Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

In this quarterly report, we include some forward-looking statements that involve substantial risks and uncertainties and other factors that may cause our operational and financial activity and results to differ from those expressed or implied by these forward-looking statements. In many cases, you can identify these statements by forward-looking words such as "may," "expect," "anticipate," "believe," "estimate," "plan," "intend" and "continue," or similar words. You should read statements that contain these words carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial condition, or state other "forward-looking" information.

You should not place undue reliance on these forward-looking statements. The section captioned "Management's Discussion and Analysis of Financial Condition and Plan of Operations," as well as any cautionary language in this quarterly report, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from our expectations.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Because of the risks and uncertainties, the forward-looking events and circumstances discussed in this quarterly report might not occur.

You should read the following Management's Discussion and Analysis of Financial Condition and Results of Operations in conjunction with the unaudited condensed consolidated financial statements and the related notes that appear elsewhere in this report and in conjunction with our discussion and analysis in our annual report on Form 10-K for the year ended December 31, 2007 which we filed on March 31, 2008.

Summary of Significant Accounting Policies and Estimates

This discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to accounts receivable, property and equipment, stock based compensation and contingencies. We base our estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which 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. The assumptions and bases for estimates used in preparing our consolidated financial statements are set forth as significant accounting policies in Note 3 of the notes to the condensed consolidated financial statements included in this quarterly report and are summarized below:

Intangible Assets. Intangible assets consist primarily of developed technology and patents (developed and purchased), trademarks, trade names and customer relationships. Intangible assets with an indefinite life, including certain trademarks and trade names, are not amortized. The useful life of indefinite life intangible assets is assessed annually to determine whether events and circumstances continue to support an indefinite life. Amortization is computed using the straight-line method over the estimated period of benefit. The valuation of these intangible assets is based upon estimates as to the current value of each patent and the period of benefit and such estimates are subject to fluctuations. The value of a particular patent could fluctuate based upon factors, such as competing technology or the creation of new applications, which are not accounted for in making, but could affect, the estimates used.

We owned through our wholly-owned subsidiaries twelve additional patent titles, in various countries in Europe, Switzerland, Canada, Japan, Australia and United States, for various applications and uses of our products, including, among others, osteoporosis remediation, autologous glue and combination with growth factor. As result of these twelve patent titles, we own more than 200 patent applications around the world most of which have thus far been granted by various countries by their official government patent office, including most European Union countries, Switzerland, Canada, Japan, Australia, and in the United States by the US Department of Commerce Patent and Trademark Office. The cost of acquisition, expenses incurred on most of our approved patents and on the successful defenses of most of these patents are fully amortized in our subsidiary financial statement and are not included in Intangible Assets in our financial statement.

Allowance for Doubtful Accounts. We estimate uncollectibility of trade accounts receivable by analyzing historical bad debts, customer concentrations, customer creditworthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. We consider these factors to be the best available indicators of the likelihood of collection of trade accounts receivable. However, they are subject to uncertainty, and collectibility cannot be precisely determined.

Investment in Limited Partnership. We own an investment in a limited partnership, which is accounted for under the equity method of accounting. Under this method, the initial investment is recorded at cost. Subsequently, the investment is increased or decreased for our pro-rata share of the partnership's income and losses. No ready trading market exists for this partnership interest by which we can determine with any certainty its value. Moreover, because it is initially valued at cost, which in turn is based upon negotiations between us and the limited partnership, this initial valuation may or may not reflect the value which an independent third party would assign to the partnership interest. This investment is illiquid, and, should we determine to liquidate it, the proceeds received may vary greatly from the valuation reflected on our balance sheet.

Results of Operation for the Nine Months Ended September 30, 2008 Compared to the Nine Months Ended September 30, 2007.

As discussed below, our operations are conducted outside the United States of America, and as such, our functional currency is the Euro and not the US Dollar. In order to comply with accounting principles generally accepted in the United States of America, our financial statements, as well as the following discussion regarding our results of operations are in terms of U.S. dollars. Accordingly, part of the variance in revenues and expenses discussed below is due to the fluctuating exchange rates in addition to the other factors discussed.

Net sales, which are solely attributable to our wholly-owned French subsidiary, totalled approximately $407,500 for the nine months ended September 30, 2008, an increase of approximately $59,600, or 17%, from approximately $347,900 for the nine months ended September 30, 2007. This increase is partially attributable to an increase in sales of products in the orthopaedic surgery area in export during the second quarter 2008 and is partially due to the fluctuating exchange rates between Euro and US Dollar.

Cost of sales was approximately $272,800 for the nine months ended September 30, 2008, an increase of approximately $107,500, or 65%, from approximately $165,300 for the nine months ended September 30, 2007. The gross profit percentage for the nine months ended September 30, 2008 and 2007 was approximately 33% and 52%, respectively. Costs of sales increased primarily due to the increase in our revenues for the second quarter. The decrease in our gross margin during the nine months ended September 30, 2008 was due primarily to the sale of the inventory during that period which had a higher cost when compared to the prior year.

Research and development expenses were approximately $46,500 for the nine months ended September 30, 2008, an increase of approximately $6,600, or 17%, from approximately $39,900 for the nine months ended September 30, 2007. This increase is principally due to the fluctuating exchange rates between Euro and US Dollar.

Consulting and professional fees were approximately $162,300 for the nine months ended September 30, 2008, an increase of approximately $2,800, or 2%, from approximately $159,500 for the nine months ended September 30, 2007. This increase is due to the fluctuating exchange rates between Euro and US Dollar, as well as a decrease in costs in real terms.

Administrative expenses were approximately $227,900 for the nine months ended September 30, 2008 a decrease of approximately $4,900 or 2 %, from approximately $232,800 for the nine months ended September 30, 2007. This decrease was due to a decrease in various administrative expenses.

Total other income (expense) was an expense of approximately $(164,500) for the nine months ended September 30, 2008 an increase of approximately $9,800 or 6%, from an expense of approximately $(154,700) for the nine months ended September 30, 2007. This increase resulted primarily from an increase in interest expense on our notes payable and secondarily was due to the fluctuating exchange rates between Euro and US Dollar.

As a result of the above, our net loss for the nine months ended September 30, 2008 totalled approximately $523,800 or $.05 per share compared to a net loss of approximately $449,000 or $.04 per share for the nine months ended September 30, 2007. These losses per share were based on weighted average common shares outstanding of 11,414,120 and 11,353,817 for the nine months ended September 30, 2008 and 2007, respectively.

Results of Operation for the Three Months Ended September 30, 2008 Compared to the Three Months Ended September 30, 2007.

Net sales, which are solely attributable to our wholly-owned French subsidiary, totalled approximately $84,800 for the three months ended September 30, 2008, a decrease of approximately $20,300, or 19%, from approximately $105,100 for the three months ended September 30, 2007. This decrease is partially attributable to a decrease in sales of products in the orthopaedic surgery area in export out of Europe during the third quarter 2008 and is partially due to the fluctuating exchange rates between Euro and US Dollar.

Cost of sales was approximately $62,000 for the three months ended September 30, 2008, an increase of approximately $21,600 or 53%, from approximately $40,400 for the three months ended September 30, 2007. The gross profit percentage for the nine months ended September 30, 2008 and 2007 was approximately 27% and 62%, respectively. This increase is partially attributable to the sale of the inventory during that period which had a higher cost when compared to the prior year and is partially due to the fluctuating exchange rates between Euro and US Dollar.

Research and development expenses were approximately $11,200 for the three months ended September 30, 2008, a decrease of approximately $2,600 or 19% from approximately $13,800 for the three months ended September 30, 2007. This decrease is principally due to decrease of the operating cost of the subsidiary in charge of research and development.

Consulting and professional fees were approximately $47,500 for the three months ended September 30, 2008, a decrease of approximately $1000 or 2%, from approximately $48,500 for the three months ended September 30, 2007. This decrease is principally due to a decrease in general overhead.

Administrative expenses were approximately $70,300 for the three months ended September 30, 2008, a decrease of approximately $20,200, or 22%, from approximately $90,500 for the three months ended September 30, 2007. This decrease was due to a decrease in various administrative expenses

Total other income (expense) was a net expense of approximately $(54,700) for the three months ended September 30, 2008, a decrease of approximately $3,600, or 6 %, from an expense of approximately $(58,300) for the three months ended September 30, 2007. This decrease is principally due to the contingency provision incurred in last year period which is not present in the current period.

As a result of the above, our net loss for the three months ended September 30, 2008 totalled approximately $180,200 or $.02 per share, compared to a net loss of approximately $162,700 or $.01 per share for the three months ended September 30, 2007. These losses per share were based on weighted average common shares outstanding of 11,443,787 and 11,353,817 for the three months ended September 30, 2008 and 2007, respectively.

Financial Condition, Liquidity and Capital Resources

As shown in the accompanying condensed consolidated financial statements, we had net losses of approximately $523,800 and $449,000 for the nine months ended September 30, 2008 and 2007, respectively. Management

believes that it is likely that we will continue to incur net losses through at least end of 2008. We had a working capital deficiency of approximately 1,203,730 and $848,700 at September 30, 2008 and 2007 respectively. We also had a stockholders' deficiency of approximately $3,476,500 and $3,790,067 at September 30, 2008 and 2007 respectively.

The company received a commitment from one of its shareholders to supply the company during 2008 with funds up to $250,000. During 2nd and 3rd quarter of 2008, the company received short-term loans of $7,500 and $66,000 respectively, from its shareholders. Management believes that these funds will provide sufficient working capital to operate through 2008.