NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Tiger X Medical, Inc. ("Tiger X" or the "Company"), formerly known as Cardo Medical, Inc., previously operated as an orthopedic medical device company specializing in designing, developing and marketing high performance reconstructive joint devices and spinal surgical devices.

As discussed below in the discontinued operations section, we sold our Reconstructive and Spine Divisions during the quarter ended June 30, 2011. Our future operations will include the collection and management of our royalty income earned in connection with the Asset Purchase Agreement with Arthrex. The Company will also be evaluating future investment opportunities and uses for its cash.

On June 10, 2011, the Company filed an amendment to its Certificate of Incorporation with the Secretary of State of Delaware for the purpose of changing its name to Tiger X Medical, Inc. The amendment was effective as of June 10, 2011.

Basis of Presentation

The accompanying condensed consolidated balance sheet as of December 31, 2010, which has been derived from the Company's audited financial statements as of that date, and the unaudited condensed consolidated financial information of the Company as of June 30, 2011 and for the three and six months ended June 30, 2011 and 2010, has been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. In the opinion of management, such financial information includes all adjustments considered necessary for a fair presentation of the Company's financial position at such date and the operating results and cash flows for such periods. Operating results for the interim period ended June 30, 2011 are not necessarily indicative of the results that may be expected for the entire year.

Certain information and footnote disclosure normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the United States Securities and Exchange Commission ("SEC"). These unaudited financial statements should be read in conjunction with our audited financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010 filed on March 31, 2011, as amended by the Company's Annual Report on Form 10-K/A filed on May 2, 2011 and May 6, 2011.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Tiger X, Accelerated Innovation, Inc. ("Accelerated"), Uni-Knee LLC ("Uni") and Cervical Xpand LLC ("Cervical"). All significant intercompany transactions have been eliminated in consolidation.

Restatement

The Company completed the sale of its Reconstructive Division assets on June 10 2011 which resulted in a gain of $10,527,000. The Company completed the sale of its Spine Division assets on April 4, 2011 which resulted in a gain of $2,286,000. The total gain from the sale of the discontinued Reconstructive and Spine Divisions recorded during the three and six months ended June 30, 2011 amounted to $12,813,000. The Company determined that the income tax expense associated with this gain amounted to $560,000 and the gain should have been reflected net of this income tax effect in the Company's consolidated statements of operations for the three and six months ended June 30, 2011. The restatement resulted in the following corrections as of, and for the three and six periods ended June 30, 2011.

		Originally
		Reported		Restated		Difference
Balance Sheet:
Accounts payable and accrued expenses	$	270	$	830	$	560
Accumulated deficit		(11,599)		(12,159)		(560)
Statements of Operations:
For the three months ended June 30, 2011
Gain from sale of discontinued Reconstructive and Spine
Divisions, net of income taxes		12,813		12,253		(560)
Net income		11,396		10,836		(560)
For the six months ended June 30, 2011
Gain from sale of discontinued Reconstructive and Spine
Divisions, net of income taxes		12,813		12,253		(560)
Net income		11,075		10,515		(560)
Statement of Cash Flows:
Net cash provided by operating activities
Net income		11,075		10,515		(560)
Gain from sale of discontinued Reconstructive and Spine
Divisions, net of income taxes		12,813		12,253		(560)
Accounts payable and accrued expenses		(1,386)		(826)		560
Net cash provided by (used in) investing activities
Proceeds from sale of Reconstructive and Spine Divisions		17,586		17,026		(560)

Discontinued Operations

On October 7, 2010, the Company's management and Board of Directors decided to put substantially all of its assets up for sale. The assets determined to be held for sale were inventories, intellectual properties, and property and equipment of its reconstructive products line (the "Reconstructive Division") and spine products line (the "Spine Division"). The Company decided to put the assets of its Reconstructive and Spine Divisions up for sale primarily because it did not have sufficient working capital, and was not able to procure such financial resources through equity or debt financing, in order to fully execute a profitable sales strategy.

On January 24, 2011, the Company entered into an Asset Purchase Agreement with Arthrex, Inc. ("Arthrex"), pursuant to which the Company agreed to sell the assets of the Reconstructive Division to Arthrex in exchange for cash consideration of $9.96 million, plus the cost of the Company's inventory and property and equipment relating to the Reconstructive Division calculated as of the closing date (the "Arthrex Asset Purchase Agreement"). The Arthrex Asset Purchase Agreement also provides for the Company to receive royalty payments equal to 5% of net sales of the Company's products made by Arthrex on a quarterly basis for a term up to and including the 20th anniversary of the closing date. Following the execution of the Arthrex Asset Purchase Agreement, Arthrex delivered to the Company a $250,000 deposit to be credited against the cash consideration due at closing (the "Arthrex Deposit"). From the cash consideration paid at closing, $1,159,000, was deposited with an escrow agent for a period of twelve months from the closing date to be used for any adjustments to the value of the Company's inventory and property, plant and equipment relating to the Reconstructive Division and for post closing indemnification claims which may be asserted by Arthrex with respect to unassumed liabilities.

The Company completed the sale of the Reconstructive Division on June 10 2011. The total cash consideration received by the Company from Arthrex amounted to $14,586,000, which is comprised of $9,960,000 plus inventory with a preliminary value of $2,908,000 and property and equipment with a preliminary value of $1,718,000. From this amount, the $250,000 Arthrex Deposit was repaid and $1,159,000 was deposited with an escrow agent to be held for twelve months for any potential adjustments to the purchase price as discussed above. The total gain on the sale of the Reconstructive Division assets amounted to $10,527,000, which represents the excess of the cash consideration over the carrying amount of the assets sold of $4,059,000.

On April 4, 2011, the Company entered into and closed an Asset Purchase Agreement with Altus Partners, LLC, a Delaware limited liability company ("Altus"), pursuant to which the Company sold substantially all of the assets of the Spine Division in exchange for cash consideration of $3,000,000 (the "Altus Asset Purchase Agreement"). Pursuant to the terms of the Altus Asset Purchase Agreement, $2,700,000 of the purchase price was paid at the closing and $300,000 was deposited into escrow with an escrow agent for a period of 90 days from the closing date (assuming there are no disputes) to be used for any adjustments to the closing value of the Company's inventory and property and equipment. The Company is awaiting finalization of the closing value, and expects any adjustments to occur during the quarter ended September 30, 2011.

Of the proceeds received from Altus pursuant to the Asset Purchase Agreement, the Company repaid $974,000 of the outstanding amounts under the Arthrex Note (as defined in Note 2), along with $3,000 in accrued interest. The total gain on the sale of the Spine Division assets amounted to $2,286,000.

The total gain associated with the above sales of the assets of the Reconstructive and Spine divisions amounted to $12,813,000. The income tax expense associated with the gain amounted to $560,000 and the gain is presented net of the income tax effect on the accompanying statements of operations for the three and six months ended June 30, 2011.

Pursuant to the sales transactions with Arthrex and Altus, the total aggregate amounts placed in escrow accounts were $1,459,000. These amounts are reflected as restricted cash on the accompanying condensed consolidated balance sheet as of June 30, 2011.

Total sales associated with the discontinued divisions reported as discontinued operations for the three months ended June 30, 2011 and 2010, were $214,000 and $1,077,000, respectively. Total sales associated with the discontinued Reconstructive and Spine Divisions reported as discontinued operations for the six months ended June 30, 2011 and 2010, were $761,000 and $1,979,000, respectively. The total pretax loss associated with the discontinued Reconstructive and Spine Divisions, including the discontinued corporate support for those activities, reported as discontinued operations for the three months ended June 30, 2011 and 2010, were $1,170,000 and $1,346,000, respectively. The total pretax loss associated with the discontinued Reconstructive and Spine Divisions, including the discontinued corporate support for those activities, reported as discontinued operations for the six months ended June 30, 2011 and 2010, were $1,366,000 and $2,617,000, respectively. The only continuing operations reflected are expenses associated with business insurance, legal and accounting fees that the Company will continue to incur. The prior year financial statements for June 30, 2010 have been reclassified to present the operations of the Reconstructive and Spine Divisions as discontinued operations.

The assets of the discontinued operations are presented separately under the caption "Assets held for Sale" in the accompanying condensed consolidated balance sheet at December 31, 2010 and consisted of the following:

		June 30,		December 31,
(In thousands)		2011		2010
		(unaudited)
Inventories	$	-	$	2,990
Property and equipment		-		1,775
	$	-	$	4,765

Use of Estimates

Financial statements prepared in accordance with U.S. GAAP require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Among other things, management makes estimates relating to allowances for doubtful accounts, net realizable value of assets, share-based payment and deferred income tax assets. Given the short operating history of Tiger X, actual results could differ from those estimates.

Net Loss Per Share

Basic net (loss) income per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net (loss) income per share is computed by giving effect to all dilutive potential common shares that were outstanding during the period. Dilutive potential common shares consist of incremental common shares issuable upon exercise of stock options or warrants. No dilutive potential common shares are included in the computation of any diluted per share amount when a loss from continuing operations is reported by the Company because they are anti-dilutive.

Concentrations

As of June 30, 2011, the Company had three hospital customers that accounted for 33.8%, 32.9% and 21.3% of its net accounts receivable.

As of December 31, 2010, the Company had three hospital customers that accounted for 28.7%, 12.7 % and 11.7% of its net accounts receivable.

Reclassifications

Certain amounts from prior periods have been reclassified to conform to the current period presentation due to the treatment of discontinued operations.

Recent Accounting Pronouncements and Updates

There are no recently issued accounting pronouncements or standards updates that the Company has yet to adopt that are expected to have a material effect on its financial position, results of operations, or cash flows.