the 9% Senior Convertible Debentures, we issued warrants to both the investors in the convertible debentures and to the bank that assisted us as the Placement Agent. See Note 14 for further discussion. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In accordance with EITF 00-19, the warrants issued to the investors in the convertible debentures (&#147;Investor Warrants&#148;) and the Placement Agent (&#147;Placement Agent Warrants&#148;) are classified as a liability because the Company may be required to net-cash and settle them upon the occurrence of certain events outside the control of the Company. We accounted for the Investor Warrants based on their fair value at inception date, with subsequent changes in fair value recorded as financial earnings (or loss) as each balance sheet date. We used a binomial pricing model to determine the fair value of the Investor Warrants: the binomial model was developed to capture the specific nature of this instrument, and in particular the possibility the holder may exercise the call option at any time from the inception date. The application of </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-13</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>the model to the warrants therefore requires the use of subjective assumptions, including historical share price volatility, the expected life of the warrants and our risk-free interest rate, and the liquidity discount factor. A change in one or more of these assumptions could result in a material change to the estimated fair value of the vested warrants.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The warrants issued to the Placement Agent as partial consideration for placing the convertible debentures recorded as a liability, with changes in fair value at each balance sheet date reflected in financial income. We used the Black-Scholes option-pricing model to determine the fair value of the Placement Agent Warrants. The application of the model to the warrants at inception date therefore required the use of subjective assumptions, including historical share price volatility, the expected life of the warrants and our risk-free interest rate.</font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-22 Leases and Sales and leaseback transactions</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>In accordance with SFAS 13, Accounting for Leases, we classify all leases at the inception date as either a capital lease or an operating lease. A lease is a capital lease if it meets any one of the following criteria; otherwise, it is an operating lease:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Ownership is transferred to the lessee by the end of the lease term;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The lease contains a bargain purchase option;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The lease term is at least 75% of the property's estimated remaining economic life;</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date.</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:4.16%;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>We enter into sale and leaseback transactions from time to time. In accordance with SFAS 13 and EITF 93-8, any profit or loss on the sale is deferred and amortized prospectively over the term of the lease, in proportion to the leased asset if a capital lease, or in proportion to the related gross rental charged to expense over the lease term, if an operating lease.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>1-23 New accounting pronouncements</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In February, 2008, the FASB issued FASB Staff Position (&#147;FSP&#148;) FASB 157-2, &#147;Effective Date of FASB Statement No. 157.&#148; This FSP delays the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The effective date for nonfinancial assets and nonfinancial liabilities has been delayed by one year to fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Company has not completed its analysis of the potential impact of the adoption of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities (effective January 1, 2009) on the Company&#146;s financial position and results of operations. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In March 2008, the FASB issued SFAS No. 161 (SFAS 161), &#147;Disclosures about Derivative Instruments and Hedging Activities.&#148;  SFAS 161 amends and expands the disclosure requirements of SFAS No. 133, &#147;Accounting for Derivative Instruments and Hedging Activities&#148;, and is effective for fiscal years beginning after November 15, 2008. The Company has not determined yet the effect on consolidated financial statements, if any, upon adoption of SFAS 161.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-14</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In April 2008, the FASB issued FASB Staff Position (&#147;FSP&#148;) SFAS No. 142-3, &#147;</font><i><font size=2>Determination of the Useful Life of Intangible Assets&#148;</font></i><font size=2>. This FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, </font><i><font size=2>&#147;Goodwill and Other Intangible Assets&#148; </font></i><font size=2>(&#147;SFAS 142&#148;). The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141R, and other GAAP. This FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those
fiscal years. Early adoption is prohibited. The Company has not determined yet the effect on consolidated financial statements, if any, upon adoption of SFAS 142-3.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In May 2008, the FASB issued Staff Position FSP APB 14-1 (FSP APB 14-1), &#147;Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement).&#148;  FSP APB 14-1 requires companies that have issued convertible debt that may be settled wholly or partly in cash when converted, to account for the debt and equity components separately.  The value assigned to the bond liability is the estimated value of a similar bond without the conversion feature as of the issuance date.  The difference between the proceeds for the convertible debt and the amount reflected as a bond liability is recorded as additional paid-in-capital.  Interest expense is recorded using the issuer&#146;s comparable debt rate.  FSP APB 14-1 is effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years and will require
retrospective application</font><font color="#008000"><font size=2>. </font></font><font size=2>The Company does not expect that this will have a significant impact on its consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In June 2008, the FASB issued Financial Accounting Standards Board Staff Position EITF 03-6-1, </font><i><font size=2>Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities </font></i><font size=2>(&#147;FSP EITF 03-6-1&#148;). The FSP provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method in accordance with SFAS 128, Earnings per Share. The FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. Upon adoption, the Company is required to retrospectively adjust its earnings per share data to conform with the provisions in this FSP. Early
application of this FSP is prohibited. The Company has not determined yet the effect on consolidated financial statements, if any, upon adoption of FSP EITF 03-6-1.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><b><font size=2>2&#151;CASH EQUIVALENTS AND SHORT TERM INVESTMENTS </font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:left;'><font size=2>Cash and cash equivalents are comprised of the following:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:15.95pt'>
        <td width="74%" style='padding:0in 3.5pt 0in 3.5pt;height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='padding:0in 3.5pt 0in 3.5pt; height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b></p> </td> </tr>
    <tr style='height:15.95pt'>
        <td width="74%" style='padding:0in 3.5pt 0in 3.5pt;height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr style='height:15.95pt'>
        <td width="74%" style='padding:0in 3.5pt 0in 3.5pt;height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total cash and cash equivalents</font>                    </p> </td>
        <td width="13%" style='border-bottom:solid black .5pt; padding:0in 3.5pt 0in 3.5pt; height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>13,827</font></p> </td>
        <td width="12%" style='border-bottom:solid black .5pt; padding:0in 3.5pt 0in 3.5pt; height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>17,523</font></p> </td> </tr>
    <tr style='height:15.95pt'>
        <td width="74%" style='padding:0in 3.5pt 0in 3.5pt;height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Short term investments</font>                     </p> </td>
        <td width="13%" style='border-bottom:solid black .5pt; padding:0in 3.5pt 0in 3.5pt; height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,143</font></p> </td>
        <td width="12%" style='border-bottom:solid black .5pt; padding:0in 3.5pt 0in 3.5pt; height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,089</font></p> </td> </tr>
    <tr style='height:15.95pt'>
        <td width="74%" style='padding:0in 3.5pt 0in 3.5pt;height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total cash and cash equivalents, and short term investments</font>             </p> </td>
        <td width="13%" style='border-bottom:double black 2.25pt; padding:0in 3.5pt 0in 3.5pt; height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>14,970</font></p> </td>
        <td width="12%" style='border-bottom:double black 2.25pt; padding:0in 3.5pt 0in 3.5pt; height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>18,611</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-15</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>3&#151;TRADE ACCOUNTS AND NOTES RECEIVABLE, NET</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr >
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="57%" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:5pt;margin-bottom:.0001pt'><font size=2>Trade accounts and notes receivable consist of the following:</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr style='height:15.95pt'>
        <td  width="0%">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" style='padding:0in 3.5pt 0in 3.5pt; height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='padding:0in 3.5pt 0in 3.5pt; height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b></p> </td> </tr>
    <tr style='height:15.95pt'>
        <td  width="0%">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" style='padding:0in 3.5pt 0in 3.5pt; height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:15.95pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td  width="0%">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Trade accounts receivable</font>    </p> </td>
        <td width="13%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>15,214</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11 370</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td  width="0%">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Notes receivable</font>       </p> </td>
        <td width="13%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>189</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>242</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td  width="0%">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Less: allowance for doubtful accounts </font>                                  </p> </td>
        <td width="13%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(792)</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(735)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td  width="0%">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total </font>                 </p> </td>
        <td width="13%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>14,611</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10 877</font></p> </td> </tr>
    <tr>
        <td width="0" ></td>

        <td width="47" ></td>

        <td width="346" ></td>

        <td width="54" ></td>

        <td width="81" ></td>

        <td width="75" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>Notes receivable usually represent commercial bills of exchange (drafts) with initial maturities of 90 days or less. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>Bad debt expenses amount to &#128;149 thousand, &#128;131 thousand and &#128;86 thousand, for the years ended December 31, 2008, 2007, and 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><b><font size=2>4&#151;OTHER RECEIVABLES</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Other receivables consist of the following:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Value-added taxes receivable</font>                                      </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>226</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>420</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Research and development tax credit receivable from the French State </font>            </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>701</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>222</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Personnel advances</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>41</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>353</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Other receivables from the French State </font>                           </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>100</font></p> </td> </tr>
    <tr style='height:15.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Others </font>         </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(23)</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>54</font></p> </td> </tr>
    <tr style='height:16.5pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total </font>                 </p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>951</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:16.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1 149</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>At the end of 2007, Personnel advances included &#128;300 thousand related to the severance package of a former senior executive. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>5&#151;INVENTORIES</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Inventories consist of the following:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Components, spare parts </font>        </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,541</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,751</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Work-in-progress </font>                                              </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>592</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>688</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Finished goods</font>             </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>302</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>888</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total gross inventories</font>                    </p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,435</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,327</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Less: provision for slow-moving inventory </font>          </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,412)</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,021)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total </font>                 </p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,023</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,306</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-16</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The provision for slow moving inventory relates to components and spare parts. The allowance for slow moving inventory, the changes in which are classified within cost of sales, amounted to &#128;390 thousand, &#128;288 thousand and &#128;388 thousand for the years ended December 31, 2008, 2007 and 2006, respectively.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>6&#151;OTHER ASSETS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Other assets consist of the following:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deferred financing costs , current portion</font>                    </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>470</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>470</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Other prepaid expenses, current portion</font>                             </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>439</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>465</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total</font>                    </p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>909</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>935</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Deferred financing costs , non-current</font>                                     </p> </td>
        <td width="12%" style='border-bottom:double black 2.25pt; padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,330</font></p> </td>
        <td width="12%" style='border-bottom:double black 2.25pt; padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,800</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Deferred financing costs related to the debentures issued in the October 2007 private placement are being amortized over five years, the duration of the debt. The amortization of deferred financing costs, which is classified as financial expense, net, amounted to &#128;470 thousand and &#128;78 thousand, for the years ended December 31, 2008 and 2007, respectively.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>7&#151;PROPERTY AND EQUIPMENT, NET</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Property and equipment consist of the following:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Equipment</font>                                       </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,839</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,222</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Furniture, fixture, and fittings and other </font>                            </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,884</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,541</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total gross value </font>                                                </p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10,723</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10,763</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Less: accumulated depreciation and amortization</font>                              </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(6, 960)</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(6,583)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total </font>                 </p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,763</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,180</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Depreciation and amortization expense related to property and equipment amounted to &#128;1,273 thousand, to &#128;1,180 thousand and &#128;1,200 thousand for the years ended December 31, 2008, 2007 and 2006, respectively.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Capitalized costs on equipment held under capital leases of &#128;2,945 thousand and &#128;2,517 thousand and are included in property and equipment at December 31, 2008 and 2007, respectively. Accumulated amortization of these assets leased to third parties was &#128;1,531 thousand and &#128;1,159 thousand, at December 31, 2008 and 2007, respectively. Amortization expense on assets held under capital leases is included in total amortization expense and amounted to &#128;372 thousand, &#128;374 thousand and &#128;277 thousand for the years ended December 31, 2008, 2007 and 2006, respectively.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-17</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><b><font size=2>8&#151;GOODWILL AND INTANGIBLE ASSETS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As discussed in Note 1-11, the Company adopted SFAS 142, &#145;&#145;Goodwill and Other Intangible Assets&#146;&#146;, on January 1, 2002. SFAS 142 requires that goodwill and other intangible assets that have indefinite lives not be amortized but instead be tested at least annually for impairment, or more frequently when events or change in circumstances indicate that the asset might be impaired, by comparing the carrying value to the fair value of the reporting unit to which they are assigned. The Company considers its SFAS 131 operating segment &#151; High Intensity Focused Ultrasound (HIFU) and Urology Devices and Services (UDS) &#151; to be its reporting units for purposes of testing for impairment, as the components within each operating segment have similar economic characteristics and thus do not represent separate reporting units. Goodwill amounts to &#128;1,767 thousand for the
UDS division and to &#128;645 thousand for the HIFU division, at December 31, 2008.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Company completed the required annual impairment test in the fourth quarter of 2008. To determine the fair value of the Company&#146;s reporting units, the Company used the discounted cash flow approach for each of the two reportable units. The main assumptions used are the following: (i) a five-year business plan approved by management in late 2008 and revised in early 2009, (ii) a discount rate of 14% for HIFU, 12.5% for UDS, (iii) a residual value specific to each segment. In both cases, the fair value of the reporting unit was in excess of the reporting unit's book value, which resulted in no goodwill impairment.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>A one percentage point increase in the HIFU discount rate assumed in the impairment testing would not lead the company to record an impairment charge. Similarly, a one percentage point increase in the UDS discount rate assumed in the impairment testing would not lead the company to record an impairment charge.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><font size=2>Intangible assets consist of the following:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Licenses</font>                                                 </p> </td>
        <td width="12%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>356</font></p> </td>
        <td width="12%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>532</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Trade name and trademark </font>                                                 </p> </td>
        <td width="12%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>531</font></p> </td>
        <td width="12%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>539</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Patents </font>     </p> </td>
        <td width="12%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>412</font></p> </td>
        <td width="12%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>412</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Organization costs </font>                                         </p> </td>
        <td width="12%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>363</font></p> </td>
        <td width="12%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>363</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total gross value </font>                                                </p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1 662</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1 846</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Less: accumulated amortization </font>                       </p> </td>
        <td width="12%" style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1 560)</font></p> </td>
        <td width="12%" style='height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1 767)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total </font>                 </p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>102</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>79</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2> Amortization expenses related to intangible assets amounted to &#128;37 thousand, &#128;37 thousand and &#128;57 thousand, for the years ended December 31, 2008, 2007 and 2006, respectively. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>For the two coming years, the annual estimated amortization expense for intangible assets will be approximately &#128;60 thousand.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-18</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><b><font size=2>9&#151;TRADE ACCOUNTS AND NOTES PAYABLE</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Trade accounts and notes payable consist of the following:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Trade accounts payable</font>                </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,065</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5 066</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Notes payable</font>                   </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>981</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>595</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total</font>                    </p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,046</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5 661</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>Trade accounts payable usually represent invoices with a due date of 90 days or less. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Notes payable represent commercial bills of exchange (drafts) with initial maturities of 90 days or less.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>


<table border="0" cellspacing=0 cellpadding=0 width="33%" style=' border-collapse:collapse'>
    <tr>
        <td width="1%" valign=top style='padding:6.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="98%" valign=top style='padding:6.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>10&#151;DEFERRED REVENUES</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Deferred revenues consist of the following:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deferred revenues on maintenance contracts </font>                                               </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>384</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>217</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deferred revenue on RPP</font>          </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>40</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deferred revenue on sale of devices</font>                                                 </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>616</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>618</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Deferral of the gain on sale-lease-back transactions</font>                </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>247</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>314</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total</font>                    </p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1 286</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1 160</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Less long term portion</font>                        </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>582</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>708</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Current portion</font>              </p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>704</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>452</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>11&#151;OTHER ACCRUED LIABILITIES</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Other accrued liabilities consist of the following:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Provision for warranty costs</font>                                         </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1 114</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>874</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Value added tax payable </font>            </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>567</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>467</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Accruals for social expenses</font>                                        </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>430</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>864</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Conditional government subsidies</font>         </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>954</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>788</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Advance from debtors</font>                        </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>252</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>77</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Retirement indemnities</font>                       </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>24</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>17</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Accrued interests</font>                                                 </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>323</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Others </font>         </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>243</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>206</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total</font>                    </p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3 908</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3 293</font></p> </td> </tr></table>

<br>
<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:left;'><font size=2>At the end of 2007, accruals for social expenses include &#128;422 thousand related to the severance package of a former senior executive</font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-19</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:left;'><font size=2>Changes in the provision for warranty costs are as follows:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Beginning of year</font>                                                 </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>874</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>700</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Amount used during the year (payments) </font>                 </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(527)</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(471)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>New warranty expenses </font>               </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>768</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>645</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>End of year </font>                                </p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,114</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>874</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><b><font size=2>12&#151;LEASE OBLIGATIONS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>12-1 Capital leases</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:left;'><font size=2>The Company leases certain of its equipment under capital leases. At December 31, 2008, this equipment consists of medical devices for an amount of &#128;1,939 thousand and vehicles for an amount of        &#128;80 thousand. Future minimum lease payments under capital leases for the years ending December 31, 2008 are as follows: </font></p>


<table border="0" cellspacing=0 cellpadding=0 width="99%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:25.5pt'>
        <td width="83%" valign=bottom style=' height:25.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16%" valign=bottom style='border-bottom: solid black .5pt;height:25.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>December 31, 2008</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="83%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2009</font>                        </p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>817</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="83%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2010</font>                        </p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>703</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="83%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2011</font>                        </p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>457</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="83%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2012</font>                        </p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>220</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="83%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Thereafter</font>                                         </p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>40</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="83%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total minimum lease payments </font>                          </p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,237</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="83%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Less: amount representing interest  </font>  </p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(218)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="83%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Present value of minimum lease payments</font>                   </p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,019</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="83%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Less: current portion</font>                                 </p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>708</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="83%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Long-term portion</font>                                               </p> </td>
        <td width="16%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,311</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Interest paid under capital lease obligations was &#128;110 thousand, &#128;64 thousand, and &#128;48 thousand for the years ended December 31, 2008, 2007, and 2006, respectively. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>12-2 Operating leases </font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2008, operating leases having initial or remaining non-cancelable lease terms greater than one year consist of one lease for the facilities of TMS S.A. in Vaulx-en-Velin, France and several leases for facilities in Japan. The French lease contract has a lease term of nine years expiring at the option of the lessee at the end of a first four-year period, then a two-year and finally a three-year period, through 2011 (i.e., in 2006, 2008 or 2011). </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Future minimum lease payments for these operating leases consist of the following amounts, unless leases are otherwise cancelled by the lessees</font><font color="#FF0000"><font size=2>:</font></font></p>
<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=2><br>
</font></font></p>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="73%" rowspan=2 valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>France</font></b></p> </td>
        <td width="14%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Japan</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="12%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2009 </font>                     </p> </td>
        <td width="12%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>292</font></p> </td>
        <td width="14%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>240</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2010 </font>                     </p> </td>
        <td width="12%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>292</font></p> </td>
        <td width="14%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>159</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>2011 </font>                     </p> </td>
        <td width="12%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>292</font></p> </td>
        <td width="14%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="73%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total </font>                 </p> </td>
        <td width="12%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>876</font></p> </td>
        <td width="14%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>399</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-20</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Total rent expense under operating leases amounted to &#128;753 thousand, &#128;688 thousand and &#128;689 thousand for the years ended December 31, 2008, 2007 and 2006, respectively. These total rent expenses include the above-mentioned operating leases, but also lease expenses related to subsidiaries office rentals, office equipment and car rentals.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>13&#151;SHORT-TERM BORROWINGS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2008, short-term borrowings consist of &#128;753 thousand of account receivables factored and for which the Company is supporting the risk of uncollectibility and a loan in euro amounting to &#128;1,000 thousand with the following conditions:</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="79%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="33%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Amount</font></b></p> </td>
        <td width="26%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Maturation</font></b></p> </td>
        <td width="23%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Interest rate</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="33%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>EDAP-TMS France SAS</font></p> </td>
        <td width="16%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>1 000</font></p> </td>
        <td width="26%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>December 22, 2009</font></p> </td>
        <td width="23%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Euribor + 0,5%</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2007, short-term borrowings consist of &#128;593 thousand of account receivables factored and for which the Company is supporting the collection risk and loans in euros amounting to &#128;1,000 thousand with the following conditions:</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>


<table width="70%" border="0" align="center" cellpadding=0 cellspacing=0 style='border-collapse:collapse; '>
    <tr style='height:12.75pt'>
        <td width="77" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="77" style='border-top:solid black .5pt;border-left: none;border-bottom:solid black .5pt;border-right:none;padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Amount</font></b></p> </td>
        <td width="123" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Maturation</font></b></p> </td>
        <td width="109" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Interest rate</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="77" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>TMS SA</font></p> </td>
        <td width="77" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>225</font></p> </td>
        <td width="123" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>December 22, 2008</font></p> </td>
        <td width="109" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Euribor + 0,5%</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="77" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>EDAP SA</font></p> </td>
        <td width="77" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>258</font></p> </td>
        <td width="123" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>December 22, 2008</font></p> </td>
        <td width="109" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Euribor + 0,5%</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="77" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>EDAP SA</font></p> </td>
        <td width="77" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>207</font></p> </td>
        <td width="123" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>December 22, 2008</font></p> </td>
        <td width="109" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Euribor + 0,5%</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="77" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font SIZE=2>EDAP SA</font></p> </td>
        <td width="77" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>310</font></p> </td>
        <td width="123" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=2>December 22, 2008</font></p> </td>
        <td width="109" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Euribor + 0,5%</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="77" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total </font></p> </td>
        <td width="77" style='border-top:solid black .5pt;border-left: none;border-bottom:double black 2.25pt;border-right:none;padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>1 000</font></p> </td>
        <td width="123" style='padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="109" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>14&#151;LONG-TERM DEBT</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Long-term debt consists of the following:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="73%" rowspan=2 valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Japanese yen term loan</font>                    </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>231</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Convertible debentures carried at fair value</font>           </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,901</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,691</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Investor Warrants</font>                                              </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>392</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,141</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Placement Agent Warrants</font>                                                </p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>55</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>343</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Financial instruments carried at fair value</font>                      </p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>447</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,484</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Italy</font>                        </p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>58</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total</font>                    </p> </td>
        <td width="13%" valign=bottom style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,579</font></p> </td>
        <td width="13%" valign=bottom style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>15,232</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Less current portion </font>                                 </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(79) </font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(58) </font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="73%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total long-term portion</font>                    </p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,500</font></p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>15,174</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-21</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=2>Long-term debt at December 31, 2008 matures as follows:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="86%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2009</font>                        </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>79</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="86%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2010</font>                        </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>79</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="86%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2011</font>                        </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>73</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="86%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2012</font>                        </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,956</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="86%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>2013</font>                        </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>392</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="86%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total </font>                 </p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,579</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2008, long-term debt in Japan consists of a loan in Yen amounting to Yen30 million with a fixed interest rate at 2.87% due to mature on November 17, 2011.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2007, long-term debt in Italy consists of a loan in euro amounting to &#128;150 thousand with a quarterly variable interest rate based on Euribor + 1.375%, due to mature on September 18, 2008.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2007 and 2008, long-term in USD consists of a $20 million convertible debt with warrants, raised on October 29, 2007 through a Private Investment in Public Equity deal with selected investors &#150; see Note 1-21 on the accounting treatment of the convertible debentures and the detachable warrants.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>At inception date, the fair value of the convertible debentures and detachable warrants was $20 million. The Company has allocated the proceeds to the fair value of the debt host and the warrants.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>The $20 million convertible debt is in the form of 20,000 debentures with a face value of $1,000 and each bond is convertible into 152 shares of common stock at any time at the election of the holder, using a conversion price of $6.57, subject to standard anti-dilution adjustments. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>The debentures mature in five years (October 28, 2012) and bear an annual interest rate of 9% payable on a quarterly basis in cash or in common stock, at the option of the company (decision made every quarter) with a 10% discount price over the average market price of common stock. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>Investors in the convertible debentures also received an aggregate number of 1,680,000 detachable warrants to purchase one share of common stock for each warrant. The warrants have a six-year term and an exercise price of $6.87, subject to standard anti-dilutive adjustments. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>The company also granted to the bank acting as placement agent in the transaction warrants to purchase 188,965 shares of common stock, with a five-year term and the following exercise prices: 121,765 shares at $6.57 and 67,200 shares at $6.87.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Observable and unobservable inputs for fair value measurements:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Given the classification established by FAS157, the following table indicates each input or assumption and the level it belongs to:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="151" valign=top style='border:solid black .5pt;border-color:gray; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Input</font></b></u><u></u></p> </td>
        <td width="144" valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>FAS157 level</font></b></u><u></u></p> </td>
        <td width="291" valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Comment</font></b></u><u></u></p> </td> </tr>
    <tr>
        <td width="151" valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Share price</font></p> </td>
        <td width="144" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Level 1</font></p> </td>
        <td width="291" valign=top style='border-top:none;border-left: none;border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Quoted price directly linked to the instrument</font></p> </td> </tr>
    <tr>
        <td width="151" valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Risk free rate</font></p> </td>
        <td width="144" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Level 2</font></p> </td>
        <td width="291" valign=top style='border-top:none;border-left: none;border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Observable input</font></p> </td> </tr>
    <tr>
        <td width="151" valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Volatility</font></p> </td>
        <td width="144" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Level 3</font></p> </td>
        <td width="291" valign=top style='border-top:none;border-left: none;border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Unobservable input</font></p> </td> </tr>
    <tr>
        <td width="151" valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Credit Spread</font></p> </td>
        <td width="144" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Level 3</font></p> </td>
        <td width="291" valign=top style='border-top:none;border-left: none;border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Unobservable input</font></p> </td> </tr>
    <tr>
        <td width="151" valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Liquidity discount</font></p> </td>
        <td width="144" valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Level 3</font></p> </td>
        <td width="291" valign=top style='border-top:none;border-left: none;border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Unobservable input</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-22</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><u><font size=2>Fair Value of  Investor Warrants:</font></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.66%;text-align:justify;'><font size=2>The valuation model of Investor Warrants uses a binomial valuation model to capture the complexity of the instruments, and notably the possibility to exercise the call option at any time from the inception date.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>As of October 29, 2007, the binomial model uses the following main assumptions and parameters:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Share price at inception date: $5.95</font></p> </td> </tr></table>



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        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Strike price of warrants: $6.87</font></p> </td> </tr></table>



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        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Risk free interest rate at 6 years: 4.11%</font></p> </td> </tr></table>



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        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Share price volatility: 45%</font></p> </td> </tr></table>



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        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Liquidity discount factor: 26.91%</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>As of December 31, 2007, the binomial model uses the following main assumptions and parameters:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Share price at closing date: $4.80</font></p> </td> </tr></table>



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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Strike price of warrants: $6.87</font></p> </td> </tr></table>



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        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Risk free interest rate at 6 years: 3,55%</font></p> </td> </tr></table>



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        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Share price volatility: 75%</font></p> </td> </tr></table>



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        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Liquidity discount factor: 26.91%</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>As of December 31, 2008, the binomial model uses the following main assumptions and parameters:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Share price at closing date: $1.44</font></p> </td> </tr></table>



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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Strike price of warrants: $6.87</font></p> </td> </tr></table>



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        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Risk free interest rate at 6 years: 1,71%</font></p> </td> </tr></table>



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        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Share price volatility: 84%</font></p> </td> </tr></table>



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        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Liquidity discount factor: 37.59%</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>At inception and as of December 31, 2007, the company used a 30-day volatility to fit the monthly arbitration step of its binomial valuation model. At December 31, 2008, given the peculiar market conditions and the erratic changes in stock volatility, the company, in agreement with third-party experts, determined that a share price volatility based on the residual lifetime of the convertible instruments would be more relevant and should then be used for assessing the fair value of the instruments. Share price volatility was determined using the historical volatility methodology</font>. <font size=2>Had this method been used in 2007, the stock volatility would have been 76%.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.33%;text-align:justify;'><font size=2>On that basis, the unit fair value of Investor Warrants was $2.32 per warrant at inception date, $2.75 per warrant as of December 31, 2007, and $0.32 per warrant as of December 31, 2008. The total fair value for the 1,680,000 issued warrants was $3.890 million at inception date, $4.624 million at December 31, 2007, and  $0.545 million at December 31, 2008. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-23</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><u><font size=2>Fair Value of the Convertible Debt:</font></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.66%;text-align:justify;'><font size=2>The total fair value of the convertible debt is the aggregate of the fair value of the underlying debt host instrument and the fair value of the embedded derivative (conversion option).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.5%;text-align:justify;'><font size=2>The estimate of the fair value of the underlying debt component is obtained by using the actual interest spread the Company would have had to pay if a straight, unsecured, debt had been raised, with no additional remuneration to lenders in the form of conversion options or warrants. Before and at inception date, the Company conducted an analysis of the terms on a non-convertible, unsecured, conventional debt.  Based on this analysis, a rate of 30% has been used to assess the fair value of the debt host, which represents an interest spread of 26% over the risk-free interest rate at inception date.</font><font color="#FF0000"><font size=2> </font></font><font size=2>The present value of the debt host using an effective interest rate of 30% was $10.330 million. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.5%;text-align:justify;'><font size=2>At December 31, 2007 the fair value has been measured again considering any changes required in underlying assumptions, and mostly the risk free interest rate and the credit spread. The spread, which depends on market conditions and the Company&#146;s specific risk profile, was unchanged at December 31, 2007 as no significant change occurred in the two months following inception. The present value of the debt host at December 31, 2007 was $10.533 million. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.5%;text-align:justify;'><font size=2>At December 31, 2008 the fair value has been measured considering any changes required in underlying assumptions, and mostly the risk free interest rate and the credit spread. With the support of third-party experts, the Company determined that the spread to be used over the risk-free rate was 30.16%, in line with the increase in risk-aversion on financial markets. The present value of the debt host at December 31, 2008 was $11.083 million.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.83%;text-align:left;'><font size=2>The valuation model of the conversion option uses a binomial valuation model to capture the complexity of the instrument, and notably the continuous possibility of an arbitrage between holding common shares versus interest bearing bonds.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.83%;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.83%;text-align:left;'><font size=2>As of October 29, 2007, the binomial model uses the following main assumptions and parameters:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.83%;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Share price at inception date: $5.95</font></p> </td> </tr></table>



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        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Strike price of convertible debentures: $6.87</font></p> </td> </tr></table>



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        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Risk free interest rate at 5 years: 4.04%</font></p> </td> </tr></table>



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        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Share price volatility: 45%</font></p> </td> </tr></table>



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        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Liquidity discount factor: 26.91%</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:12.49%;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>As of December 31, 2007, the Binomial model uses the following main assumptions and parameters:</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Share price at closing date: $4.80</font></p> </td> </tr></table>



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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Strike price of warrants: $6.57</font></p> </td> </tr></table>



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    <tr>
        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Risk free interest rate at 5 years: 3,43%</font></p> </td> </tr></table>



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    <tr>
        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Share price volatility: 75%</font></p> </td> </tr></table>



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    <tr>
        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Liquidity discount factor: 26.91%</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>As of December 31, 2008, the Binomial model uses the following main assumptions and parameters:</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Share price at closing date: $1.44</font></p> </td> </tr></table>



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    <tr>
        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Strike price of warrants: $6.57</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Risk free interest rate at 5 years: 1,55%</font></p> </td> </tr></table>



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    <tr>
        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Share price volatility: 84%</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="12%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Liquidity discount factor: 37.59%</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-24</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2> EDAP TMS S.A. AND SUBSIDIARIES</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>At inception and as of December 31, 2007, the company used a 30-day volatility to fit the monthly arbitration step of its binomial valuation model. At December 31, 2008, given the peculiar market conditions and the erratic changes in stock volatility, the company, in agreement with third-party experts, determined that a share price volatility based on the residual lifetime of the convertible instruments would be more relevant and should then be used for assessing the fair value of the instruments. Share price volatility was determined using the historical volatility methodology</font>. <font size=2>Had this method been used in 2007, the stock volatility would have been 76%.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>On that basis, the fair value of the conversion option was  $5.780 million ($7.909 million before liquidity discount) at inception date, $6.677 million ($9.135 million before liquidity discount) as of December 31, 2007, and $1,305 million ($2.091 million before liquidity discount) as of December 31, 2008. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><u><font size=2>Placement Agent Warrants</font></u><font size=2>:</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As part of the transaction costs, the Company granted to the bank acting as placement agent in the transaction warrants to purchase 188,965 shares of common stock, with a five year term and the following exercise prices: 121,765 shares at $6.57 per share and 67,200 shares at $6.87 per share. The fair value of the Placement Agent Warrants has been valued using the Black-Scholes option valuation method, using a 4.04% risk free interest rate and a 75% volatility at inception date, a 3.43% risk free interest rate and a 75% stock volatility at December 31, 2007 and a 1.55% risk free interest rate and a 84% stock volatility at December 31, 2008.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>The following table summarizes the fair value of the entire indebtedness related to the convertible debentures, Investor Warrants and Placement Agent Warrants:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse; '>
    <tr style='height:28.55pt'>
        <td width="35%" valign=top style='border:solid black .5pt;border-color:gray; padding:0in 5.4pt 0in 5.4pt;height:28.55pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>In &#145;000 US Dollars</font></b></u><u></u></p> </td>
        <td width="17%" valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt; height:28.55pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Total Fair Value</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>At  inception date</font></p> </td>
        <td width="15%" valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt; height:28.55pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Total Fair Value</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>At December 31, 2007</font></p> </td>
        <td width="15%" valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt; height:28.55pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Total Fair Value</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>At December 31, 2008</font></p> </td>
        <td width="15%" valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt; height:28.55pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Change in Fair Value in USD</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2008 vs 2007</font></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td width="35%" valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Convertible debt</font></p> </td>
        <td width="17%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>16,110</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>17,210</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,388</font></p> </td>
        <td width="15%" valign=top style='border-top:none;border-left: none;border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,822)</font></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td width="35%" valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Investor Warrants</font></p> </td>
        <td width="17%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,890</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,624</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>545</font></p> </td>
        <td width="15%" valign=top style='border-top:none;border-left: none;border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,079)</font></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td width="35%" valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total</font></p> </td>
        <td width="17%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>20,000</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>21,834</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,933</font></p> </td>
        <td width="15%" valign=top style='border-top:none;border-left: none;border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(8,901)</font></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td width="35%" valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Placement Agent Warrants at $6.57</font></p> </td>
        <td width="17%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>448</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>327</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>50</font></p> </td>
        <td width="15%" valign=top style='border-top:none;border-left: none;border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(277)</font></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td width="35%" valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Placement Agent Warrants at $6.87</font></p> </td>
        <td width="17%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>244</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>177</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>27</font></p> </td>
        <td width="15%" valign=top style='border-top:none;border-left: none;border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(150)</font></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td width="35%" valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total</font></p> </td>
        <td width="17%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>20,692</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,338</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>13,010</font></p> </td>
        <td width="15%" valign=top style='border-top:none;border-left: none;border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(9,328)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.33%;text-align:left;'><font size=2>The following table reflects the impact after translation in euros:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.33%;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse; '>
    <tr style='height:30.9pt'>
        <td width="32%" valign=top style='border:solid black .5pt;border-color:gray; padding:0in 5.4pt 0in 5.4pt;height:30.9pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>In &#145;000 Euros</font></b></u><u></u></p> </td>
        <td width="15%" valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt; height:30.9pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Total Fair Value</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>At  inception date</font></p> </td>
        <td width="13%" valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt; height:30.9pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Total Fair Value</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>At December 31, 2007</font></p> </td>
        <td width="13%" valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt; height:30.9pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Total Fair Value</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>At December 31, 2008</font></p> </td>
        <td width="15%" valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt; height:30.9pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Change in Fair Value in EUR</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>(reflected in Financial income &#150; See Note 20)</font></p> </td>
        <td width="9%" valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt; height:30.9pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Exchange Rate Impact</font></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td width="32%" style='border:solid black .5pt;border-color:gray;border-top: none;padding:0in 5.4pt 0in 5.4pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Exchange Rate (USD/EUR)</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.4548</font></p> </td>
        <td width="13%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.4721</font></p> </td>
        <td width="13%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.3917</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.3917</font></p> </td>
        <td width="9%" valign=top style='border-top:none;border-left: none;border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td width="32%" style='border:solid black .5pt;border-color:gray;border-top: none;padding:0in 5.4pt 0in 5.4pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Convertible debt</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,074</font></p> </td>
        <td width="13%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,691</font></p> </td>
        <td width="13%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,901</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,465)</font></p> </td>
        <td width="9%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>675</font></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td width="32%" style='border:solid black .5pt;border-color:gray;border-top: none;padding:0in 5.4pt 0in 5.4pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Investor Warrants</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,674</font></p> </td>
        <td width="13%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,141</font></p> </td>
        <td width="13%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>392</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,931)</font></p> </td>
        <td width="9%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>182</font></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td width="32%" style='border:solid black .5pt;border-color:gray;border-top: none;padding:0in 5.4pt 0in 5.4pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>13,748</font></p> </td>
        <td width="13%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>14,832</font></p> </td>
        <td width="13%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,293</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(6,395)</font></p> </td>
        <td width="9%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>857</font></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td width="32%" style='border:solid black .5pt;border-color:gray;border-top: none;padding:0in 5.4pt 0in 5.4pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Placement Agent Warrants </font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>476</font></p> </td>
        <td width="13%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>343</font></p> </td>
        <td width="13%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>55</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(307)</font></p> </td>
        <td width="9%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>19</font></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td width="32%" style='border:solid black .5pt;border-color:gray;border-top: none;padding:0in 5.4pt 0in 5.4pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>14,224</font></p> </td>
        <td width="13%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>15,174</font></p> </td>
        <td width="13%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,348</font></p> </td>
        <td width="15%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(6,703)</font></p> </td>
        <td width="9%" style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>877</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-25</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>15&#151;OTHER LONG-TERM LIABILITIES</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Other long-term liabilities consist of the following:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Provision for retirement indemnities</font>   </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>771</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>652</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Other</font>                  </p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>51</font></p> </td>
        <td width="12%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>51</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="74%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total </font>                 </p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>822</font></p> </td>
        <td width="12%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>703</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Pension, post-retirement, and post-employment benefits for most of the Company&#146;s employees are sponsored by European governments. The Company&#146;s liability with respect to these plans is mostly limited to specific payroll deductions. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In addition to government-sponsored plans, certain subsidiaries in Japan and France have defined benefit retirement indemnity plans in place. The provision for retirement indemnities at December 31, 2008 represents an accrual for lump-sum retirement indemnity payments to be paid at the time an employee retires. The largest part of this liability relates to employees in France. This provision has been calculated taking into account the estimated payment at retirement (discounted to the current date), turnover and salary increases. Calculations have been performed by an actuary consultant.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:left;'><font size=2>A labor regulation evolution in France may have an impact of &#128;170 thousand on the accrual. At December 31, 2008, the Company does not consider this risk as probable. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The actuarial assumptions as of year-end are as follows:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Pension Benefits &#150; France</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Discount rate</font>                        </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5.50%</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5.50%</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4.50%</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Salary increase</font>                </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.50%</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.50%</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.00%</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Retirement age</font>                 </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>65</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>65</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>65</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Average retirement remaining service period</font>     </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>26</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>27</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>26</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Pension Benefits &#150; Japan</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Discount rate</font>                        </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.25%</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.50%</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.75%</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Salary increase</font>                </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.80%</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.80%</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.80%</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-26</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The reconciliation between projected benefit obligations and the accumulated benefit obligations is as follows as of December 31, 2008 (in thousands of euros): </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="6%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>France</font></b></p> </td>
        <td width="12%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Japan</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="6%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Projected benefit obligation</font>                                             </p> </td>
        <td width="6%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>256</font></p> </td>
        <td width="12%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>392</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Normal cost</font>                                </p> </td>
        <td width="6%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22</font></p> </td>
        <td width="12%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>47</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="68%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Accumulated benefit obligation</font>                        </p> </td>
        <td width="6%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>173</font></p> </td>
        <td width="12%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>342</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Provision presentation according to FAS 158 in euro:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="76%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="11%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>France</font></b></p> </td>
        <td width="13%" style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Japan</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="76%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Non current liabilities</font>                              </p> </td>
        <td width="11%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>255 877</font></p> </td>
        <td width="13%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>367 273</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="76%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Current liabilities</font>      </p> </td>
        <td width="11%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#8722;</font></p> </td>
        <td width="13%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>24 028</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="76%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Non current asset</font></p> </td>
        <td width="11%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#8722;</font></p> </td>
        <td width="13%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#8722;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="76%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Accumulated other comprehensive income</font>             </p> </td>
        <td width="11%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>44 529</font></p> </td>
        <td width="13%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(157 862)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="76%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total </font>                 </p> </td>
        <td width="11%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>300 406</font></p> </td>
        <td width="13%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>233 439</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Detailed reconciliation of pension cost components (in thousands of euros) during fiscal year ending December 31, 2008: </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>


<table width="100%" border="0" cellpadding=0 cellspacing=0 style='border-collapse:collapse; '>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>France</font></b></p> </td>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Change in benefit obligations</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Benefit obligations at beginning of year</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>240</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>218</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>229</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Service cost</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>23</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>22</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>23</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Interest cost</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>13</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>10</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>9</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Plan amendments</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(gain) / loss</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(20)</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(7)</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(44)</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Benefits paid</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(3)</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Benefit obligations at end of year</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>256</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>240</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>218</font></b></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Change in plan assets</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Fair value of plan assets at beginning of year</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Employer contribution</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Return on plan assets</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Benefits paid</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(3)</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Fair value of plan assets at end of year</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Unrecognized actuarial (gain) loss</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(45)</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(24)</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(17)</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Unrecognized prior service cost</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Accrued pension cost</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>300</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>264</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>235</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-27</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=1>&nbsp;</font></p>


<table width="100%" border="0" cellpadding=0 cellspacing=0 style='border-collapse:collapse; '>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><B><font SIZE=2>JAPAN</font></B></p> </td>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Change in benefit obligations</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Benefit obligations at beginning of year</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>278</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>239</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>262</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Service cost</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>44</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>31</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>32</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Interest cost</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>5</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>4</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>3</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Plan amendments</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Termination benefits</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(gain) / loss</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>35</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(16)</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(3)</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Benefits paid</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(57)</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(25)</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Exchange rate impact</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>87</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>20</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>(30)</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Benefit obligations at end of year</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>392</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>278</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>239</font></b></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Change in plan assets</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Fair value of plan assets at beginning of year</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Employer contribution</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Return on plan assets</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Benefits paid</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Fair value of plan assets at end of year</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Unrecognized actuarial (gain) loss</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>158</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>104</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>101</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Unrecognized prior service cost</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td valign=top style='border:solid black .5pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>Accrued pension cost</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>233</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
      <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>174</font></b></p> </td>
        <td valign=top style='border-top:none;border-left:none; border-bottom:solid black .5pt;border-right:solid black .5pt;  padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>138</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-28</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>16&#151;SHAREHOLDERS&#146; EQUITY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>16-1 Common stock</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2008, EDAP TMS S.A.&#146;s common stock consisted of 10,006,333 issued shares, fully paid, and with a par value of &#128;0.13 each. 9,582,593 of the shares were outstanding.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>16-2 Pre-emptive subscription rights </font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Shareholders have preemptive rights to subscribe on a </font><i><font size=2>pro rata</font></i><font size=2> basis for additional shares issued by the Company for cash. Shareholders may waive such preemptive subscription rights at an extraordinary general meeting of shareholders under certain circumstances. Preemptive subscription rights, if not</font><font color="#FF0000"><font size=2> </font></font><font size=2>previously waived, are transferable during the subscription period relating to a particular offer of shares.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>16-3 Dividend rights</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Dividends may be distributed from the statutory retained earnings, subject to the requirements of French law and the Company&#146;s by-laws. The Company has not distributed any dividends since its inception. Distributable statutory retained earnings amounted to &#128;22,955 thousand and &#128;25,396 thousand at December 31, 2008 and 2007, respectively. Dividend distributions, if any, will be made in euros. The Company has no plans to distribute dividends in the foreseeable future.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>16-4 Treasury stock</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2008, the 423,740 shares of treasury stock consisted of (i) 21,400 shares acquired on December 2, 1996 for &#128;85 thousand, (ii) 352,800 shares acquired between August and December 1998 for &#128;1,016 thousand, and (iii) 49,540 shares acquired in June and July 2001 for &#128;150 thousand. All 423,740 shares of treasury stock have been acquired to cover outstanding stock options (see Note 15-5). </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>16-5 Stock-option plans</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 31, 2008, EDAP TMS S.A. sponsored five stock purchase and subscription option plans: </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On December 2, 1996, the shareholders of EDAP TMS S.A. authorized the Board of Directors to grant up to 177,750 options to purchase pre-existing Shares and 156,625 options to subscribe for newly issued Shares at a fixed exercise price of &#128;6.97 per share. The authorization to grant the options expired at the end of the five-year period beginning December 2, 1996. On February 7 and March 3, 1997, the Board of Directors granted the 177,750 options to buy pre-existing Shares and 134,750 of the options to subscribe for newly issued Shares to 10 employees. 25% of the options were exercisable as of the date of grant and the right to exercise the remaining 75% of the options vested at the rate of 25% each January 1 following the date of grant. The options expired five years after the date of grant. On October 29, 1998, the Board of Directors amended the terms of 124,125 of the options to
conform to the terms of the 1998 option plan discussed below. This stock purchase plan is no longer valid as the related stock options contracts have expired. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-29</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On May 14, 1998, the shareholders of EDAP TMS S.A. authorized the Board of Directors to grant up to 713,425 options to purchase pre-existing Shares at a fixed exercise price to be set by the Board of Directors at the time of grant provided that the exercise price may not be less than the average stock market price of the Shares over the 20 business days preceding the date of grant. The shareholders also authorized the Board of Directors to cause EDAP TMS S.A. to repurchase up to 535,675 of its own Shares (treasury stock) to cover the options granted under the new plan. The authorization to grant the options expired one year after the completion of the share repurchase program, which was completed in December 1998. Up to 279,000 of the 713,425 options were reserved for modifications to the terms of pre-existing options. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On October 29, 1998, the Board of Directors granted 327,000 options to French employees meeting certain tenure criteria. The exercise price was fixed at &#128;3.81 per Share for 152,000 options and &#128;1.83 per Share for 175,000 options; both exercise prices were not less than the average stock market price of the Shares over the 20 business days preceding the date of grant and also exceeded the market price of the Shares on the date of grant. The options were to begin vesting two years after the date of grant and were fully vested as of January 1, 2002 (i.e., four years and two months after the date of grant). Shares acquired pursuant to the options cannot be sold prior to five years from the date of grant. The options expired on December 31, 2008 (i.e., ten years and two months after the date of grant) or when employment with the Company ceases, whichever occurs earlier. As noted
above, on October 29, 1998, the Board of Directors amended the terms of 124,125 of the options granted in 1997 to conform to the terms of the 1998 stock option plan.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Conforming to the 1998 stock option plan, on January 4, 1999, the Board of Directors granted 24,000 options to French employees meeting certain tenure criteria. The exercise price was fixed at &#128;3.81 per Share for 11,000 options and &#128;1.83 per Share for 13,000 options. The options were to begin vesting two years after the date of grant and were fully vested as of January 1, 2002 (i.e., three years after the date of grant). Shares acquired pursuant to the options cannot be sold prior to five years from the date of grant. The options expired on December 31, 2008 (i.e., ten years after the date of grant) or when employment with the Company ceases, whichever occurs earlier. On March 15, 1999, the Board of Directors granted 60,000 options to certain employees of the Company; 40,000 options were granted with an exercise price of &#128;3.81 and 20,000 options at an exercise price of
&#128;2.74. Exercise prices corresponding to options granted on these two dates were not less than the average stock market price of the Shares over the 20 business days preceding the date of grant. Among these options granted on March 15, 1999: 50,000 were to begin vesting two years after the date of grant and were fully vested as of June 1, 2002 (i.e. three years and two and half months after the date of grant); Shares acquired pursuant to the options cannot be sold prior to five years from the date of grant; 40,000 options expire on March 31, 2009 (i.e. ten years after the date of grant) and 10,000 options expire on December 31, 2009 (i.e. ten years and nine months after the date of grant) or when employment with the Company ceases, whichever occurs earlier. For the remaining 10,000 options, granted on March 15, 1999, 50% of the options are exercisable as of the date of grant and the right to exercise the remaining 50% of the options vested at the rate of 25% each January 1
following the date of grant. The options expired on December 31, 2003 (i.e., four years and nine months after the date of grant). </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On September 27, 1999, the Board of Directors decided to grant 2,425 options to certain employees of the Company at an exercise price of &#128;1.83, which is not less than the average stock market price of the Shares over the 20 business days preceding the date of grant. The options were to begin vesting two years after the date of grant and were fully vested as of January 1, 2003 (i.e., three years and three months after the date of grant). Shares acquired pursuant to the options cannot be sold prior to five years from the date of grant. The options expire on December 31, 2009 (i.e., ten years and three months after the date of grant) or when employment with the Company ceases, whichever occurs earlier.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-30</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On June 12, 2001, the shareholders of EDAP TMS S.A. authorized the Board of Directors to grant up to 300,000 options to purchase pre-existing Shares and 80,000 options to subscribe to new Shares, at a fixed exercise price to be set by the Supervisory Board. Conforming this plan, on September 25, 2001, the Board of Directors granted 307,115 options to purchase Shares (among which 33,540 options were related to the plan authorized by the shareholders on June 24, 1999) and granted 80,000 options to subscribe to new Shares to employees of the Company meeting certain tenure criteria. The exercise price was fixed at U.S.$1.92 (&#128;2.08) per share. Options were to begin vesting one year after the date of grant and will be fully vested as of September 25, 2005. Shares acquired pursuant to the options cannot be sold prior to four years from the date of grant. The options expire on September 25,
2011 (i.e., ten years after the date of grant) or when employment with the Company ceases, whichever occurs earlier.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On March 21, 2002, a Member of the Management Board exercised his option to subscribe to 47,421 new Shares (out of the 86,885 options to subscribe to new Shares authorized on June 24, 1999) at an exercise price of U.S.$1.561 (&#128;1.76). The capital of the Company was thus increased from &#128;1,081 thousand to &#128;1,087 thousand and the number of Shares issued increased from 8,315,400 to 8,362,821.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On June 18, 2002, conforming the June 12, 2001 stock option plan, the Board of Directors granted the remaining 26,425 options to French employees meeting certain tenure criteria. The exercise price was fixed at U.S.$1.92 (&#128;2.02) per share. Options were to begin vesting one year after the date of grant and will be fully vested as of June 18, 2006 (i.e., four years after the date of grant). Shares acquired pursuant to the options cannot be sold prior to four years from the date of grant. The options expire on June 18, 2012 (i.e., ten years after the date of grant) or when employment with the Company ceases, whichever occurs earlier. All Shares that may purchased through the exercise of stock options are currently held as treasury stock.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On January 29, 2004, the shareholders of EDAP TMS S.A. authorized the Board of Directors to grant up to 240,000 options to purchase pre-existing Shares and 100,000 options to subscribe to new Shares, to employees of the Company meeting certain tenure criteria, at a fixed exercise price to be set by the Board of Directors. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Conforming to this stock option plan, on February 24, 2004, the Board of Directors granted 225,000 options to purchase pre-existing Shares to certain employees of EDAP TMS. The exercise price was fixed at &#128;2.60 per share. Options were to begin vesting one year after the date of grant and will be fully vested as of February 24, 2008 (i.e., four years after the date of grant). Shares acquired pursuant to the options cannot be sold prior to four years from the date of grant. The options expire on February 24, 2014 (i.e., ten years after the date of grant) or when employment with the Company ceases, whichever occurs earlier. All Shares that may be purchased through the exercise of stock options are currently held as treasury stock. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On February 24, 2004, the Board of Directors granted 100,000 options to subscribe to new Shares to the Chief Executive Officer of EDAP S.A. and TMS S.A. The exercise price was fixed at &#128;1.28 per share. All options were to begin vesting one year after the date of grant. Shares acquired pursuant to the options cannot be sold prior to four years from the date of grant. The options expire on February 24, 2014 (i.e., ten years after the date of grant) or when employment with the Company ceases, whichever occurs earlier.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On January 28, 2005, the Board of Directors granted 15,000 options to purchase pre-existing Shares to certain employees of EDAP TMS. The exercise price was fixed at &#128;2.78 per share. 3,750 options were to begin vesting on December 31, 2005 and 11,250 on December 31, 2006. The options expire on January 28, 2015 (i.e., ten years after the date of grant) or when employment with the Company ceases, whichever occurs earlier. All Shares that may be purchased through the exercise of stock options are currently held as treasury stock. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-31</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On February 17, 2005, the shareholders of EDAP TMS S.A. authorized the Board of Directors to grant up to 625,000 free shares to be issued to certain employees of the Company, subject to compliance with the conditions and performance criteria fixed by the Board of Directors. On March 30, 2005, 500,900 rights to subscribe to free shares were granted to by the Board of Directors, based on certain performances and criteria to be met for years 2005 and 2006. However, given the shift of business model, during 2005, from the sales of Ablatherm equipment towards the sales of treatment procedures (RPPs), the Board of Directors decided to modify the conditions and performance criteria to be met by employees, to reflect the new business model. Therefore, on January 6, 2006, the Board of Directors cancelled the Free Performance Share Plan approved on March 30, 2005 and set up a new Plan with
performance criteria based on the new RPP business model for years 2006 and 2007, in accordance with the Performance Stock plan approved by the shareholders. On January 6, 2006, 564.100 rights to subscribe to new shares were distributed, including new entrants, subject to the achievement of certain milestones in the years 2006 and 2007. On July 3, 2006, 13,800 rights to subscribe to new shares were distributed to new entrants, subject to the achievement of certain milestones in the years 2006 and 2007. As of December 31, 2006, none of the milestones for the year 2006 have been reached. As of December 31, 2006, only 524,900 rights were still in force due to employees&#146; departure. This plan is accounted for in compliance with FASB 123-(R). On March 8, 2007, a revised business model was approved by the Board of Directors for years 2007 and 2008. On that date, 47,100 rights to subscribe to new shares were granted to new entrants, subject to the achievement of certain milestones based
on the revised 2007-2008 business model. As of December 31, 2007 none of the milestones for the year 2007, fixed by the January 6, 2006 Board of Directors, have been reached, and only one milestone fixed by the March 8, 2007 Board of Directors, has been reached, thus triggering allocation of 7,065 new shares to some employees. As per the Performance Stock Plan approved on March 8, 2007, these shares will only be issued on July 2009. As of December 31, 2007, 211,435 rights to subscribe to new shares, based on these fixed performance criteria for the year 2007 were then cancelled and these shares will then never be subscribed and issued. As of December 31, 2007, only 18,840 rights out of the 625,000 initially granted were still in force, based on 2008 milestones. As of December 31, 2008, only one milestone, out of four milestones fixed by the Board of Directors on March 8, 2007, was reached on 2008 performance goals, thus triggering the allocation of 4,710 new shares to some employees.
A total of 11,775 new shares will then be issued in July 2009 conforming the March 8, 2007 plan. As of December 31, 2008, no more right to subscribe to new shares were valid.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>On May 22, 2007, the shareholders of EDAP TMS S.A. authorized the Board of Directors to grant up to 600,000 options to subscribe to 600,000 new Shares and up to 105,328 options to purchase pre-existing Shares at a fixed price to be set by the Board of Directors. All of the 105,328 Shares that may be purchased through the exercise of stock options are currently held as treasury stock.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Conforming to this stock option plan, on October 29, 2007, the Board of Directors granted 504,088 options to subscribe to new Shares to certain employees of EDAP TMS. The exercise price was fixed at &#128;3.99 per share. Options were to begin vesting one year after the date of grant and will be fully vested as of October 29, 2011 (i.e., four years after the date of grant). Shares acquired pursuant to the options cannot be sold prior to four years from the date of grant. The options expire on October 29, 2017 (i.e., ten years after the date of grant) or when employment with the Company ceases, whichever occurs earlier. At December 31, 2007 the total fair value of the options granted under this plan was &#128;1,731 thousand. This non-cash financial charge will be recognized in the Company&#146;s operating expenses over a period of 48 months; the impact on 2007 Operating Income was &#128;156
thousand. The impact on 2008 operating income, in accordance with FAS123(R) was &#128;661 thousand.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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    <tr style='height:27.2pt'>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-32</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:left;'><font size=2>As of December 31, 2008, a summary of stock option activity to purchase or to subscribe to Shares under these plans is as follows:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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    <tr style='height:12.75pt'>
        <td width="37%" style='height:12.75pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" style='height:12.75pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2008</font></p> </td>
        <td  colspan="2" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2007</font></p> </td>
        <td  colspan="2" style='border-bottom:solid black .5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2006</font></p> </td> </tr>
    <tr style='height:51.0pt'>
        <td width="37%" style='height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Options </font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted average exercise price</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(&#128;)</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Options </font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted average exercise price</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(&#128;)</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Options </font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted average exercise price</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(&#128;)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Outstanding on January 1,</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>781,625</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.51</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>502,162</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.49</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>593,262</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2. 58</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Granted</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>504,088</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,99</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Exercised</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(183,750)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.03</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(72,600)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,20</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Forfeited</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(34,000)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.59</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(7,250)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,60</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(18,500)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,60</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Expired</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(40,900)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.37</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(33,625)</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.81</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="37%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Outstanding on December 31,</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>706,725</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.51</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>781,625</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.51</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>502,162</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.49</font></p> </td> </tr>
    <tr style='height:14.25pt'>
        <td width="37%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Exercisable on December 31,</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>342,929</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.00</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>234,787</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,63</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>405,162</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,73</font></p> </td> </tr>
    <tr style='height:39.0pt'>
        <td width="37%" valign=bottom style=' height:39.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Shares purchase options available for grant on December 31 </font></p> </td>
        <td width="10%" style='height:39.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>105,328</font></p> </td>
        <td width="10%" style='height:39.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='height:39.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>105,328</font></p> </td>
        <td width="10%" style='height:39.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="10%" style='height:39.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="10%" style='height:39.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The following table summarizes information about options to purchase Shares already held by the Company as treasury Shares, or to subscribe to new Shares, at December 31, 2008:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Outstanding options</font></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Exercisable options</font></p> </td> </tr>
    <tr style='height:63.75pt'>
        <td width="37%" valign=bottom style=' height:63.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Exercise price (&#128;)</font></p> </td>
        <td width="10%" valign=bottom style=' height:63.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:63.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Options</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:63.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted average remaining contractual life</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:63.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted average exercise price</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(&#128;)</font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:63.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Options </font></p> </td>
        <td width="10%" style='border-bottom:solid black .5pt; height:63.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted average exercise price</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(&#128;)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.99</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>485,088</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,8</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.99</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>121,292</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.99</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.60</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>162,000</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5.2</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.60</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>162,000</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.60</font></p> </td> </tr>
    <tr style='height:14.25pt'>
        <td width="37%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.08<sup>(1)</sup></font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>52,000</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.8</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.08</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>52,000</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.08</font></p> </td> </tr>
    <tr style='height:14.25pt'>
        <td width="37%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.02<sup>(2)</sup></font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,425</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.5</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.02</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,425</font></p> </td>
        <td width="10%" valign=bottom style=' height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.02</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="37%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.83</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,212</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.0</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.83</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,212</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.83</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="37%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>1.83 to 3.99</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>706,725</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4.2</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.51</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>342,929</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.00</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="8%" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(1) </font></p> </td>
        <td  valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>All the 52,000 options were granted on September 25, 2001 with an exercise price expressed in U.S. dollars ($1.92) and converted here to euros based on the noon buying rate on September 25, 2001 ($1 = &#128;1.085).</font></p> </td> </tr></table>



<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="8%" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>(2) </font></p> </td>
        <td  valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>All the 6,425 options were granted on June 18, 2002 with an exercise price expressed in U.S. dollars ($1.92) and converted here to euros based on the noon buying rate on June 18, 2002 ($1 = &#128;1.0545).</font></p> </td> </tr></table>


<p style=' margin-bottom:0pt; margin-top:3pt; margin-left:8.33%; text-indent:-8.33%;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; margin-left:8.33%; text-indent:-8.33%;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-33</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; margin-left:8.33%; text-indent:-8.33%;text-align:center;'><B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>A summary of the status of the non-vested shares as of December 31, 2008, and changes during the year ended December, 2008, is presented below:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:51.0pt'>
        <td width="36%" style='height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16%" style='border-bottom:solid black .5pt; height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Options</font></p> </td>
        <td width="16%" style='border-bottom:solid black .5pt; height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted average Grant-Date Fair Value (&#128;)</font></p> </td>
        <td width="14%" valign=top style='border-bottom: solid black .5pt;height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Free shares</font></p> </td>
        <td width="16%" valign=top style='border-bottom:solid black .5pt; height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted average Grant-Date Fair Value (&#128;)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="36%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Non-vested at January 1, 2008</font></p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>504,088</font></p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2.97</font></p> </td>
        <td width="14%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>7,065</font></p> </td>
        <td width="16%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>5.39</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="36%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Granted</font></p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>4,710</font></p> </td>
        <td width="16%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>5.39</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="36%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Vested</font></p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(121,272)</font></p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2.97</font></p> </td>
        <td width="14%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="36%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Forfeited</font></p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(19,000)</font></p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2.97</font></p> </td>
        <td width="14%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="36%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Non-vested at December 31, 2009</font></p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>363,816</font></p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2.97</font></p> </td>
        <td width="14%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>11,775</font></p> </td>
        <td width="16%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>5.39</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:3pt; margin-left:8.33%; text-indent:-8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>16-6 Warrants granted to certain employees</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of December 18, 2002, the shareholders of two of the Company&#146;s wholly owned and fully consolidated subsidiaries, TMS S.A. and EDAP S.A., authorized the respective Boards of Directors to grant certain Senior Executive Officers warrants to subscribe to an aggregate of 604,538 new shares of TMS S.A.&#146;s and EDAP S.A.&#146;s common stock. The average exercise price of such warrants is equivalent to the higher of either (a) the share value of the capital of each company or (b) the net book value, each such amount to be calculated on the date of exercise. Following the resignation of the President of EDAP S.A. in November 2003, outstanding warrants allow the current President of each divisions, to subscribe to an aggregate of 252,111 new shares of each of TMS S.A.&#146;s and EDAP S.A.&#146;s common stock. The total number of warrants granted, if exercised, would represent 3.6% and
2.6% of the respective share capital of TMS S.A. and EDAP S.A. after subscription. These warrants begin vesting three years after their date of grant, i.e. December 18, 2005. These warrants to subscribe to shares expire on the earlier of December 18, 2007 or when employment with the Company ceases. A compensation charge has been booked for an amount of &#128;0 thousand as at December 31, 2006, &#128;115 as at December 31, 2005 and &#128;0 as at December 31, 2004. On June 22, 2007, the beneficiary of the remaining warrants officially renounced to his allocated warrants. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>17&#151;NET SALES</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="85%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td  width="0%">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="9%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net sales consist of the following:</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr style='height:12.35pt'>
        <td  colspan="3" valign=top style='padding:0in 1.5pt 0in 1.5pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style=' border-bottom:solid black .5pt;padding:0in 1.5pt 0in 1.5pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="20%" valign=top style='border-bottom: solid black .5pt;padding:0in 1.5pt 0in 1.5pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td width="20%" valign=top style='border-bottom: solid black .5pt;padding:0in 1.5pt 0in 1.5pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td  colspan="3" valign=top style='padding:0in 1.5pt 0in 1.5pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 1.5pt 0in 1.5pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20%" valign=top style='padding:0in 1.5pt 0in 1.5pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20%" valign=top style='padding:0in 1.5pt 0in 1.5pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td  colspan="3" valign=top style='padding:0in 1.5pt 0in 1.5pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Sales of goods</font>                 </p> </td>
        <td  colspan="2" valign=bottom style='padding:0in 1.5pt 0in 1.5pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,547</font></p> </td>
        <td width="20%" valign=bottom style='padding:0in 1.5pt 0in 1.5pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,752</font></p> </td>
        <td width="20%" valign=bottom style='padding:0in 1.5pt 0in 1.5pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10,849</font></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td  colspan="3" valign=top style='padding:0in 1.5pt 0in 1.5pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Sales of RPPs  &amp; Leases</font>                                                </p> </td>
        <td  colspan="2" style='padding:0in 1.5pt 0in 1.5pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,664</font></p> </td>
        <td width="20%" style='padding:0in 1.5pt 0in 1.5pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,814</font></p> </td>
        <td width="20%" style='padding:0in 1.5pt 0in 1.5pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,805</font></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td  colspan="3" valign=top style='padding:0in 1.5pt 0in 1.5pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Sales of spare parts &amp; services</font>    </p> </td>
        <td  colspan="2" style='padding:0in 1.5pt 0in 1.5pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,645</font></p> </td>
        <td width="20%" style='padding:0in 1.5pt 0in 1.5pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,647</font></p> </td>
        <td width="20%" style='padding:0in 1.5pt 0in 1.5pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,520</font></p> </td> </tr>
    <tr style='height:12.35pt'>
        <td  colspan="3" valign=top style='padding:0in 1.5pt 0in 1.5pt; height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total net sales</font>                  </p> </td>
        <td  colspan="2" valign=top style=' border-top:solid black .25pt;padding:0in 1.5pt 0in 1.5pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,856</font></p> </td>
        <td width="20%" valign=top style='border-top:solid black .25pt; padding:0in 1.5pt 0in 1.5pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,213</font></p> </td>
        <td width="20%" valign=top style='border-top:solid black .25pt; padding:0in 1.5pt 0in 1.5pt;height:12.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>20,174</font></p> </td> </tr>
    <tr>
        <td width="2" ></td>

        <td width="48" ></td>

        <td width="140" ></td>

        <td width="61" ></td>

        <td width="41" ></td>

        <td width="102" ></td>

        <td width="102" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-34</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:3pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>18&#151;OTHER REVENUES</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Other revenues consists of the following:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="99%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="50%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="16%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td width="16%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="50%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Royalties</font>                                              </p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="50%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Grants and others</font>                                                 </p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>197</font></p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>113</font></p> </td>
        <td width="16%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>91</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="50%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total </font>                 </p> </td>
        <td width="16%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>197</font></p> </td>
        <td width="16%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>113</font></p> </td>
        <td width="16%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>91</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2008, EDAP TMS France invoiced &#128;58 thousand to China Medical Technologies for consulting services and received grants of &#128;59 thousand from ANVAR a French government agency</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2007, EDAP SA invoiced &#128;43 thousand to China Medical Technologies for consulting services.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2006, EDAP SA received grants of &#128;45 thousand from ANVAR a French government agency. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font color="#FF0000"></font><b><font size=2>19&#151;NON-RECURRING OPERATING EXPENSES</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2008, there were no non-recurring expense.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2007, the Company recorded non-recurring expenses of &#128;0.2 million including &#128;0.5 million of employee termination expenses and &#128;0.3 million of other income linked to the recovery of medical equipments from HealthTronics as part of the Termination Agreement. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2006, the Company recorded non-recurring expenses of &#128;0.3 million including &#128;0.2 million of employee termination expenses and &#128;0.1 million of capital increase expenses. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>20&#151;FINANCIAL INCOME, NET</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Interest (expense) income, net consists of the following:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Interest income</font>              </p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>412</font></p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>331</font></p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>224</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Interest expense </font>      </p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,413)</font></p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(378)</font></p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(71)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Depreciation of prepaid expenses on debt grant </font>                                 </p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(469)</font></p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(78)</font></p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#8722;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Changes in fair value of the Convertible Debentures </font>         </p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,465</font></p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(747)</font></p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#8722;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Changes in fair value of the Investor Warrants </font></p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,931</font></p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(498)</font></p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#8722;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Changes in fair value of the Placement Agent Warrants</font></p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>307</font></p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>127</font></p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&#8722;</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="59%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total </font>                 </p> </td>
        <td width="13%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,232</font></p> </td>
        <td width="13%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,243)</font></p> </td>
        <td width="13%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>153</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>The interest expense related to the payment of the 9% interest coupon on the convertible debentures amounted to &#128;1,223 thousand and &#128;218 thousand for the years ended December 31, 2008 and 2007, respectively.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>21&#151;OTHER INCOME (EXPENSE), NET</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Other income (expense), consists of the following:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Other income (expense), net</font>                                            </p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>16</font></p> </td>
        <td width="13%" style='height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="59%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total </font>                 </p> </td>
        <td width="13%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <td width="13%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>16</font></p> </td>
        <td width="13%" style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-35</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>22&#151;INCOME TAXES</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>22-1 Loss before income taxes</font></b></i></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:36pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Loss before income taxes is comprised of the following:</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>France</font>            </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,183</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,055)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,990)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>EDAP Inc</font>                                           </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,896)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(87)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Other countries </font>          </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(181)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(429)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(385)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="59%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total </font>                 </p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,105</font></p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,571)</font></p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:double black 2.25pt;border-right:none; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,375)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>22-2 Income tax (expense)/ benefit</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Income tax (expense)/benefit consists of the following:</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><font size=2>Current income tax expense: </font></i><i></i></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;<i></i></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;<i></i></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;<i></i></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>France </font>         </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>543</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>107</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Other countries </font>          </p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(35)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(58)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(69)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Sub-total current income tax expense </font>                                          </p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>508</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>49</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(65)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><font size=2>Deferred income tax (expense) benefit:</font></i><i></i></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;<i></i></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;<i></i></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;<i></i></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>France </font>         </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(81)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>21</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>72</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Other countries </font>          </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>65</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>70</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(63)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Sub-total deferred income tax (expense) benefit</font></p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(15)</font></p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>91</font></p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="59%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total </font>                 </p> </td>
        <td width="13%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>492</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>140</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(56)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>22-3 Deferred income taxes:</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities reported for financial reporting purposes and such amounts as measured in accordance with tax laws. The tax effects of temporary differences which give rise to significant deferred tax assets (liabilities) are as follows:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="13%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Elimination of intercompany profit in inventory</font>                                       </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>102</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>139</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Elimination of intercompany profit in fixed assets</font>                             </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>355</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>203</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Other items </font>                                </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>736</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>548</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Net operating loss carryforwards </font>              </p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,310</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>7,799</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total deferred tax assets</font>              </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10,503</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,689</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Capital leases treated as operating leases for tax </font>                               </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(11)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(35)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Other items</font>                                   </p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(120)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(161)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total deferred tax liabilities</font>                                                 </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(130)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(196)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net deferred tax assets</font>                       </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10,372</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,493</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="73%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Valuation allowance for deferred tax assets </font>          </p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(10,050)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(8,248)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="73%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Deferred tax assets (liabilities), net of allowance </font>                                 </p> </td>
        <td width="13%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>322</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>245</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-36</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Net operating loss carryforwards of &#128;3,818 thousand, &#128;2,644 thousand, &#128;1,071 thousand, &#128;146 thousand, &#128;51 thousand and &#128;19,492 thousand as of December 31, 2008 are available at EDAP Technomed Inc., EDAP-TMS France S.A.S., Edap Technomed Co Ltd Japan, Edap Technomed Sdn Bhd Malaysia, EDAP TMS GmbH and EDAP TMS S.A., respectively. These net operating losses generate deferred tax assets of &#128;9,310 thousand. Realization of these assets is contingent on future taxable earnings in the applicable tax jurisdictions. As of December 31, 2008, &#128;8,873 thousand out of these &#128;9,310 thousand net operating loss carry-forwards have no expiration date. The remaining tax loss carry-forwards expire in years 2011 through 2015. In accordance with SFAS No. 109, a valuation allowance is recorded as realization of those amounts are not considered probable.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Deferred taxes have not been provided on the undistributed earnings of domestic subsidiaries as these earnings, with the exception of the earnings of EDAP-TMS France SAS, which benefited from the tax exemption, can be distributed tax-free to EDAP TMS S.A. The tax-exempted earnings of EDAP-TMS France SAS would normally be taxable if distributed to EDAP TMS S.A. via dividends. However, no taxes will be due if the Company first incorporates these earnings into statutory capital and then makes a distribution via a statutory capital reduction (redemption). As the Company intends on implementing this tax planning opportunity in the event a distribution were to be made, no deferred taxes have been provided on these earnings</font><font color="#FF0000"><font size=2>.</font></font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>22-4 Effective tax rate</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>A reconciliation of differences between the statutory French income tax rate and the Company&#146;s effective tax rate is as follows:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:3.5pt;border-collapse:collapse'>
    <tr style='height:13.5pt'>
        <td width="63%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt;padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt;padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td width="12%" valign=bottom style='border-bottom: solid black 1.0pt;padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="63%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>French statutory rate</font>                                </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>33.8%</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>33.8%</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>33.8%</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="63%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Research and development tax credit</font>                                             </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(49.2%)</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.0%</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.4%</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="63%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Income of foreign subsidiaries taxed at different tax rates </font>                                 </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3.9%)</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0.5%</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.3%</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="63%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Effect of net operating loss carryforwards and valuation allowances </font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>123.8%</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(19.1%)</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(27.6%)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="63%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Non taxable debt fair value variation</font>                                                </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(205.3%)</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(6.8%)</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="63%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Non deductible entertainment expenses </font>                           </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.1%</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.9%)</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1.4%)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="63%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Other</font>                  </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>53.1%</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(7.0%)</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(9.1%)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="63%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Effective tax rate</font>        </p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(44.6%)</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.5%</font></p> </td>
        <td width="12%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1.6%)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:6pt; margin-top:12pt; text-indent:8.33%;text-align:left;'><i><b><font size=2>22-5 Uncertainty in Income Taxes</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>Through the adoption of FIN No 48, the Company reviewed the tax positions of each subsidiary. On December 31, 2008 there is no uncertainty in the Company&#146;s tax positions. As a result, there is no effect on the retained earnings</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="76%" style=' margin-left:27.0pt;border-collapse:collapse'>
    <tr style='height:13.5pt'>
        <td width="80%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="19%" valign=bottom style='border-bottom: solid black 1.0pt;padding:0in 3.5pt 0in 3.5pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Unrecognized tax benefits</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="80%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Balance as of January 1<sup>st</sup>, 2008</font>                           </p> </td>
        <td width="19%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="80%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Impact of tax positions taken during a prior period</font>                       </p> </td>
        <td width="19%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="80%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Impact of tax positions taken during the current period</font>                                               </p> </td>
        <td width="19%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="80%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Impact of settlements with taxing authorities</font>     </p> </td>
        <td width="19%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="80%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Impact of a lapse of the applicable statute of limitations</font>                                           </p> </td>
        <td width="19%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="80%" valign=bottom style='padding:0in 3.5pt 0in 3.5pt; height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Balance as of December 31<sup>st</sup>, 2008</font>          </p> </td>
        <td width="19%" style='padding:0in 3.5pt 0in 3.5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2008, the Company did not record any interest and penalties. In case of interest and penalties, they would be recognized as non-recurring operating expenses. The tax years that remain subject to examination by major tax jurisdictions are 2006, 2007 and 2008.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-37</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>23&#151;EARNINGS (LOSS) PER SHARE</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>A reconciliation of the numerators and denominators of the basic and diluted EPS calculations for the years ended December 31, 2008, 2007 and 2006 is as follows:</font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=1>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="18%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>For the year ended Dec. 31, 2008</font></b></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>For the year ended Dec. 31, 2007</font></b></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>For the year ended Dec. 31, 2006</font></b></p> </td> </tr>
    <tr style='height:38.25pt'>
        <td width="18%" valign=bottom style=' height:38.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" style='border-bottom:solid black .5pt; height:38.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Income  in euro (Numerator)</font></b></p> </td>
        <td width="9%" style='border-bottom:solid black .5pt; height:38.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Shares (Denomin-ator)</font></b></p> </td>
        <td width="9%" style='border-bottom:solid black .5pt; height:38.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Per-Share Amount</font></b></p> </td>
        <td width="9%" style='border-bottom:solid black .5pt; height:38.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Loss  in euro (Numerator)</font></b></p> </td>
        <td width="9%" style='border-bottom:solid black .5pt; height:38.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Shares (Denomin-ator)</font></b></p> </td>
        <td width="9%" style='border-bottom:solid black .5pt; height:38.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Per-Share Amount</font></b></p> </td>
        <td width="9%" style='border-bottom:solid black .5pt; height:38.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Loss  in euro (Numerator)</font></b></p> </td>
        <td width="9%" style='border-bottom:solid black .5pt; height:38.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Shares (Denomin-ator)</font></b></p> </td>
        <td width="9%" style='border-bottom:solid black .5pt; height:38.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Per-Share Amount</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="18%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Basic EPS</font></b></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="18%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>Income (loss) available to</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="18%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>common Shareholders </font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>1,597,189</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>9,582,593</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>0.17</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>(5, 430,460)</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>9,200,757</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>(0.59)</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>(3,430,985)</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>8,817,007</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>(0.39)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="18%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>Effect of dilutive securities:</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="18%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>Stock options only in the money</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>75,702</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>516,730</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>740,526</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="18%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><b><font size=1>Diluted EPS</font></b></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="18%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>Income (Loss) available to</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="18%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>common shareholders,</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="18%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>including assumed</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="9%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="18%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>Conversions</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>1,597,189</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>9,658,295</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>0.17</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>(5,430,460)</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>9,717,487</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>(0.59)</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>(3,430,985)</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>9,557,533</font></p> </td>
        <td width="9%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>(0.39)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>24&#151;COMMITMENTS AND CONTINGENCIES</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>24-1 Commitments</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Company currently has commitments regarding its operating leases as described in Note 12-2.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><font size=2>The Company also has commitments regarding its convertible debentures and warrants. Under the terms of the registration rights agreement the Company entered into in connection with the October 2007 private placement, the Company agreed to secure the registration of a portion of the securities deliverable upon conversion of the debentures and in payment of interest under the debentures by certain dates, and the Company agreed to secure the registration of the remaining securities deliverable on conversion of the debentures and all of the securities deliverable upon exercise of the warrants by certain dates, with penalties, including payment of liquidated damages in case of a default of these commitments. Also, the Company committed to a certain number of covenants regarding its convertible debentures and warrants, and any event of default on these covenants could require the early
repayment of the debentures at the mandatory default amount, including all other amounts of interest, costs, expenses and liquidated damages due in respect of the defaulted debentures.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>24-2 Litigation</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As of the date of these financial statements, the Company is not involved in any material legal proceedings. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2000, a patient made a product liability claim against the Company in the United States, alleging that he was injured in the course of a Prostatron procedure.  In connection with the sale of the Prostatron business in October 2000, the Company agreed to retain liability for this claim.  In February 2008, we reached a settlement for this claim with the cost of $15,000 which was fully covered by our Product Liability Insurance.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-38</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font color=""><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><i><b><font size=2>24-3 Contingencies</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Company currently has contingencies relating to warranties provided to customers for products as described in Note 1-13 and Note 11.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>25&#151;FAIR VALUE OF FINANCIAL INSTRUMENTS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The following disclosure of the estimated fair value of financial instruments was made in accordance with the requirements of SFAS No. 107 &#145;&#145;Disclosure about fair value of financial instruments.&#146;&#146; The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. The estimates of fair values of the Company&#146;s financial instruments are compared below to the recorded amounts at December 31, 2008 and 2007.</font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31, </font></b></p> </td>
        <td  colspan="2" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31, </font></b></p> </td> </tr>
    <tr style='height:51.0pt'>
        <td width="57%" valign=bottom style=' height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Recorded Value</font></b></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008 Estimated Fair Value</font></b></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Recorded Value</font></b></p> </td>
        <td width="10%" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007 Estimated Fair Value</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Assets:</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=top style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Cash and cash equivalents </font>                                              </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>13,827</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>13,827</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>17,523</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>17,523</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Trade accounts and notes receivable, net </font>                  </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>14,611</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>14,611</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10,877</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10,877</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Short term investment</font>                           </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,143</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,143</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,089</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,089</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Liabilities:</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Short-term borrowings</font>                        </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,753</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,753</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,593</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,593</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Trade accounts payable </font>             </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,065</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,065</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,067</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,067</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Notes payable </font>                </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>981</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>981</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>595</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>595</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Convertible Debentures and other Long Term Debt</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,053</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,053</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,691</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,691</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Investor Warrants</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>392</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>392</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,141</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,141</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="57%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Placement Agent Warrants</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>55</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>55</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>343</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>343</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt; margin-left:8.33%;text-align:justify;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The recorded amount of cash and cash equivalents, restricted short term investment, investments available for sale, trade accounts and notes receivable (drafts), short-term borrowings, and trade accounts and notes payable (drafts) are a reasonable estimate of their fair value due to the short-term maturities of these instruments.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The long-term debt is recorded at fair value.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>26&#151;CONCENTRATION OF CREDIT RISK</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents and trade accounts and notes receivable from customers, primarily located in France, Japan and the United States. The Company maintains cash deposits with major banks. Management periodically assesses the financial condition of these institutions and believes that any possible credit risk is limited.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:justify;'><font size=2>The Company has procedures in effect to monitor the creditworthiness of its customers. The Company obtains bank guarantees for first-time or infrequent customers, and in certain cases obtains insurance against the risk of a payment default by the customer. The Company reviewed individual customer balances considering current and historical loss experience and general economic conditions in determining the allowance for doubtful accounts receivable of &#128;0.8 million and &#128;0.7 million, for the years ended December 31, 2008, and 2007, respectively.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-39</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>Ultimate losses may vary from the current estimates, and any adjustments are reported in earnings in the periods in which they become known.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In 2008 and 2007, the Company did not generate significant revenue with a single customer. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>27&#151;FOREIGN CURRENCY TRANSACTIONS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Company generates a significant percentage of its revenues, and of its operating expenses, in currencies other than euro. The Company&#146;s operating profitability could be materially adversely affected by large fluctuations in the rate of exchange between the euro and such other currencies. The Company engages in foreign exchange hedging activities when it deems necessary, but there can be no assurance that hedging activities will be offset by the impact of movements in exchange rates on the Company&#146;s results of operations. As of December 31, 2008, there were no outstanding hedging instruments.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>28&#151;SEGMENT INFORMATION</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>In July 2002, the Company announced an organizational realignment that created two operating divisions within the Company. For reporting purposes, this organizational realignment created three reporting segments: the holding company, EDAP TMS S.A., the High Intensity Focused Ultrasound division and the Urological Devices and Services division. Then, in 2007, the Company created a new reporting segment dedicated to the FDA approval for Ablatherm-HIFU activity. The following tables set forth the key income statement figures, by segment for fiscal years 2008, 2007 and 2006 and the key balance sheet figures, by segment, for fiscal years 2008, 2007 and 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>As from the first quarter of 2007, the Company elected to report its segment information on a &#147;net contribution&#148; basis, so that each segment&#146;s results comprise the elimination of our intra-group revenues and expenses and thus reflect the true contribution to consolidated results of the segment. The Company has reclassified its 2006 results using this method for comparative purposes with its 2007 results. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The business in which the Company operates is the development and production of minimally invasive medical devices, primarily for the treatment of urological diseases. Substantially all revenues result from the sale of medical devices and their related license and royalty payments from third parties. The segments derive their revenues from this activity.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:left;'><font size=2>Segment operating profit or loss and segment assets are determined in accordance with the same policies as those described in the summary of significant accounting policies except that interest income and expense, current and deferred income taxes, and goodwill are not allocated to individual segments. A reconciliation of segment operating profit or loss to consolidated net loss is as follows:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0in'><b><font size=2>2008</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0in'><b><font size=2>2007</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0in'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Segment operating loss</font>                   </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,703)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,089)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,094)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Financial income, net </font>                             </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,232</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,243)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>153</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Foreign Currency exchange (losses) gains, net </font>                                       </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>577</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(254)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(430)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Other income, net</font>  </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>16</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="59%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Income tax (expense) credit </font>                                             </p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>492</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>140</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(56)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="59%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Consolidated net loss</font>                            </p> </td>
        <td width="13%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,597</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,430)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,431)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-40</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>A summary of the Company&#146;s operations by business unit is presented below for years ending December 31, 2008, 2007 and 2006:</font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:.25in'>
        <td width="32%" valign=bottom style=' height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=1>HIFU Division</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>UDS Division</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=1>EDAP TMS</font></B></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>(Corporate)</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=1>FDA</font></B></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Total consolidated</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008 </font></b></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>External sales of medical devices</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,687</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>7,532</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10,219</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>External sales of spares parts,</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:9.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Supplies &amp; services</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,373</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,264</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,637</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total sales</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,060</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>13,796</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,856</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Warrants granted</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total net sales</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,060</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>13,796</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,856</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>External other revenues</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>138</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>59</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>197</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total revenues</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,198</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>13,855</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>23,053</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total COS</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,794)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(10,161)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(13,955)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Gross margin</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,405</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,694</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,099</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>R&amp;D</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,082)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,115)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,058)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,255)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Selling expenses</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,960)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,724)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,684)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>G&amp;A</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(887)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(841)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,036)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(97)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,862)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Non recurring operating expenses</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total expenses </font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,930)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,680)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,036)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,156)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(13,802)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Operating income (loss)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>475</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(986)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,036)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,156)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,703)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total Assets</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10,690</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>20,000</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,746</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,429</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>43,863</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Capital expenditures</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>673</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>327</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>128</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,128</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Long-lived assets</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,048</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,371</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>171</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>157</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,747</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Goodwill </font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>645</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,767</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,412</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font color="#FF0000"><font size=1>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-41</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:8.33%;text-align:justify;'><font size=1>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:.25in'>
        <td width="32%" valign=bottom style=' height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=1>HIFU Division</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>UDS Division</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=1>EDAP TMS</font></B></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>(Corporate)</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=1>FDA</font></B></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Total consolidated</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007 </font></b></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>External sales of medical devices</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,661</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,496</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,157</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>External sales of spares parts,</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:9.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Supplies &amp; services</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,610</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,447</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>13,057</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total sales</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,271</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,943</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,213</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Warrants granted</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total net sales</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,271</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,943</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,213</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>External other revenues</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>60</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>53</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>113</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total revenues</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,331</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,996</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,327</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total COS</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,940)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(9,208)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(13,148)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Gross margin</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,391</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,788</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,179</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>R&amp;D</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,216)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,060)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(918)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,194)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Selling expenses</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,986)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,408)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(81)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,476)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>G&amp;A</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(985)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(944)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,786)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(659)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,374)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Non recurring operating expenses</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(7)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(512)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>295</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(224)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total expenses </font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,187)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,419)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,298)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,363)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(13,267)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Operating income (loss)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>204</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(631)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,298)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,363)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,089)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total Assets</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,876</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>18,578</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,696</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,851</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>45,003</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Capital expenditures</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,109</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,354</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>44</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,507</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Long-lived assets</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,029</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,059</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>82</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>217</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>7,387</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Goodwill </font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>645</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,767</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,412</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-42</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:.25in'>
        <td width="32%" valign=bottom style=' height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><b><font size=1>HIFU Division</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>UDS Division</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=1>EDAP TMS</font></B></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>(Corporate)</font></b></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=1>FDA</font></B></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:.25in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Total consolidated</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006 </font></b></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>External sales of medical devices</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,611</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,998</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,608</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>External sales of spares parts,</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:9.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Supplies &amp; services</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,989</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,576</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,566</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total sales</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>7,600</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,574</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>20,174</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Warrants granted</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total net sales</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>7,600</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,574</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>20,174</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>External other revenues</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>65</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>26</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>91</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total revenues</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>7,666</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,599</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>20,265</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total COS</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,169)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(8,776)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(11,946)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Gross margin</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,497</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,822</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,319</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>R&amp;D</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,423)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,019)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,442)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Selling expenses</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,475)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,146)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,621)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>G&amp;A</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(696)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,748)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,638)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,083)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Non recurring operating expenses</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(267)</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(267)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total expenses </font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,595)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(4,913)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,905)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(11,413)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Operating income (loss)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(98)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,091)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,905)</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,094)</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total Assets</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,544</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>16,816</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,112</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>32,473</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Capital expenditures</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,050</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>515</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,565</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Long-lived assets</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,384</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,650</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>46</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,080</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="32%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Goodwill </font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>645</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,767</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,412</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-43</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:center;'>
<B><font SIZE=2>EDAP TMS S.A. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><B><font SIZE=1>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(in thousands of euros unless otherwise noted, except per share data)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>29&#151;VALUATION ACCOUNTS</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:51.0pt'>
        <td width="78%" valign=bottom style=' height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Allowance for doubtful accounts</font></b></p> </td>
        <td width="10%" valign=bottom style=' height:51.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Slow-moving inventory</font></b></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="78%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Restated balance as of January 1, 2006</font>                                    </p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>663</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>874</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="78%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Charges to costs and expenses</font>                           </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>86</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>388</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="78%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Deductions: write-off provided in prior periods </font>                                     </p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(68)</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(334)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="78%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Restated balance as of December 31, 2006 </font>                </p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>681</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>928</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="78%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Charges to costs and expenses</font>                           </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>131</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>288</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="78%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Deductions: write-off provided in prior periods </font>                                     </p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(77)</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(195)</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="78%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Restated balance as of December 31, 2007 </font>                </p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>735</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1021</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td width="78%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Charges to costs and expenses</font>                           </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>72</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>391</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="78%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Deductions: write-off provided in prior periods </font>                                     </p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(15)</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr style='height:13.5pt'>
        <td width="78%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Restated balance as of December 31, 2008</font>                   </p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>792</font></p> </td>
        <td width="10%" valign=bottom style=' height:13.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,412</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>30&#151;SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="105%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td  width="0%">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="7%" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:3pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="43%" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=2>Interest and income taxes paid are as follows:</font></p> </td>
        <td   colspan="4">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr style='height:12.75pt'>
        <td  colspan="4" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td  colspan="4" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Income taxes paid (refunds received)</font>                                             </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>74</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>142</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>204</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td  colspan="4" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Interest paid</font>                             </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>382</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>291</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td  colspan="4" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Interest received</font>       </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>273</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>284</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>150</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td  colspan="4" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td  colspan="4" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Non-cash transactions:</font>                    </p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>
        <td width="10%" valign=bottom style='border-bottom: solid black .5pt;height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td> </tr>
    <tr style='height:12.75pt'>
        <td  colspan="4" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Capital lease obligations incurred</font>               </p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,019</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,557</font></p> </td>
        <td width="10%" valign=bottom style=' height:12.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,132</font></p> </td> </tr>
    <tr>
        <td width="2" ></td>

        <td width="48" ></td>

        <td width="262" ></td>

        <td width="103" ></td>

        <td width="64" ></td>

        <td width="64" ></td>

        <td width="64" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font color="#FF0000"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>31&#151;RELATED PARTY TRANSACTIONS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:justify;'><font size=2>The General Manager of the Company's Korean branch "EDAP-TMS Korea" is also Chairman of a Korean company named Dae You. EDAP-TMS Korea subcontracts to Dae You the service contract maintenance of our medical devices installed in Korea. The amounts payable under this contract were &#128;61 thousand, &#128;71 thousand and &#128;61 thousand for 2008, 2007 and 2006 respectively. Dae You also acts as an agent to promote our medical devices in South Korea, and receives commissions on sales. Dae You has purchased medical devices from us, which it operates in partnership with hospitals or clinics. These purchases amounted to &#128;539 thousand, &#128;558 thousand and &#128;588 thousand in 2008, 2007 and 2006 respectively. As of December 31, 2008, receivables amounted to &#128;384 thousand and payables to &#128;31 thousand. As of December 31, 2007, receivables from Dae You amounted to &#128;52 thousand and our
payables to them amounted to &#128;28 thousand. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; text-indent:8.33%;text-align:justify;'><font size=2>The Company purchases certain technological elements from Siemens AG, an affiliate of its shareholder, Siemens France Holding. Total purchases amounted to &#128;212 thousand in 2008, &#128;183 thousand in 2007 and &#128;444 thousand in 2006. As of December 31, 2008, payables due to Siemens AG amounted to &#128;10 thousand and as of December 31, 2007, payables due to Siemens AG amounted to &#128;1 thousand. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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    <tr style='height:27.2pt'>
        <td width="33%" valign=bottom style='background:white;padding: 0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> <td width="33%" valign=top style='border-bottom:0pt; background:white;padding:0in 5.4pt 0in 5.4pt;height:27.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font COLOR=""><font SIZE=2>F-44</font></font></p> </td>
        <td width="33%" valign=top style='background:white;padding:0in 5.4pt 0in 5.4pt; height:27.2pt'>
            <p style='margin-left:0pt;text-indent:151.5pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>






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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>EXHIBIT 1.1 </font></B></U><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>BY-LAWS</font></B></U><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EDAP TMS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>A stock company (soci&#233;t&#233; anonyme)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>with a capital of Euros 1,300,823.29</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Head office: Parc d&#146;activit&#233;- La Poudrette Lamartine</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>4 rue du Dauphin&#233;</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>69120 Vaulx en Velin - France</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>MEMORANDUM AND ARTICLES OF ASSOCIATION</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>- BYLAWS </font></b><font size=2>-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>including modifications approved on January 8, 2009</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p> </td>
        <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
            <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2/22</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

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<U><B><font SIZE=2>TITLE I</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>FORMATION - PURPOSE - CORPORATE NAME</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>REGISTERED OFFICES - DURATION</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><U><B><font SIZE=2>ARTICLE 1 - FORMATION OF THE COMPANY</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>A stock company exists between the owners of the shares created hereinafter and those which</font><b><font size=2> </font></b><font size=2>could be created at a later stage ; it is organized and exists under the laws in force and under the following bylaws.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><u><b><font size=2>ARTICLE 2 &#150; CORPORATE PURPOSES</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The purpose of the Company is:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the taking of financial interests under whatever form in all French or foreign groups, companies or businesses which currently exist or which may be created in the future, mainly through contribution, subscription or purchasing of shares, obligations or other securities, mergers, holding companies, groups, alliances or partnerships&nbsp;; </font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:4.6%;text-align:justify;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="4%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the management of such financial interests&nbsp;; </font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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    <tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the direction, management, supervision and coordination of its subsidiaries and interests&nbsp;; </font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the provision of all administrative, financial, technical or other services&nbsp;; </font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:4.6%;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>and generally, all operations of whatever nature, financial, commercial, industrial, civil, relating to property and real estate which may be connected directly or indirectly, in whole or in part, to the company's purposes or to any similar or related purposes which may favor the extension or development of said purpose. </font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 3 - CORPORATE NAME</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The corporate name of the Company is:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>EDAP TMS</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 4 - REGISTERED OFFICE</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The registered office is fixed at: Parc d'activit&#233; La Poudrette Lamartine </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>4 rue du Dauphin&#233;- (F) 69120 Vaulx en Velin - France.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3/22</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>


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<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
<font size=2>It may be transferred to any other location within the department or a nearby department further to a simple resolution from the Board, subject to ratification by the earliest Ordinary General Meeting, and every other location by virtue of a resolution from the Extraordinary Shareholders' General Meeting. The Board may set up administrative seats, subsidiaries, offices and branches in all places without any derogation related to the choice of jurisdiction as provided in these bylaws.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 5 - DURATION</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The duration of the Company is sixty (60) years as of the date of incorporation of the Company recorded in the Trade and Corporate Registry unless an anticipated dissolution or a prorogation is decide as provided for in these bylaws.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>TITLE II</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>REGISTERED CAPITAL</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 6 - REGISTERED CAPITAL</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The registered capital is fixed at the amount of one million three hundred thousand eight hundred twenty-three Euros and twenty-nine cents (Euros 1,300,823.29) divided into ten million six thousand three hundred and thirty-three (10,006,333) shares with a nominal value of thirteen cents (Euros 0.13) each, fully paid up. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 7 - INCREASE OF THE REGISTERED CAPITAL</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The registered capital may be increased once or several times through the creation of new shares, representing contributions in kind or contributions in cash, the transformation of available corporate reserves into shares or through any other mean by virtue of a resolution from the Extraordinary Shareholders' General Meeting. Such meeting shall fix the conditions for the issuing of new shares within the framework of the legal provisions in force, or delegate its powers for such purpose to the Board. As a representation of capital increases may be created, either shares similar to the existing ones, or shares of a totally different type which may, within the conditions provided by law, grant a preferential right or whatever privilege on the other shares. The Board has all powers to negotiate, if</font><b><font size=2> </font></b><font size=2>any, with any bank or financial syndicate to facilitate or
guarantee the issuance of shares as mentioned hereabove complying with any legal provision, in particular as far as preferential rights of subscription for the benefit of the older shareholders are concerned.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4/22</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>


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<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>No capital increase in shares paid up in cash may however be implemented if the existing capital has not been priorly fully paid up. Capital increases must be implemented within five years as of the date on which the Shareholders' General Meeting has taken or authorized such resolution.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Capital increases may occur through the issue of shares with a premium. That premium of which the total amount shall have to be paid at the time of the subscription of the shares shall not be regarded as a profit to be distributed under operating profit ; it shall represent an additional payment to the capital in shares and shall belong exclusively to all shareholders, except otherwise provided for by the Ordinary or Extraordinary Shareholders' Meeting.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In case of an increase through the issue of shares payable in cash, and unless otherwise provided further to a resolution from the Extraordinary Shareholders' General Meeting, the owners of existing shares who have duly contributed as they were called up shall receive in proportion to the amount of these shares, a preferential right to subscribe to the new shares. The Board shall determine the manner in</font><b><font size=2> </font></b><font size=2>which that right shall be exercised and its validity period in compliance with (French) law; it shall be negotiable under the same conditions as the shares during the subscription.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Those shareholders who, due to the number of shares they hold, may not obtain a new share or a full number of new shares, shall be entitled to group to exercise their right but however no joint subscription may result from such a grouping.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 8 - CAPITAL REDUCTION</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Extraordinary Shareholders' General Meeting may also decide a reduction of the registered capital for whatever reason and in whatever manner, in particular through the reimbursement to the shareholders of a repurchasing of the corporate shares or the exchange of old shares by new shares, for the same or a lower number of shares, with or without the same nominal amount and, if any, the obligation of selling or buying old shares to enable the exchange or also through the payment of a balance in cash.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The General Meeting may also delegate to the Board all powers to implement the capital reduction.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Auditors shall be informed on the project of capital reduction at least forty five days prior to the Meeting. The General Meeting shall decide on the report from the Auditors who shall provide their appreciation on the causes and the conditions of the operation.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>When losses do not motivate the capital reduction, creditors may within a period of thirty days as of the date of the filing with the Clerk of the Trade Court of the minutes of the resolution from the General Meeting who decided or authorized the reduction, oppose to the reduction. The opposition is brought before the Trade Court.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5/22</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>


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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<U><B><font SIZE=2>TITLE III</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>SHARES</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><u><b><font size=2>ARTICLE 9 &#150; PAYMENT OF THE SHARES </font></b></u><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>At the time of capital increase, the shares to be subscribed in cash must be paid up of at least one fourth at the time of the subscription. The balance of payments shall be paid within a maximum of five years, as of the day on which the capital increase shall have become effective, in one or several times, at the times and in the proportions determined by the Board. The calling up of capital contributions shall be communicated to the shareholders by registered letter at least fifteen days prior to the date fixed for each payment.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The shares contributed in cash as part of the capital increases may be paid up partly or totally through the compensation of a debt which is fixed, liquid and due to the company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Board may authorize at any time the shareholders to prepay the amount of their shares which are not yet called up.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Should the shareholders not proceed with the payments on the set dates, the interest of the amount of these payments shall run by law for each day of delay at a rate of 12% per annum as of the date of payment fixed in the registered letter above mentioned and without a claim or formal notice being necessary. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>If within the period fixed at the time of calling up the capital, some shares have not been paid up from the required payments, the Company may, one month after a special formal individual notice notified to the defaulting shareholder - by registered letter or extra judicial writ &#150; offer, to the other shareholders, the shares to be paid up by registered letter sent to each of them.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>To implement this preemptive right, the Board shall have, upon the expiration of the fixed time limit, at the time of the calling up of capital, to offer to the shareholders the shares to be paid up by registered letter sent to each of them.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>If several shareholders are purchasers, the shares shall be distributed among them in proportion to their rights in the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>If such a proportional distribution is not possible, the remaining shares shall be distributed through draw lots.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>If within a time limit of one month further to the shareholders having been warned, some shares are still not paid up, the Company may sale them within the terms and conditions stipulated under Section L.228-27 of the French Commercial Code through the decree of March 23, 1967 referred to for its application.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6/22</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>


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<font size=2>The sale of the shares shall be carried in public auctions by a stock broker or a public notary. For such purpose, the Company shall publish in a legal gazette within the department of the registered offices, at least thirty days further to the notice scheduled in the previous paragraph, a notice concerning the sale of the shares. It shall inform the debtor and, if any, its co-debtors, of the sale by a registered letter containing indications on the date and the issue number of the gazette in which the publication has been made. The sale of the shares may not take place less than fifteen day as from the sending of the registered letter.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Company shall be entitled to the net proceeds of the sale up to the due amount and shall be deducted from the principal amount and interests due by the defaulting shareholder before the reimbursement of the costs incurred by the company to realize the sale. The defaulting shareholder remains debtor or benefits from the difference.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Upon the expiration of the time limit as scheduled in the fifth paragraph above, the shares  not paid up from the required payments shall stop permitting the admission and the voting rights in shareholders meetings and shall be deducted for the counting of the quorum. The right  to the dividends and the preferential right of subscription shall be suspended. If the shareholder pays up the principal sum and its interests, he/she may ask for the payment of non prescribed dividends but he/she may not exercise an action under a preferential right of subscription to a capital increase after the expiration of the time limit fixed for the exercise of that right.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><u><b><font size=2>ARTICLE 10 &#150; LEGAL FORM AND CONDITIONS OF VALIDITY OF SHARES</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The shares are compulsorily issued by the Company as registered shares and are materialized through a registration into the accounts of the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The share accounts are kept under the conditions and terms provided by law, by the Company or any other authorized Agent the name or denomination and address of which shall be published in the "</font><i><font size=2>Bulletin des Annonces L&#233;gales Obligatoires</font></i><font size=2>" (Bulletin for compulsory legal announcements).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The share accounts mention:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the identification data of natural persons or legal entities in the name of whom they have been opened and, if any, the legal nature of their rights or incapacities&nbsp;;</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="3%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the name, the category, the number and, if any, the nominal value of the registered shares ;</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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    <tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the restrictions which may concern these shares (pledge, escrow account, etc...).</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>7/22</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>


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</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Whenever the shares are not fully paid upon subscription, the payments on these shares are put in and witnessed as such by a certificate.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Each share gives right to a part of the ownership of the Company's assets, in proportion with the number of issued shares. Besides, it gives right to a part of profits as stipulated under Article 27 hereinafter.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Shareholders are only responsible up to the amount of shares they possess and above that amount, any calling up of capital is forbidden. They cannot be subject to any restitution of interests or dividends which were regularly distributed.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 11 - SHARE TRANSFERS</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Shares may be freely traded under the conditions defined by law. In the event of a capital increase, the shares may be traded from the completion thereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Shares shall remain negotiable following the Company&#146;s dissolution, and until the closing of its liquidation.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><U><B><font SIZE=2>ARTICLE 12 - INDIVISIUM OF SHARES - SEALS</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In respect of the Company the shares are indivisible. Joint owners of a share shall be represented before the Company by a single person they shall have appointed further to a common agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Whenever the ownership of several existing shares shall be necessary to exercise any right whatsoever and in particular to exercise the preferential right as hereabove provided for, or still, in the case of exchange or attribution of the shares further to an operation such as: capital reduction, capital increase by incorporation of reserves, merger, entitling to a new share against providing existing shares, isolated shares or shares in a number lower than the one required shall grant no right to the holder against the Company ; shareholders shall be personally responsible for the regrouping of the necessary number of shares.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The heirs, representatives or creditors of a shareholder shall under no circumstances whatsoever neither call for the seals on the Company's assets and documents requesting the partition or the sale by auction of a lot held by indivisium, nor interfere in whatever manner in its management ; they must - for the exercise of their rights - refer to the corporate inventories/ books and the decisions from the General Meeting.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8/22</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>


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<font size=2>All shares which form or shall form the registered capital shall always be assimilated to one another as regards tax costs. Consequently, all duties and taxes which for whatever reason could - with respect to any reimbursement of capital of these shares, or more generally, any distribution of their profit become claimable for only some of them, either during the existence of the Company or during its winding-up, shall be distributed among all shares representing the capital at the time of that or those reimbursements or distributions in such a way that all current or future shares shall confer on their owners - whilst taking into account the nominal amount of shares and rights not amortized of different categories, the same effective privileges giving them the right of receiving the same net amount.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>TITLE IV</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>MANAGEMENT OF THE COMPANY</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><u><b><font size=2>ARTICLE 13 &#150; BOARD OF DIRECTORS</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Company is managed by a Board of Directors made up of individuals or legal persons whose number is determined by the Ordinary Shareholders Meeting within the limits provided for by the law. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>A legal entity must, at the time of its appointment, designate an individual who will be its permanent representative at the Board of Directors. The duration of the office of this permanent representative is the same as that of the Director legal body he/she represents. In the event the legal body revokes its permanent representative, it must replace said representative immediately. The same rules apply in case of death or resignation of the permanent representative.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Each Director must own at least one share during his term of office. However there is no minimal obligation if the Director is, at the same time, a shareholder linked to the Company with an employment contract. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>If - at the time of his/her appointment - the Director does not own the requested number of shares or if during his/her term, he/she no longer owns the requested number of shares, he/she is considered to have automatically resigned, if he/she has failed to regularize his/her situation within three months.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:15.01%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Directors&#146; term of office is for six years; one year being calculated as the period in between two consecutive annual Ordinary General Shareholders Meetings. The tenure of a Director terminates at the end of the Ordinary General Shareholders Meeting which meets to vote upon the accounts of the then preceding fiscal year and is held in the year during which the office of said Director comes to an end.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Directors may always be re-elected, they may also be revoked at any time by the Shareholders' General Meeting.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:15.01%; text-indent:-15.01%;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9/22</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

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<font size=2>An individual person cannot  hold more than five positions as a member of a Board of Directors or a member of a  Supervisory Board in companies registered in France; the directorship held in controlled companies (as defined by Section L.233-16 of the French Commercial Code) by the Company, are not taken into account.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In case of death or resignation of one or several Director(s), the Board of Directors may make (a) provisional appointment(s), even between two General Shareholders Meetings.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Any such provisional appointment(s) made pursuant to the previous paragraph need to be ratified by the next following Ordinary Shareholders' General Meeting. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Failing ratification, the resolutions and acts approved beforehand by the Board remain nonetheless valid.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>When the number of Directors falls below the compulsory legal minimum, the remaining directors must summon immediately the Ordinary General Shareholders Meeting, in order to reach the full complement of the Board. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Any Director appointed in replacement of another Director whose tenure has not expired remains in office only for the remaining duration of the tenure of his predecessor.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>An employee of the Company may be appointed as a Director. His/her contract of employment must however correspond to an effective work. In this case, he/she does not lose the benefit of his/her employment contract. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The number of Directors who are also linked to the Company by an employment contract can not exceed one third of the Directors in office or five members. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Directors cannot be more than seventy-five years old. In case one of the Directors reaches this limit during his/her office, the older Director is automatically considered as having resigned at the next General Shareholders Meeting. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><U><B><font SIZE=2>ARTICLE 14 - MEETINGS OF THE BOARD</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><u><b><font size=2>14.1</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Board of Directors meets as often as the interests of the Company require. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><u><b><font size=2>14.2</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Chairman summons the Directors to the Meetings of the Board. The notification of the Meetings may be made by all means, whether oral or written.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10/22</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

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<font size=2>Furthermore, if there has not been a Board Meeting for two months, members of the Board representing at least one third of the members of the Board, or the Chief Executive Officer, may validly require the President to summon the Board. In such a case, they must indicate the agenda for the meeting.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In case a Labor Committee exists, the representatives of this committee - appointed pursuant to the Labor Code - must be invited to every meeting of the Board.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The meeting takes place either at the registered office or at any other place in France or abroad.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><u><b><font size=2>14.3</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>For the resolutions of the Board of Directors to be valid, at least one half of its members must be present. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Within the limits set out by Section L.225-37, paragraph 3 of the French Commercial Code and subject to the setting up of internal rules, the Board will be entitled to take into account for its quorum and majority rules, the participation of Directors by means of videoconference, still in respect of the legal provisions.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Any decision granting options to purchase new or existing shares of the Company to a Director who is also an employee, to the President or to the Chief Executive Officer of the Company (when he/she is also a Director), within the framework of an authorization given by the Extraordinary Shareholders' General Meeting, pursuant to Sections L.225-177 et seq. of the French Commercial Code, shall be taken by a majority vote among the Directors who are present or represented. The concerned Director as well as any other Director who is likely to be granted similar options cannot take part in the vote.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The resolutions of the Board shall be taken at a majority vote ; in case of a split decision, the President has casting vote.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><u><b><font size=2>14.4</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Any Director may grant a proxy &#150; even by letter, telegram, telex or fax &#150; to any other Director to represent him/her at a Board Meeting; however, each Director is not allowed to have more than one proxy per meeting. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><u><b><font size=2>14.5</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The copies or abstracts of the minutes of the Board of directors are certified by the Chairman of the Board, the Chief Executive Officer, the Director temporarily delegated in the duties of President or by a representative duly authorized for that purpose.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11/22</font></p></td>
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</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

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</DIV>


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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<U><B><font SIZE=2>ARTICLE 15 - POWERS OF THE BOARD</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Board of Directors defines the orientations of the Company's activity and supervises their implementation. Within the limits set out by the corporate purposes, and the powers expressly granted by law to the General Shareholders Meeting, the Board may deliberate upon the business of the Company and take any decisions thereof. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 16 - CHAIRMAN</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Board elects one of its members as Chairman of the Board, who must be an individual. The Board determines the duration of the office of the Chairman: it cannot exceed that of his/her office as a Director. The Board may revoke the Chairman at any time. The remuneration of the Chairman is decided by the Board of Directors.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Chairman represents the Board and organizes its work. The General Shareholders' Meeting must be informed of this work, by the Chairman. The Chairman is responsible for the good functioning of the Company's organisation and, in particular, has to check the ability of the Board members to perform their mission.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Pursuant to Section 706-43 of the French criminal proceedings Code, the Chairman may validly delegate to any person he/she chooses the powers to represent the Company within the framework of criminal proceedings which might be taken against the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Chairman of the Board of Directors cannot be over seventy-five years old. In case the Chairman reaches this limit during his/her tenure, he/she will automatically be considered as having resigned. However, his/her tenure is extended until the next  Board of Directors Meeting, during which his/her successor shall be appointed. Subject to this provision, the Chairman of the Board may always  be re-elected.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><u><b><font size=2>ARTICLE 16 bis - CHIEF EXECUTIVE OFFICER</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The general management of the Company is performed, under his responsibility, either by the Chairman of the Board or by another individual, elected by the Board and bearing the title of Chief Executive Officer.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The choice between these two methods of management belongs to the Board and must be made as provided for by these bylaws.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Shareholders and third parties will be informed of this choice in the conditions set out by the decree n&deg; 2002-803 of May, 3<sup>rd</sup>, 2002.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Chief Executive Officer is vested with the most extensive powers to act under all circumstances on behalf of the Company, within the limits set out by the corporate purposes, and subject to the powers expressly granted by law to the Board of Directors and the General Shareholders Meeting. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12/22</font></p></td>
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</DIV>


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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Chief Executive Officer represents the Company with third parties. The Company is bound by the acts of the Chief Executive Officer overcoming the corporate purposes, unless  proven that the third party knew such act overcame the corporate purposes or could not ignore so in light of the circumstances; yet, the sole publication of the bylaws is not enough to constitute a sufficient evidence thereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The remuneration of the Chief Executive Officer is decided by the Board of Directors. The Chief Executive Officer can be revoked at any time by the Board of Directors. If this revocation is not justified, damages may be allocated to the Chief Executive Officer, except when the Chief Executive Officer is also the Chairman of the Board.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Chief Executive Officer may not hold another position as Chief Executive Officer or member of a Supervisory Board in a company registered in France except when (i) such company is controlled (as referred to in Section L.233-16 of the French Commercial Code) by the Company and (ii) when this controlled company&#146;s shares are not quoted on a regulated market.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Chief Executive Officer cannot be over seventy years old. In case the Chief Executive Officer reaches this limit during his/her tenure, he/she will automatically be considered as having resigned. However, his/her tenure is extended until the next Board of Directors meeting, during which his/her successor shall be appointed.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><U><B><font SIZE=2>ARTICLE 17 - DEPUTY CHIEF EXECUTIVE </font></B></U><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Upon the Chief Executive Officer&#146;s proposal, the Board of Directors may appoint one or several individual(s) as Deputy Chief Executive(s) with the aim of assisting the Chief Executive Officer.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Deputy Chief Executive may be revoked at any time by the Board, upon proposal of the Chief Executive Officer.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In agreement with the Chief Executive Officer, the Board of Directors shall determine the scope and duration of the powers delegated to the Deputy Chief Executive. The remuneration of the Deputy Chief Executive is decided by the Board of Directors.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Towards third parties, the Deputy Chief Executive has the same powers as the Chief Executive Officer, among which the ability to represent the Company in court.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Deputy Chief Executive Officer cannot be over seventy years old. In case a Deputy Chief Executive Officer would reach this limit during his/her office, he/she would automatically be considered as having resigned. However, his/her office is extended until the soonest Board of Directors meeting, during which his/her successor shall be appointed. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In any case, the maximum number of Deputy Chief Executive(s) cannot exceed five.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>13/22</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

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</DIV>


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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
<U><B><font SIZE=2>ARTICLE 18 - AGREEMENTS SUBJECT TO AUTHORIZATION</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><u><b><font size=2>18.1</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Securities, endorsement of drafts and guarantees provided for by the Company shall be authorized by the Board of Directors in compliance with the conditions provided for by the law.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><u><b><font size=2>18.2</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Any agreement to be entered into - either directly or indirectly or through an intermediary - between the Company and one of its Directors, its Chief Executive Officer or Deputy Chief Executive, one of its shareholders holding more than 5% of the voting rights or, if it is a company, the company controlling it (as referred to in the Section L.233-3 of the French Commercial Code) is subject to a prior authorization of the Board of Directors. The same authorization applies to the agreements in which these persons are indirectly interested.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Such prior authorization is not required for agreements which, even though they are entered into by the above mentioned persons, concern usual operations which have been entered into on standard conditions. Nevertheless, such agreements have to be reported to the Chairman by the concerned person. Furthermore, the lists and purposes of these agreements shall be communicated by the Chairman to the Board of Directors and to the Statutory Auditors.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The same shall apply for agreements between the Company and another company, whenever one of the Directors, Chief Executive Officer(s) or Deputy Chief Executive(s) of the Company is the owner, a partner with unlimited liability, a manager, Director, Chief Executive Officer, member of the Executive Board or Supervisory Board of said company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The prior authorization of the Board of Directors is required pursuant to the conditions provided for by law. It being specified that said director shall not be taken into account for the quorum calculation and that his/her vote shall not be taken into consideration for the calculation of the majority. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 19 - PROHIBITED AGREEMENTS</font></B></U><font size=2> </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Directors who are not legal bodies are prohibited from taking out loans from the Company, under any form whatsoever, from getting an overdraft on a current account or otherwise, and benefiting from a guarantee from the Company for the agreements they have entered into with third parties.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The same prohibition applies to Chief Executive Officers, Deputy Chief Executives and to permanent representatives of the Directors legal bodies. It also applies to spouses, ascendants and descendants of the persons referred to in the previous paragraph, as well as to any interposed person.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>14/22</font></p></td>
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</DIV>


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</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>TITLE V</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>AUDITORS</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 20 - AUDITORS</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Ordinary Shareholders' General Meeting shall appoint one or two Auditors and substitute Auditors for a duration under the conditions and for the task complying with (French) Law.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Auditors are appointed for six fiscal years. Their mandate ends at the time of the General Meeting deciding upon the statements of the sixth fiscal year.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Auditor appointed to replace another shall only remain in service until the expiration of the mandate of his predecessor.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Auditors are indefinitely reeligible.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>One or several shareholders representing at least one twentieth of the registered capital may ask in court the objection to one or several Auditors appointed by the meeting and the designation of one or several other Auditors who shall provide their services replacing the objected Auditors. Under penalty of unacceptability of the request, the latter shall have to be made before the President of the Commercial Court who shall rule in chambers within a period of thirty days as from the rejected nomination.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Auditors must be called at the Board meeting during which the accounts of the ended financial year shall be closed and at all shareholders meetings.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 21 - EXPERTISE</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>One or several shareholders representing at least one twentieth of the registered capital may ask to the President of the Commercial Court to rule in chambers to designate an expert in charge of presenting a report on one or several management operations.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The report from the expert possibly appointed must be sent to the petitioners, to the Board, to the </font><i><font size=2>Minist&#232;re Public ("Attorney General")</font></i><font size=2>, to the Labor Committee and to the COB (</font><i><font size=2>French SEC</font></i><font size=2>) ; it shall also be attached to the report from the Auditor(s) prepared for the forthcoming General Meeting and should be granted the same advertising.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>15/22</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

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</DIV>


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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<U><B><font SIZE=2>TITLE VI</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>GENERAL MEETINGS</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><U><B><font SIZE=2>ARTICLE 22 - GENERAL RULES</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The annual Ordinary General Meeting shall have to meet every six month, following the end of each financial year subject to an extension of that period further to a court decision.</font></p> </td> </tr>
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      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2)</font></p></td>
      <td  valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Extraordinary Shareholders' General Meetings or Ordinary Shareholders' General Meetings called up extraordinarily may also be called up further to a notice from either the Board or the Auditors or the Agent designated by the court upon the petition of the Labor Committee or any interested person in case of an urgent matter or one or several shareholders representing at least one twentieth of the registered capital.</font></p></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3)</font></p></td>
      <td  valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The General Meetings are held at the head office or in any other place indicated in the notice which may even be out of the department of the head office.</font></p></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top ><font size=2>In case of an urgent matter, the Labor Committee may go to court and ask for the appointment of an Agent who will be in charge of convening the Shareholders' General Meeting.</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top ><font size=2>The Labor Committee may also require the registration of resolution proposals on the agenda.</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top ><font size=2>Two members of the Labor Committee, one from the </font><i><font size=2>"cadres techniciens et Agents de ma&#238;trise" </font></i><font size=2>category</font><i><font size=2>, </font></i><font size=2>and one from the "</font><i><font size=2>employ&#233;s et ouvriers" </font></i><font size=2>category, may be appointed by the Labor Committee in order to assist to the Shareholders' General Meetings. Upon their demand, they must be listened to during for all deliberations requiring an unanimous vote from the shareholders.</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4)</font></p></td>
      <td  valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The notices for General Meetings are sent to each shareholder at least fifteen days prior to these meetings either by simple mail or registered mail.</font></p></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top ><font size=2>Should the General Meeting not have been able to decide validly due to the failing of the required quorum, a second meeting is called up the same way as the first one and the calling up notice shall remind its date. However the time limit for such a notice is reduced to six days.</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5)</font></p></td>
      <td  valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The calling up notice shall indicate the corporate name possibly followed by its acronym, the corporate form, the amount of registered capital, the address of its registered offices, the corporate identification numbers with the French Trade Registry and the National Institute of Statistics and Economic Surveys (Institut National de la Statistique et des Etudes Economiques INSEE), the dates, hour and place of the meeting and its nature, extraordinary, ordinary or special together with its agenda.</font></p></td>
    </tr>
</table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:5.97%;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left></div>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:6.13%;text-align:justify;'><font size=2>&nbsp;</font></p>



<div align=left></div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

  <table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse; '>
    <tr>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>16/22</font></p></td>
    </tr>
  </table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>


<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>



<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:6.13%;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left style="margin-bottom: 0pt">

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top ><font size=2>Subject to miscellaneous questions which should be of no major importance, questions indicated on the agenda are mentioned in such a manner that their content and scope appear clearly without having to refer to other documents.</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top ><font size=2>One or several shareholders may under the conditions provided in Sections 128 to 131 of the decree n&deg; 67-236 dated March 23<sup>rd</sup>, 1967 require the recording on the agenda of resolution projects which do not concern the presentation of candidates to the Board.</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top ><font size=2>The Meeting cannot deliberate on a question which is not listed on the agenda; however, it may in all circumstances revoke one or several members from the Board and proceed with their replacement.</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top ><font size=2>The Meeting agenda cannot be modified on the second calling up.</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
        <td width="6%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6)</font></p> </td>
        <td colspan="3"  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>All shareholders attend the General Meeting whatever the number of their shares as long as they have been paid up for required payments.</font></p> </td> </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7)</font></p></td>
      <td colspan="3"  valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>A shareholder can only be represented by another shareholder or his/her spouse who may not be a shareholder.</font></p></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top ><font size=2>The mandate is granted for a single meeting ; however it can be granted for two meetings, an ordinary meeting and an extraordinary meeting held on the same day or within a period of seven days.</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top ><font size=2>The mandate granted for a meeting is valid for successive meetings called up covering the same agenda.</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top ><font size=2>The following documents must be attached to any proxy form sent to the shareholders :</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td width="2%"  valign=top >&nbsp;</td>
      <td width="4%" valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p></td>
      <td width="88%"  valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the meeting agenda</font></p></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
      <td valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p></td>
      <td  valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the text of the projects of resolutions presented by the Board and if need be by the shareholders or the Labor Committee.</font></p></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
      <td valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p></td>
      <td  valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>a summary on the corporate situation during the ended financial year with a chart on the corporate results during the past five financial years or each of the financial years since the incorporation of the Company if their number is inferior to five.</font></p></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
      <td valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p></td>
      <td  valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>a form for the sending of the documents and information listed under article 135 of the decree mentioned hereabove, informing the shareholder that he/she may obtain by simple request the automatic sending of the documents and information mentioned above for each forthcoming Shareholders' Meetings.</font></p></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top ><font size=2>The proxy form must inform the shareholder in a very clear manner that failing any indication of Agent, a favorable vote shall be issued in his/her name to adopt the resolution projects presented or consented by the Board. To issue any other vote, the shareholder must chose an Agent who accepts to vote in line with his/her mandate.</font></td>
    </tr>
</table>
<font size=2>&nbsp;</font></div>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:5.97%;text-align:justify;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

  <table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse; '>
    <tr>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>17/22</font></p></td>
    </tr>
  </table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>


<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:5.97%;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left style="margin-bottom: 0pt">

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top ><font size=2>The proxy must be signed by the represented shareholder and indicate his/her name, usual first name and domicile, the number of shares he/she holds and the number of votes related to his/her shares.</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top ><font size=2>The Agent namely designated on the proxy may not a substitute another person to him/herself.</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
        <td width="6%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>8)</font></p> </td>
        <td colspan="3"  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Meeting is presided over by the Chairman of the Board of Directors or, if he/she is absent, by a director duly delegated for that purpose by the Board. Otherwise, the Meeting elects its own president.</font></p> </td> </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top ><font size=2>The two members of the meeting with most votes shall, if they accept that position, fulfill the tasks of scrutinizers </font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top ><font size=2>The Meeting Committee designates the secretary who may be selected among persons who are not shareholders.</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9)</font></p></td>
      <td colspan="3"  valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>An attendance sheet is kept and contains&nbsp;:</font></p></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td width="2%"  valign=top >&nbsp;</td>
      <td width="3%" valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p></td>
      <td width="89%"  valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the name, usual first name and domicile of each shareholder, attending or represented, the number of shares he/she holds and the number of votes related to these shares.</font></p></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
      <td valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#45;</font></p></td>
      <td  valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>the name, usual first name and domicile of each Agent, the number of shares represented by his/her mandates and the number of votes related to his/her shares.</font></p></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top ><font size=2>Comments on the represented shareholders may not be mentioned on the attendance sheet provided the powers are attached thereto and their number is indicated.</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td colspan="3"  valign=top ><font size=2>The Meeting Committee shall certify as true the attendance sheet duly signed by the present or represented shareholders.</font></td>
    </tr>
</table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="6%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Secret ballot vote shall be adopted whenever claimed by the Meeting Committee or members of the meeting representing more than half of the registered capital represented at that Meeting.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="6%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>11)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>For all meetings, the quorum is counted on the total amount of shares forming the registered capital deducting those which are not entitled to the voting right by virtue of the legislative or regulatory provisions.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="6%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Each member of the meeting has as much votes as he/she possesses and represents shares, both under his/her personal name and as Agent, without limitations. However, in meetings held for the checking the shares invested in kind or specific advantages, each shareholder may not dispose of more than ten votes. </font></p> </td> </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top ><font size=2>In the case of beneficial ownership, the right to vote related to the share belongs to the beneficial owner in Ordinary General Meetings and to the bare owner in Extraordinary or Special General Meetings.</font></td>
    </tr>
</table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:5.97%;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>18/22</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>
</DIV>


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<p style='page-break-before:always'></p>



<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:7.51%;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left style="margin-bottom: 0pt">

<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top ><font size=2>The joint owners of shares must be represented by only one among them or by a sole Agent.</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top ><font size=2>Finally, the owner of the securities pledged again shall have the right to vote.</font></td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
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        <td width="6%" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>13)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Minutes shall witness resolutions voted in General Meetings and shall contain the required comments on a special register kept in the registered office under the conditions provided hereabove and signed by the members of the Board Committee.</font></p> </td> </tr>
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      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
    <tr>
      <td valign=top >&nbsp;</td>
      <td  valign=top ><font size=2>Copies or extracts of the minutes of the General Meeting are validly certified by the Chairman of the Board, a Director duly empowered to act as a Chief Executive Officer, or by the secretary of the meeting.</font></td>
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      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
    </tr>
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      <td valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>14)</font></p></td>
      <td  valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Shareholders exercise their rights related to communications and copies under the conditions provided by law.</font></p></td>
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      <td valign=top >&nbsp;</td>
      <td  valign=top >&nbsp;</td>
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      <td valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15 )</font></p></td>
      <td  valign=top >
        <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The votes of the Shareholder attending to the meeting by means of videoconference or telecommunications, according to regulatory provisions, shall be taken into account for the calculation of the quorum and the majority of the said meeting. </font></p></td>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:7.66%; text-indent:-7.66%;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left></div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 23 - EXTRAORDINARY GENERAL MEETINGS</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Extraordinary Shareholders' General Meeting is alone entitled to modify bylaws as far as all their provisions : any contrary clause shall be declared void. However, it may not increase shareholders' commitments subject to operations resulting from a regrouping of shares regularly carried out.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Extraordinary Shareholders Meeting may only deliberate under the quorum criteria provided by the relevant provisions of the French Commercial Code.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Resolutions shall be adopted by the majority of two third of the voting rights of the attending or represented shareholders, including the shareholders voting by mail.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>19/22</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

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</DIV>


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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
<U><B><font SIZE=2>ARTICLE 24 - ORDINARY GENERAL MEETINGS</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Ordinary Shareholders' General Meeting takes all decisions except those which are of the competence of the Extraordinary Shareholders' General Meeting.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Ordinary Shareholders Meeting may only deliberate under the quorum criteria provided by the relevant provisions of the French Commercial Code.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>It shall act by a majority of votes owned by the attending or represented shareholders, including the shareholders voting by mail.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>TITLE VII</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>INVENTORIES - PROFITS - RESERVES</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><u><b><font size=2>ARTICLE 25 - COMPANY&#146;S FISCAL YEAR</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Each fiscal year shall cover a period of twelve months starting on January 1<sup>st</sup> and ending on next December 31<sup>st</sup>.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><u><b><font size=2>ARTICLE 26 - INVENTORY &#150; ACCOUNTS</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Regularly accounting of corporate operations is held in compliance with Law.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>At the end of the each fiscal year, the Board draws up an inventory and the financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>A management report is prepared on the situation of the Company over the last fiscal year, its expected evolution, the major events which occurred between the date of the end of the last fiscal year and the date on which the management report is prepared and on its activities in research and development.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>All these documents are made available to the Auditors disposal according the provisions set forth by the law.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><U><B><font SIZE=2>ARTICLE 27 - FIXING, ALLOCATION AND DISTRIBUTION OF PROFITS</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>On the profit of each fiscal year subject to reduction of the amount of the previous law, an amount equal to 5 % of it shall be allocated in order to constitute the legal funds ; such allocation is</font><b><font size=2> </font></b><font size=2>no longer compulsory when the said funds amount to 10 % of the registered capital ; should the amount of the legal funds become inferior of the registered capital, such allocation should have to be implemented.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The General Meeting may allocate any amount to the appropriation of all optional, ordinary or extraordinary funds or carrying it forward.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>20/22</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

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</DIV>


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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The profit of the fiscal year reduced by the amount of previous losses and by the amount to be allocated to the reserves according any legal provisions or bylaws and increased by the amount of the carried forward profit constitute the distributable profit.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Further to the approval on the financial statement and the determination of the distributable amounts, the General Meeting decides the amount of the dividends to be distributed to the shareholders. The General Meeting may also decide on the distribution of amounts appropriated from the reserves it has available either to provide or complete dividends or as extraordinary distribution ; in such a case, the decision shall expressly indicate the reserve items from which the distributions are made. However, the dividends have to be priorly distributed from the distributable profit of the current fiscal year.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 28 - PAYMENT OF DIVIDENDS</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The terms and conditions of payment of dividends voted by the General Meeting are decided by the relevant meeting or, failing such decision, by the Board. However, the payment must occur within a period which cannot exceed nine months from the end of the fiscal year unless a court decision authorizes an extension of such time limit for payment.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Dividends which are not claimed within five years from their maturity date shall be bared.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>TITLE VIII</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-align:center;'><U><B><font SIZE=2>EXTENSION - DISSOLUTION - WINDING UP</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 29 - EXTENSION</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>At least one year prior to the expiration date of the Company, the Board must convene a Extraordinary Shareholders' General Meeting to decide the prorogation of the Company; such prorogation may not exceed 99 years.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Failing such Extraordinary Shareholders' General Meeting, any shareholder may fifteen days further to a formal notice sent to the Chairman of the Board, by registered letter remaining unsuccessful, request from the courts the appointment of a Agent in</font><b><font size=2> </font></b><font size=2>charge of convening the meeting hereabove.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 30 - DISSOLUTION</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Extraordinary Shareholders' Meeting may, at any time, decide the accelerated dissolution of the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>If - as a consequence of the losses showed by the Company's accounts, the net assets of the Company are reduced below one half of the registered capital of the Company, the Board of </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
      <td width="33%" nowrap valign=top style='border-top: solid black .5pt;'>
        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>21/22</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Directors must, within four months from the approval of the accounts showing this loss, convene an Extraordinary Shareholders' General Meeting in order to decide whether the Company should be dissolved before its statutory term.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>If the dissolution is not declared, the registered capital must - at the latest at the closing of the second fiscal year following that which has showed the losses and subject to the legal provisions concerning the minimum capital of </font><i><font size=2>soci&#233;t&#233;s anonymes</font></i><font size=2> be reduced by an amount at least equal to the losses which could not be charged on reserves, if during that period the net assets have not been restored up to an amount at least equal to one half of the capital.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Failing such meeting of the Extraordinary Shareholders' General Meeting as well as when the meeting has not been able validly to take its resolutions, any person with an interest to do so may file a claim before a court for the dissolution of the Company. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Company is in liquidation at the time of its dissolution, whatever the reason. Its legal personality remains for the needs of the liquidation until it is closed.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>During the liquidation, the General Meeting keeps the same powers as when the Company existed.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The shares remain negotiable until the liquidation is closed.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The dissolution of the Company is opposable to third parties only as from the date when the dissolution is published at the Trade and Corporate Registry.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 31 - WINDING UP</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The winding up of the Company shall be carried out under the conditions provided for sectuions L.237-1 to L.237-31 of the French Commercial Code and under the provisions of the decree of March 23<sup>rd</sup>, 1967 referred to for their application.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Further to the extinction of the liabilities, the reimbursement of the shares nominal (registered) capital shall be carried out. The liquidation bonus shall be distributed to the shareholders in a due proportion of their respective rights.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>TITLE IX</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>DISPUTES - ELECTION OF DOMICILE</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><U><B><font SIZE=2>ARTICLE 32 - DISPUTES</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Any disputes arising during the existence or the winding up of the Company either between the shareholders and the company or between the shareholders themselves and related to corporate matters shall be submitted to the Courts of the location of the registered office.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Association &#150; January 2009 English translation for information purposes only</font></p></td>
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        <p align="right" style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22/22</font></p></td>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>EXHIBIT 8.1. </font></B></U><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>LIST OF EDAP TMS S.A. SUBSIDIARIES</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><u><b><font size=2>(as of March 31, 2009)</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p align=center style='margin:0in;text-indent:7.83%;text-align:left'><u><b><font size=2>Name of Subsidiary</font></b></u></p> </td>
        <td width="50%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin:0in;margin-bottom:.0001pt'><u><b><font size=2>Juridiction of Incorporation</font></b></u></p> </td> </tr>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="50%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="50%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>EDAP TMS France  S.A.</font></p> </td>
        <td width="50%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin:0in;margin-bottom:.0001pt;text-indent:66.0pt'><font size=2>France</font></p> </td> </tr>
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        <td width="50%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>EDAP Technomed S.r.l.</font></p> </td>
        <td width="50%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin:0in;margin-bottom:.0001pt;text-indent:66.0pt'><font size=2>Italy</font></p> </td> </tr>
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        <td width="50%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>EDAP Technomed, Inc. </font></p> </td>
        <td width="50%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin:0in;margin-bottom:.0001pt;text-indent:66.0pt'><font size=2>United States</font></p> </td> </tr>
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        <td width="50%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>EDAP Technomed Co. Ltd.</font></p> </td>
        <td width="50%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin:0in;margin-bottom:.0001pt;text-indent:66.0pt'><font size=2>Japan</font></p> </td> </tr>
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        <td width="50%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>EDAP Technomed Sdn Bhd</font></p> </td>
        <td width="50%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin:0in;margin-bottom:.0001pt;text-indent:66.0pt'><font size=2>Malaysia</font></p> </td> </tr>
    <tr>
        <td width="50%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>EDAP TMS GmbH</font></p> </td>
        <td width="50%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin:0in;margin-bottom:.0001pt;text-indent:66.0pt'><font size=2>Germany</font></p> </td> </tr>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="50%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>
        <td width="50%" valign=top style='padding:0in 3.5pt 0in 3.5pt'>
            <p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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            <p style='margin-left:0pt;text-indent:10.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:146.25pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>EXHIBIT 12.1</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Annual Certification</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Pursuant to Section 302 of Sarbanes-Oxley Act of 2002</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>I, Marc Oczachowski, Chief Executive Officer of EDAP TMS S.A., certify that: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>1.</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>I have reviewed this annual report on Form 20-F of EDAP TMS S.A.;</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>2.</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; </font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>3.</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; </font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>4.</font></p> </td>
        <td width="585" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>The Company&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and we have: </font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>a)</font></p> </td>
        <td width="567" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; </font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:3.99%;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>b)</font></p> </td>
        <td width="567" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;</font></p> </td> </tr></table>
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            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>c)</font></p> </td>
        <td width="567" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Evaluated the effectiveness of the Company&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:3.99%;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>d)</font></p> </td>
        <td width="567" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Disclosed in this report any change in the Company&#146;s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company&#146;s internal control over financial reporting; and</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:3.99%;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>5.</font></p> </td>
        <td width="585" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>The Company&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company&#146;s auditors and the audit committee of the Company&#146;s board of directors (or persons performing the equivalent functions): </font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:3.99%;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p> </td>
        <td width="3%" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>a)</font></p> </td>
        <td width="567" valign=top >
            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company&#146;s ability to record, process, summarize and report financial information; and</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:12.12%;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>b)</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company&#146;s internal control over financial reporting. </font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:3.99%;text-align:justify;'><font size=2>&nbsp;</font></p>

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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Dated: March 31, 2009</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><u><font size=2>/s/ MARC OCZACHOWSKI&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></u></p> </td> </tr>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>&nbsp;</font></p> </td>
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            <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75pt; text-indent:-.75pt'><font size=2>Title: Chief Executive Officer</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>EXHIBIT 12.2</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Annual Certification</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Pursuant to Section 302 of Sarbanes-Oxley Act of 2002</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>I, Eric Soyer, Chief Financial Officer of EDAP TMS S.A., certify that: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>1.</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>I have reviewed this annual report on Form 20-F of EDAP TMS S.A.;</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>2.</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; </font></p> </td> </tr></table>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>3.</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; </font></p> </td> </tr></table>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>The Company&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and we have: </font></p> </td> </tr></table>
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            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>a)</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; </font></p> </td> </tr></table>
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            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>b)</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;</font></p> </td> </tr></table>
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            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>c)</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Evaluated the effectiveness of the Company&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</font></p> </td> </tr></table>
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            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>d)</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Disclosed in this report any change in the Company&#146;s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company&#146;s internal control over financial reporting; and</font></p> </td> </tr></table>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>5.</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>The Company&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company&#146;s auditors and the audit committee of the Company&#146;s board of directors (or persons performing the equivalent functions): </font></p> </td> </tr></table>
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            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>a)</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company&#146;s ability to record, process, summarize and report financial information; and</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:3.99%;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>b)</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company&#146;s internal control over financial reporting. </font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

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            <p style='margin:0in;margin-bottom:.0001pt;text-indent:2.25pt'><font size=2>Dated: March 31, 2009</font></p> </td>
        <td width="41%" nowrap valign=top >
            <p style='margin:0in;margin-bottom:.0001pt'><u><font size=2>/s/ ERIC SOYER&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></u></p> </td> </tr>
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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>&nbsp;</font></p> </td>
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            <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75pt; text-indent:-.75pt'><font size=2>Title: Chief Financial Officer</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>EXHIBIT 13.1</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Annual Certification</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.38%;text-align:justify;'><font size=2>Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of EDAP TMS S.A. (the &#147;Company&#148;), does hereby certify, to such officer's knowledge, that: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.38%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.38%;text-align:justify;'><font size=2>The Annual Report on Form 20-F for the year ended December 31, 2008 of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the company. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:6.38%;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Dated: March 31, 2009 </font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><u><font size=2>/s/ MARC OCZACHOWSKI&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></u></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Marc Oczachowski</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Chief Executive Officer</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin:0in;margin-bottom:.0001pt'><font size=2>Dated: March 31, 2009</font></p> </td>
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            <p style='margin:0in;margin-bottom:.0001pt'><u><font size=2>/s/ ERIC SOYER &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></u></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Eric Soyer</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p> </td>
        <td width="241" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Chief Financial Officer</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act has been provided to EDAP TMS S.A. and will be retained by EDAP TMS S.A. and furnished to the Securities and Exchange Commission or its staff upon request.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>EXHIBIT 15.1</font></B></U></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><b><font size=2>Consent of Independent Registered Public Accounting Firm</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:15.79%;text-align:justify;'><font size=2>We consent to the incorporation by reference into the Registration Statements (Form F-3, No. 333-136811, Form F-3, No. 333-147762 and Form F-3, No. 333-152738) of EDAP TMS S.A. (the &#147;Company&#148;) of our report dated March 31, 2009, with respect to the consolidated financial statements of the Company and its subsidiaries included in the Annual Report (Form 20-F) for the year ended December 31, 2008.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>ERNST &amp;YOUNG Audit</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>/s/ LAURENT CHAPOULAUD</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>__________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Represented by </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Laurent Chapoulaud</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Lyon, France</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>March 31, 2009</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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