sc13da110042002_09102014.htm

CUSIP NO. 14141R101

1	NAME OF REPORTING PERSON BROADFIN HEALTHCARE MASTER FUND, LTD.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION CAYMAN ISLANDS
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 8,874,992*
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 8,874,992*
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,874,992*
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.98%*
14	TYPE OF REPORTING PERSON CO

* See Item 5 of Amendment No. 1 the Schedule 13D.

CUSIP NO. 14141R101

1	NAME OF REPORTING PERSON BROADFIN HEALTHCARE FUND, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 8,874,992*
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 8,874,992*
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,874,992*
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.98%*
14	TYPE OF REPORTING PERSON PN

* See Item 5 of Amendment No. 1 the Schedule 13D.

CUSIP NO. 14141R101

1	NAME OF REPORTING PERSON BROADFIN HEALTHCARE OFFSHORE FUND, LTD
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION CAYMAN ISLANDS
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 8,874,992*
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 8,874,992*
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,874,992*
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.98%*
14	TYPE OF REPORTING PERSON CO

* See Item 5 of Amendment No. 1 the Schedule 13D.

CUSIP NO. 14141R101

1	NAME OF REPORTING PERSON BROADFIN ADVISORS, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 8,874,992*
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 8,874,992*
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,874,992*
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.98%*
14	TYPE OF REPORTING PERSON OO

* See Item 5 of Amendment No. 1 the Schedule 13D.

CUSIP NO. 14141R101

1	NAME OF REPORTING PERSON BROADFIN CAPITAL, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 8,874,992*
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 8,874,992*
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,874,992*
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.98%*
14	TYPE OF REPORTING PERSON OO

* See Item 5 of Amendment No. 1 the Schedule 13D.

CUSIP NO. 14141R101

1	NAME OF REPORTING PERSON KEVIN KOTLER
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 8,874,992*
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 8,874,992*
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,874,992*
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.98%*
14	TYPE OF REPORTING PERSON IN

* See Item 5 of Amendment No. 1 the Schedule 13D.

CUSIP NO. 14141R101

1	NAME OF REPORTING PERSON GREGORY D. CASCIARO
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER - 0 -
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER - 0 -
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - 0 -
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0%
14	TYPE OF REPORTING PERSON IN

CUSIP NO. 14141R101

1	NAME OF REPORTING PERSON R. MICHAEL KLEINE
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER - 0 -
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER - 0 -
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - 0 -
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0%
14	TYPE OF REPORTING PERSON IN

CUSIP NO. 14141R101

1	NAME OF REPORTING PERSON SAMUEL E. NAVARRO
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER - 0 -
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER - 0 -
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - 0 -
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0%
14	TYPE OF REPORTING PERSON IN

CUSIP NO. 14141R101

The following constitutes Amendment No. 1 to the Schedule 13D filed by the undersigned (“Amendment No. 1”). This Amendment No. 1 amends the Schedule 13D as specifically set forth herein.

Item 2.

Identity and Background.

Item 2 is hereby amended and restated to read as follows:

(a) This statement is filed by:

(i)

Broadfin Healthcare Master Fund, Ltd., a Cayman Islands exempted company (“Broadfin Master”);

(ii)

Broadfin Healthcare Fund, L.P., a Delaware limited partnership (“Broadfin LP”), which serves as a feeder fund of Broadfin Master;

(iii)

Broadfin Healthcare Offshore Fund, Ltd, a Cayman Islands exempted company (“Broadfin Offshore”), which serves as a feeder fund of Broadfin Master;

(iv)

Broadfin Advisors, LLC, a Delaware limited liability company (“Broadfin Advisors”), which serves as the general partner of Broadfin LP;

(v)

Broadfin Capital, LLC, a Delaware limited liability company (“Broadfin Capital”), which serves as the investment manager of each of Broadfin Master, Broadfin LP and Broadfin Offshore;

(vi)

Kevin Kotler, who serves as the managing member of each of Broadfin Capital and Broadfin Advisors;

(vii)

Gregory D. Casciaro;

(viii)

R. Michael Kleine; and

(ix)

Samuel E. Navarro.

Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.” Each of the Reporting Persons is party to the Joint Filing and Solicitation Agreement, as further described in Item 6. Accordingly, the Reporting Persons are hereby filing a joint Schedule 13D.

(b) The address of the principal office of each of Broadfin Master and Broadfin Offshore is 20 Genesis Close, Ansbacher House, Second Floor, P.O. Box 1344, Grand Cayman KY1-1108, Cayman Islands. The address of the principal office of each of Broadfin LP, Broadfin Advisors, Broadfin Capital and Mr. Kotler is 237 Park Avenue, 9th Floor, New York, New York 10017. The officers and directors of each of Broadfin Master and Broadfin Offshore and their principal occupations and business addresses are set forth on Schedule A and are incorporated by reference in this Item 2. The principal business address for Mr. Casciaro is 827 Crescent Avenue, San Mateo, California 94401. The principal business address for Mr. Kleine is 2790 Walsh Avenue, Santa Clara, California 95051. The principal business address for Mr. Navarro is 124 W. Putnam Avenue, Greenwich, Connecticut 06807.

CUSIP NO. 14141R101

(c) The principal business of Broadfin Master is purchasing, holding and selling securities for investment purposes. Each of Broadfin LP and Broadfin Offshore serve as a feeder fund of Broadfin Master. The principal business of Broadfin Advisors is serving as the general partner of Broadfin LP. The principal business of Broadfin Capital is serving as the investment manager of each of Broadfin Master, Broadfin LP and Broadfin Offshore. The principal occupation of Mr. Kotler is serving as the managing member of each of Broadfin Capital and Broadfin Advisors. The principal occupation of Mr. Casciaro is serving as a director of QT Vascular Ltd. The principal occupation of Mr. Kleine is serving as the President and Chief Executive Officer of Miramar Labs, Inc. The principal occupation of Mr. Navarro is serving as the Managing Partner of Gravitas Healthcare, LLC.

(d) No Reporting Person, nor any person listed on Schedule A, annexed hereto, has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) No Reporting Person, nor any person listed on Schedule A, annexed hereto, has during the last five years, been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) Messrs. Kotler, Casciaro, Kleine and Navarro are citizens of the United States of America. The citizenship of the persons listed on Schedule A is set forth therein.

Item 4.

Purpose of Transaction.

Item 4 is hereby amended to add the following:

On September 10, 2014, Broadfin Master and its affiliates (“Broadfin”) delivered a letter to the Issuer nominating Gregory D. Casciaro, R. Michael Kleine, Kevin Kotler and Samuel E. Navarro (the “Nominees”) for election to the Board of Directors of the Issuer (the “Board”) at the 2014 annual meeting of stockholders (the “2014 Annual Meeting”).

Also on September 10, 2014, Broadfin delivered a letter to the Board disclosing its nomination of the Nominees for election to the Board at the 2014 Annual Meeting. In the letter, Broadfin expressed its belief that change is urgently needed on the Board in order to enhance shareholder value. Broadfin also disclosed its belief that such change should be brought about through a thoughtful and collaborative process between the current Board and Broadfin, rather than a costly and time consuming proxy contest. A copy of the letter is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 5.

Interest in Securities of the Issuer.

Items 5(a) – (c) are hereby amended and restated to read as follows:

(a) The aggregate percentage of Shares reported owned by each person named herein is based upon 88,931,216 Shares outstanding as of May 1, 2014, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 7, 2014.

As of the close of business on September 10, 2014, Broadfin Master beneficially owned 8,874,992 Shares, constituting approximately 9.98% of the Shares outstanding. Each of Broadfin LP and Broadfin Offshore, as feeder funds of Broadfin Master, may be deemed to beneficially own the 8,874,992 Shares owned by Broadfin Master, constituting approximately 9.98% of the Shares outstanding. Broadfin Advisors, as the general partner of Broadfin LP, may be deemed to beneficially own the 8,874,992 Shares owned by Broadfin Master, constituting approximately 9.98% of the Shares outstanding. Broadfin Capital, as the investment manager of Broadfin Master, may be deemed to beneficially own the 8,874,992 Shares owned by Broadfin Master, constituting approximately 9.98% of the Shares outstanding. Mr. Kotler, as the managing member of Broadfin Capital, may be deemed to beneficially own the 8,874,992 Shares owned by Broadfin Master, constituting approximately 9.98% of the Shares outstanding.

CUSIP NO. 14141R101

Excluded from Broadfin’s beneficial ownership is 9,875,200 Shares issuable upon the conversion of 98,752 shares of the Issuer’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”) due to a conversion cap that precludes the holder thereof from converting the Series A Preferred Stock to the extent that the holder would, after such exercise, beneficially own (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended) in excess of 9.98% of the Shares outstanding (the “Beneficial Ownership Limitation”). Upon written notice to the Issuer, Broadfin may increase the Beneficial Ownership Limitation to any other percentage specified in such notice, which increase in the Beneficial Ownership Limitation shall take effect on the 61st day after delivery to the Issuer. In the event Broadfin delivered written notice to the Issuer increasing the Beneficial Ownership Limitation to 19.98% and subsequently fully converted the 98,752 shares of the Series A Preferred Stock into 9,875,200 Shares, Broadfin would beneficially own an aggregate of 18,750,192 Shares, constituting approximately 18.98% of the Shares outstanding.

As of the close of business on September 10, 2014, none of Messrs. Casciaro, Kleine, and Navarro directly owned any Shares.

Each Reporting Person, as a member of a “group” with the other Reporting Persons for the purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, may be deemed the beneficial owner of the Shares directly owned by the other Reporting Persons. Each Reporting Person disclaims beneficial ownership of such Shares except to the extent of his or its pecuniary interest therein.

(b) By virtue of their respective positions with Broadfin Master, each of Broadfin Capital and Mr. Kotler may be deemed to have sole power to vote and dispose of the Shares reported owned by Broadfin Master.

Item 6.

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Item 6 is hereby amended to add the following:

On September 10, 2014, the Reporting Persons entered into a Joint Filing and Solicitation Agreement in which, among other things, the Reporting Persons agreed (a) to the joint filing on behalf of each of them of statements on Schedule 13D, and any amendments thereto, with respect to the securities of the Issuer and (b) to solicit proxies for the election of the Nominees at the 2014 Annual Meeting. The Joint Filing and Solicitation Agreement is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

Pursuant to letter agreements, Broadfin has agreed to indemnify each of Messrs. Casciaro, Kleine, and Navarro against any and all claims of any nature arising from the solicitation of proxies at the 2014 Annual Meeting and any related transactions. A form of such letter agreement is attached hereto as Exhibit 99.3 and is incorporated by reference herein.

CUSIP NO. 14141R101

Broadfin has also signed compensation letter agreements with each of Messrs. Casciaro, Kleine and Navarro, pursuant to which Broadfin agrees to pay each of Messrs. Casciaro, Kleine and Navarro: (i) $7,500 in cash as a result of the submission by Broadfin of its nomination of each of Messrs. Casciaro, Kleine and Navarro to the Issuer and (ii) $17,500 in cash upon the filing of a definitive proxy statement by Broadfin with the Securities and Exchange Commission relating to the solicitation of proxies in favor of each of Messrs. Casciaro, Kleine and Navarro’s election as a director at the 2014 Annual Meeting. Pursuant to the compensation letter agreements, each of Messrs. Casciaro, Kleine and Navarro has agreed to use the after-tax proceeds from such compensation to acquire securities of the Issuer (the “Nominee Shares”) at such time that each of Messrs. Casciaro, Kleine and Navarro shall determine, but in any event no later than 14 days after receipt of such compensation. If elected or appointed to serve as a director of the Board, each of Messrs. Casciaro, Kleine and Navarro agrees not to sell, transfer or otherwise dispose of any Nominee Shares within two (2) years of his election or appointment as a director; provided, however, in the event that the Issuer enters into a business combination with a third party, each of Messrs. Casciaro, Kleine and Navarro may sell, transfer or exchange the Nominee Shares in accordance with the terms of such business combination. A form of such compensation letter agreement is attached hereto as Exhibit 99.4 and is incorporated by reference herein.

Mr. Navarro is an investor in certain affiliates of Broadfin Master, but has no voting or dispositive power over any securities held by Broadfin Master or its affiliates.

Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer.

Item 7.

Material to be Filed as Exhibits.

Item 7 is hereby amended to add the following exhibits:

99.1

Letter to the Board, dated September 10, 2014.

99.2

Joint Filing and Solicitation Agreement by and among Broadfin Healthcare Master Fund, Ltd., Broadfin Healthcare Fund, L.P., Broadfin Healthcare Offshore Fund, Ltd, Broadfin Advisors, LLC, Broadfin Capital, LLC, Kevin Kotler, Gregory D. Casciaro, R. Michael Kleine and Samuel E. Navarro, dated September 10, 2014.

99.3

Form of Indemnification Agreement.

99.4

Form of Compensation Letter Agreement.

99.5

Form of Power of Attorney.

CUSIP NO. 14141R101

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: September 11, 2014	BROADFIN HEALTHCARE MASTER FUND, LTD.

	By:	/s/ Kevin Kotler
	Name:	Kevin Kotler
	Title:	Director

	BROADFIN HEALTHCARE FUND, L.P.

	By	Broadfin Advisors, LLC General Partner

	By:	/s/ Kevin Kotler
	Name:	Kevin Kotler
	Title:	Managing Member

	BROADFIN HEALTHCARE OFFSHORE FUND, LTD

	By:	/s/ Kevin Kotler
	Name:	Kevin Kotler
	Title:	Director

	BROADFIN ADVISORS, LLC

	By:	/s/ Kevin Kotler
	Name:	Kevin Kotler
	Title:	Managing Member

	BROADFIN CAPITAL, LLC

	By:	/s/ Kevin Kotler
	Name:	Kevin Kotler
	Title:	Managing Member


	/s/ Kevin Kotler
	KEVIN KOTLER Individually and as attorney-in-fact for Gregory D. Casciaro, R. Michael Kleine and Samuel E. Navarro

CUSIP NO. 14141R101

SCHEDULE A

Directors and Officers of each of Broadfin Healthcare Master Fund, Ltd. and Broadfin Healthcare Offshore Fund, Ltd

Name and Position	Principal Occupation	Principal Business Address	Citizenship

Kevin Kotler Director*

Roger H. Hanson Director	Managing Director of DMS Offshore Investment Services (“DMS”)	DMS House 20 Genesis Close P.O. Box 314 Grand Cayman KY1-1104 Cayman Islands	Cayman Islands

Tammy W. Seymour Director	Associate Director of DMS	DMS House 20 Genesis Close P.O. Box 314 Grand Cayman KY1-1104 Cayman Islands	Cayman Islands

*Mr. Kotler is a Reporting Person and, as such, the information with respect to Mr. Kotler called for by Item 2 of Schedule 13D is set forth therein.

September 10, 2014

Board of Directors

Cardica, Inc.

900 Saginaw Drive

Redwood City, California 94063

Dear Members of the Board,

As the largest shareholder of Cardica, Inc. (the “Company” or “Cardica”), it is very important for us at Broadfin Capital LLC (“Broadfin”) that all shareholders are given a fair opportunity to meaningfully participate in, and impact, the strategic choices facing Cardica. In our view, at this critical time for the Company, the Board of Directors (the “Board”) has a duty to consider seriously the shareholders’ input on how to address the numerous and important issues our Company faces.

Over the past few months, we have made every effort to engage constructively with the Board to initiate such an exchange of ideas and to offer our strategic insight and help. We have been investing in medical technology companies of all types and sizes over the last 20 years and our understanding of value creation in the industry, especially in the context of several years of due diligence we have conducted on Cardica, can be valuable to the Company at this crucial stage. Unfortunately, it has become clear that this Board is resistant to shareholder involvement despite their fiduciary responsibility to represent the will of the shareholders and they are unwilling to allow the Company’s largest shareholder to have any meaningful impact in the decisions determining the course of the Company. Shareholders, as the true owners of the Company, are entitled to meaningful representation in the boardroom.

Broadfin’s long-term commitment to the Company is so strong, that we even offered to enter into a confidentiality agreement and become restricted from trading in securities of Cardica for an indefinite period so that we may be able to have meaningful discussions with the Board and management and assist in finding solutions for the serious issues we see Cardica struggling with. In response, the Board devised a complicated system involving us asking specific questions in writing and the Board answering in writing at its sole discretion with only whatever information they choose to divulge on a case by case basis thus de facto leaving us still in the dark except for just enough information to keep us fully restricted for an indefinite period of time. Such a one-sided arrangement is a clear sign of a Board that has no real interest of entertaining healthy shareholder engagement.

We further proposed that Cardica’s directors work constructively with us to enhance the composition of the Board through the addition of two highly-qualified, independent directors with relevant experience and fresh perspective. Despite our relentless efforts to lead a productive dialogue, to date the Board has refused to accept meaningful change to its composition and negotiations have yielded no agreement and little progress towards one. In fact, despite making our candidates available for meetings with the Board, rather than considering them seriously and working with us to address shareholder concerns in a thoughtful and deliberate manner, the Board instead unilaterally has sought to hand-pick and interview other candidates.

Accordingly, today we are submitting in full compliance with the requirements of the Company’s Bylaws a formal nomination of four individuals, Gregory D. Casciaro, R. Michael Kleine, Kevin Kotler and Samuel E. Navarro, for election to the Board at the 2014 Annual Meeting. We have conducted a thorough and thoughtful search for the best-suited candidates for Cardica and firmly believe that our four nominees are those candidates and will each be a valuable addition to the Board. They collectively represent a highly experienced group with complementary skills sets, are all independent (except for me), and can add significant value to the proper functioning and effectiveness of the Board. Furthermore, we are confident that they can work effectively together as a group with the incumbent directors.

We continue to firmly believe that the cost and time of a proxy contest can and should be avoided. While change on the Board is, in our view, urgently needed there is no legitimate reason why such change should not be brought about through a thoughtful and collaborative process between the current Board and Broadfin, as Cardica’s largest shareholder. Our objective is to bring shareholder representation and experienced and well respected operators on the Board. Enhancing the Board with the addition of our highly-qualified candidates will only help the Board and management to navigate through the complex issues facing the Company and enhance value for the benefit of all shareholders.

We understand that the Company has set November 12, 2014 as the date for the 2014 Annual Meeting and September 17, 2014 as the record date for such meeting. Accordingly, we expect that proxy materials will soon be filed by the Company with the Securities and Exchange Commission (“SEC”) and we currently plan to file proxy materials of our own to the extent no amicable resolution has been reached. The coming days until the filing of such proxy materials with the SEC represent a critical window of opportunity for a constructive compromise that avoids the necessity of a contested shareholder election this year. Once proxy materials have been filed with the SEC, this window of opportunity will close and we will stay fully committed to our position of pursuing a proxy contest.

We urge the Board to immediately engage with us in a productive, negotiated process to bring shareholder representation to the Board and avoid the cost and embarrassment of a public contest. If you will not work with us promptly to resolve matters amicably, we will be left with no choice but to solicit proxies to secure the Board representation that we believe is best for all shareholders. We expect that all four of our nominees will receive broad shareholder support if it comes to a vote. A well-governed public company owes its shareholders a more enlightened approach to governance and a more responsible stewardship of shareholder wealth than squandering capital to ward off shareholder input in the boardroom. The Board and senior management have badly misjudged investor sentiment before and we believe the apparent desire to force a proxy contest, rather than pursue a reasonable settlement, will constitute another serious judgment in error by the Board should it go down this path. We encourage you again to consider avoiding this outcome by working constructively with us now to appoint the highly qualified candidates we have nominated and avoid a proxy contest. We remain available to move forward with you expeditiously on this basis should you so desire.

Sincerely,

/s/ Kevin Kotler

Kevin Kotler

Broadfin Capital LLC

JOINT FILING AND SOLICITATION AGREEMENT

WHEREAS, certain of the undersigned are stockholders, direct or beneficial, Cardica, Inc., a Delaware corporation (the “Company”);

WHEREAS, Broadfin Healthcare Master Fund, Ltd., a Cayman Islands exempted company, Broadfin Healthcare Fund, L.P., a Delaware limited partnership, Broadfin Healthcare Offshore Fund, Ltd, a Cayman Islands exempted company, Broadfin Advisors, LLC, a Delaware limited liability company, Broadfin Capital, LLC, a Delaware limited liability company, and Kevin Kotler (together, “Broadfin”), R. Michael Kleine, Samuel E. Navarro and Gregory D. Casciaro wish to form a group for the purpose of seeking representation on the Board of Directors of the Company (the “Board”) at the 2014 annual meeting of stockholders of the Company (including any other meeting of stockholders held in lieu thereof, and any adjournments, postponements, reschedulings or continuations thereof, the “2014 Annual Meeting”) and for the purpose of taking all other action necessary to achieve the foregoing.

NOW, IT IS AGREED, this 10th day of September 2014 by the parties hereto:

1. In accordance with Rule 13d-1(k)(1)(iii) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), each of the undersigned (collectively, the “Group”) agrees to the joint filing on behalf of each of them of statements on Schedule 13D, and any amendments thereto, with respect to the securities of the Company. Each member of the Group shall be responsible for the accuracy and completeness of his/its own disclosure therein, and is not responsible for the accuracy and completeness of the information concerning the other members, unless such member knows or has reason to know that such information is inaccurate. Broadfin or its representative shall provide each member of the Group with copies of all Schedule 13D filings and other public filings to be filed on behalf of such member prior to the filing or submission thereof.

2. So long as this agreement is in effect, each of the undersigned shall provide written notice to Olshan Frome Wolosky LLP (“Olshan”) of (i) any of their purchases or sales of securities of the Company; or (ii) any securities of the Company over which they acquire or dispose of beneficial ownership. Notice shall be given no later than 24 hours after each such transaction.

3. Each of the undersigned agrees to form the Group for the purpose of (i) soliciting proxies or written consents for the election of the persons nominated by the Group to the Board at the 2014 Annual Meeting, (ii) taking such other actions as the parties deem advisable, and (iii) taking all other action necessary or advisable to achieve the foregoing.

4. Broadfin shall have the right to pre-approve all expenses incurred in connection with the Group’s activities and agrees to pay directly all such pre-approved expenses.

5. Each of the undersigned agrees that any SEC filing, press release or stockholder communication proposed to be made or issued by the Group or any member of the Group in connection with the Group’s activities set forth in Section 3 shall be first approved by Broadfin, or its representatives, which approval shall not be unreasonably withheld.

6. The relationship of the parties hereto shall be limited to carrying on the business of the Group in accordance with the terms of this Agreement. Such relationship shall be construed and deemed to be for the sole and limited purpose of carrying on such business as described herein. Nothing herein shall be construed to authorize any party to act as an agent for any other party, or to create a joint venture or partnership, or to constitute an indemnification. Nothing herein shall restrict any party’s right to purchase or sell securities of the Company, as he/it deems appropriate, in his/its sole discretion, provided that all such sales are made in compliance with all applicable securities laws.

7. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute but one and the same instrument, which may be sufficiently evidenced by one counterpart.

8. In the event of any dispute arising out of the provisions of this Agreement or their investment in the Company, the parties hereto consent and submit to the exclusive jurisdiction of the Federal and State Courts in the State of New York.

9. Any party hereto may terminate his/its obligations under this Agreement on 24 hours’ written notice to all other parties, with a copy by fax to Steve Wolosky at Olshan, Fax No. (212) 451-2222.

10. Each party acknowledges that Olshan shall act as counsel for both the Group and Broadfin and its affiliates relating to their investment in the Company.

11. Each of the undersigned parties hereby agrees that this Agreement shall be filed as an exhibit to a Schedule 13D pursuant to Rule 13d-1(k)(1)(iii) under the Exchange Act.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.

	BROADFIN HEALTHCARE MASTER FUND, LTD.

	By:	/s/ Kevin Kotler
	Name:	Kevin Kotler
	Title:	Director

	BROADFIN HEALTHCARE FUND, L.P.

	By	Broadfin Advisors, LLC General Partner

	By:	/s/ Kevin Kotler
	Name:	Kevin Kotler
	Title:	Managing Member

	BROADFIN HEALTHCARE OFFSHORE FUND, LTD

	By:	/s/ Kevin Kotler
	Name:	Kevin Kotler
	Title:	Director

	BROADFIN ADVISORS, LLC

	By:	/s/ Kevin Kotler
	Name:	Kevin Kotler
	Title:	Managing Member

	BROADFIN CAPITAL, LLC

	By:	/s/ Kevin Kotler
	Name:	Kevin Kotler
	Title:	Managing Member


	/s/ Kevin Kotler
	KEVIN KOTLER

	/s/ R. Michael Kleine
	R. MICHAEL KLEINE

	/s/ Samuel E. Navarro
	SAMUEL E. NAVARRO

	/s/ Gregory D. Casciaro
	GREGORY D. CASCIARO

BROADFIN HEALTHCARE MASTER FUND, LTD.

c/o Broadfin Capital, LLC

237 Park Avenue, 9th Floor

New York, New York 10017

September __, 2014

Re: Cardica, Inc.

Dear ______:

Thank you for agreeing to serve as a nominee for election to the Board of Directors of Cardica, Inc. (the “Company”) in connection with the proxy solicitation that Broadfin Healthcare Master Fund, Ltd. and its affiliates (collectively, the “Broadfin Group”) is considering undertaking to nominate and elect directors at the Company’s 2014 annual meeting of stockholders, or any other meeting of stockholders held in lieu thereof, and any adjournments, postponements, reschedulings or continuations thereof (the “Broadfin Group Solicitation”). Your outstanding qualifications, we believe, will prove a valuable asset to the Company and all of its stockholders. This letter (“Agreement”) will set forth the terms of our agreement.

The members of the Broadfin Group agree to jointly and severally indemnify and hold you harmless against any and all claims of any nature, whenever brought, arising from the Broadfin Group Solicitation and any related transactions, irrespective of the outcome; provided, however, that you will not be entitled to indemnification for claims arising from your gross negligence, willful misconduct, intentional and material violations of law, criminal actions or material breach of the terms of this agreement; provided further, that upon your becoming a director of the Company, this indemnification shall not apply to any claims made against you in your capacity as a director of the Company. This indemnification will include any and all losses, liabilities, damages, demands, claims, suits, actions, judgments, or causes of action, assessments, costs and expenses, including, without limitation, interest, penalties, reasonable attorneys’ fees, and any and all reasonable costs and expenses incurred in investigating, preparing or defending against any litigation, commenced or threatened, any civil, criminal, administrative or arbitration action, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation asserted against, resulting, imposed upon, or incurred or suffered by you, directly or indirectly, as a result of or arising from the Broadfin Group Solicitation and any related transactions (each, a “Loss”).

In the event of a claim against you pursuant to the prior paragraph or the occurrence of a Loss, you shall give the Broadfin Group prompt written notice of such claim or Loss (provided that failure to promptly notify the Broadfin Group shall not relieve us from any liability which we may have on account of this Agreement, except to the extent we shall have been materially prejudiced by such failure). Upon receipt of such written notice, the Broadfin Group will provide you with counsel to represent you. Such counsel shall be reasonably acceptable to you. In addition, you will be reimbursed promptly for all Losses suffered by you and as incurred as provided herein. The Broadfin Group may not enter into any settlement of loss or claim without your consent unless such settlement includes a release of you from any and all liability in respect of such claim.

You hereby agree to keep confidential and not disclose to any party, without the consent of the Broadfin Group, any confidential, proprietary or non-public information (collectively, “Information”) of the Broadfin Group, its affiliates or members of its Schedule 13D group which you have heretofore obtained or may obtain in connection with your service as a nominee hereunder. Notwithstanding the foregoing, Information shall not include any information that is publicly disclosed by the Broadfin Group, its affiliates or members of its Schedule 13D group or any information that you can demonstrate is now, or hereafter becomes, through no act or failure to act on your part, otherwise generally known to the public.

Notwithstanding the foregoing, if you are required by applicable law, rule, regulation or legal process to disclose any Information you may do so provided that you first promptly notify the Broadfin Group so that the Broadfin Group or any member thereof may seek a protective order or other appropriate remedy or, in the Broadfin Group’s sole discretion, waive compliance with the terms of this Agreement. In the event that no such protective order or other remedy is obtained or the Broadfin Group does not waive compliance with the terms of this Agreement, you may consult with counsel at the cost of the Broadfin Group and you may furnish only that portion of the Information which you are advised by counsel is legally required to be so disclosed and you will request that the party(ies) receiving such Information maintain it as confidential.

All Information, all copies thereof, and any studies, notes, records, analysis, compilations or other documents prepared by you containing such Information, shall be and remain the property of the Broadfin Group and, upon the request of a representative of the Broadfin Group, all such information shall be returned or, at the Broadfin Group’s option, destroyed by you, with such destruction confirmed by you to the Broadfin Group in writing.

This letter agreement shall be governed by the laws of the State of New York, without regard to the principles of the conflicts of laws thereof.

* * *

If you agree to the foregoing terms, please sign below to indicate your acceptance.

Very truly yours,

BROADFIN HEALTHCARE MASTER FUND, LTD.


By:
Name:	Kevin Kotler
Title:	Director

ACCEPTED AND AGREED:

__________________________

NAME