(Mark
one)
|
|
o
|
Annual
Report Under Section 13 or 15(d) of The Securities Exchange
Act of
1934
|
For
the fiscal year ended _________________
|
|
x
|
Transition
Report Under Section 13 or 15(d) of The Securities Exchange
Act of
1934
|
For
the transition period from October 1, 2004 to June 30,
2005
|
Minnesota
|
41-1458152
|
(State
of incorporation)
|
(IRS
Employer ID Number)
|
Page
|
||
Part
I
|
||
Item
1
|
Description
of Business
|
1
|
Item
2
|
Description
of Property
|
29
|
Item
3
|
Legal
Proceedings
|
30
|
Item
4
|
Submission
of Matters to a Vote of Security Holders
|
30
|
Part
II
|
||
Item
5
|
Market
for Common Equity, Related Stockholders’ Matters, and Small Business
Issuer Purchases of Equity Securities
|
30
|
Item
6
|
Management’s
Discussion and Analysis or Plan of Operation
|
31
|
Item
7
|
Financial
Statements
|
33
|
Item
8
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
33
|
Item
8A
|
Controls
and Procedures
|
34
|
Part
III
|
||
Item
9
|
Directors,
Executive Officers, Promoters and Control Persons; Compliance
with Section
16(a) of the Exchange Act
|
34
|
Item
10
|
Executive
Compensation
|
38
|
Item
11
|
Security
Ownership of Certain Beneficial Owners and Management
|
39
|
Item
12
|
Certain
Relationships and Related Transactions
|
41
|
Item
13
|
Exhibits
and Reports on Form 8-K
|
42
|
Item
14
|
Principal
Accountant Fees and Services
|
43
|
Signatures
|
45
|
·
|
Opened
a new manufacturing and production facility (October
2005);
|
·
|
Deployed
a direct sales force to the market (July 2004 - July
2005);
|
·
|
Developed
a treatment protocol for prostate cancer with a leading oncologist
(January 2005);
|
·
|
Treated
the first patient (October 2004);
|
·
|
Commenced
production of the
131
Cs
seed (August 2004);
|
·
|
Filed
five additional patent applications for
131
Cs
and
90
Y
processes (November 2003 - August
2004);
|
·
|
Obtained
a Nuclear Regulatory Commission Sealed Source and Device Registration
required by the Washington State Department of Health and the
FDA
(September 2004);
|
·
|
Received
a Radioactive Materials License from the Washington State Department
of
Health (July 2004);
|
·
|
Implemented
an ISO-9000 Quality Management System and production operating
procedures
(under continuing development);
|
·
|
Signed
a Commercial Work for Others Agreement between Battelle (manager
of the
Pacific Northwest National Laboratory or PNNL) and IsoRay Medical,
allowing initial production of seeds through 2006
at
PNNL (April 2004);
|
·
|
Raised
over $10.3 M in debt and equity funding (September 2003 - July
2005)
|
·
|
Obtained
favorable Medicare reimbursement codes for the Cs-131 brachytherapy
seed
(November 2003);
|
·
|
Obtained
FDA 510(k) approval to market the first product: the
131
Cs
brachytherapy seed (March 2003);
|
·
|
Completed
initial radioactive seed production, design verification, computer
modeling of the radiation profile, and actual dosimetric data
compiled by
the National Institute of Standards and Technology and PNNL (October
2002); and
|
·
|
Obtained
initial patent for
131
Cs
isotope separation and purification (May 2000).
|
Stages
|
Characteristics
of prostate cancer
|
T1
or T2
|
Localized
in the prostate
|
T3
or T4
|
Locally
advanced
|
N+
or M+
|
Spread
to pelvic lymph nodes (N+)or distant organs
(M+)
|
·
|
A
twelve-year study published in the Volume 4, Issue 1 (2005) edition
of the
journal
Brachytherapy,
revealed
that high-risk prostate cancer patients treated with brachytherapy
using
Palladium-103 experienced greater success than patients treated
with
radical prostatectomy. The study was conducted by Dr. Jerrold
Sharkey of
the Urology Health Center in New Port Richey, Florida, et al.
and
retrospectively reviewed 1,707 prostate cancer patients, treated
from 1992
to 2004, 80% of whom were treated with brachytherapy and 20%
of whom were
treated with surgery. The study reported that high-risk patients
treated
with brachytherapy showed an 88% cure rate compared to
a 43% cure
rate obtained from surgery at 12 years. The results for intermediate-risk
patients reflected a success rate of 89% with seed therapy compared
to a
58% success rate with surgery at 12 years.
|
·
|
A
twelve-year clinical study published in the 2004 Supplement of
the
International
Journal of Radiation Oncology, Biology and Physics
,
reported that the relative survival rate is 84% for low risk
cancer
patients, 78% for intermediate risk cancer patients and 68% for
high risk
cancer patients. The study was conducted by Dr. Lou Potters,
et al. of the
New York Prostate Institute and included 1,504 patients treated
with
brachytherapy between 1992 and 2000.
|
·
|
A
study published in the January 2004 issue of the
International
Journal of Radiation Oncology, Biology and Physics
,
reported that brachytherapy, radical prostatectomy, high-dose
external
beam radiation therapy and combined therapies produced similar
cure rates.
The study was conducted by Dr. Patrick Kupelian, Dr. Louis Potters,
et al.
and included 2,991 patients with Stage T1 or T2 prostate cancer.
Of these
patients, 35% of patients underwent surgery, 16% received low-dose
EBRT,
10% received high-dose EBRT, 7% received combination therapy
and 32%
received brachytherapy. After five years, the biochemical relapse-free
survival rate was 83% for brachytherapy, 81% for radical prostatectomy,
81% for high-dose EBRT, 77% for combination therapy and 51% for
low-dose
EBRT.
|
·
|
A
nine-year clinical study published in the March 2000 issue of
the
International
Journal of Radiation Oncology, Biology and Physics
,
reported that 83.5% of patients treated with the Pd-103 device
were
cancer-free at nine years. The study was conducted by Dr. John
Blasko of
the Seattle Prostate Institute and included 230 patients with
clinical
stage T1 and T2 prostate cancer. Only 3% experienced cancer recurrence
in
the prostate.
|
·
|
Results
from a 10-year study conducted by Dr. Datolli and Dr. Wallner
published in
the
International
Journal of Radiation Oncology, Biology and Physics
in
September 2002, were presented at the October 2002 American Society
for
Therapeutic Radiology and Oncology (ASTRO) conference confirming
the
effectiveness of the Pd-103 seed in patients with aggressive
cancer who
previously were considered poor candidates for brachytherapy.
The 10-year
study was comprised of 175 patients with Stage T2-T3 prostate
cancer
treated from 1991 through 1995. Of these patients, 79 percent
remained
completely free of cancer without the use of hormonal therapy
or
chemotherapy.
|
·
|
A
study by the Northwest Prostate Institute in Seattle, Washington
reported
79% disease-free survival at 12 years for brachytherapy in combination
with external beam radiation (Ragde,
et
al
.,
Cancer,
July 2000). The chance of cure from brachytherapy is nearly 50%
higher
than for other therapies for men with large cancers (PSA 10-20)
and over
twice as high as other therapies for men with the largest cancers
(PSA
20+) (K. Wallner,
Prostate
Cancer: A Non-Surgical Perspective,
Smart Medicine Press, 2000).
|
Treatment
|
Seed
Implants
|
External
Radiation
|
Prostatectomy
|
Disease-Free
Survival
|
64%
- 85%
|
59%
- 78%
|
65%
|
Disease-Specific
Survival
|
98%
- 100%
|
75%
- 97%
|
84%
- 85%
|
Treatment
|
Seed
implants
|
External
Radiation
|
Prostatectomy
(nerve
sparing)
|
Prostatectomy
(non
nerve-sparing)
|
Rate
of Impotence
|
10%
- 50%
|
40%
- 60%
|
14%
- 56%
|
65%
- 90%
|
Urinary
Incontinence
|
1%
|
1%
|
Not
Reported
|
7%
- 8%
|
· |
Continue
to introduce the IsoRay
131
Cs
seed into the U.S. brachytherapy market
.
Utilizing a direct sales organization and selected channel partners,
IsoRay Medical intends to capture a leadership position by expanding
overall use of the brachytherapy procedure for prostate cancer,
capturing
much of the incremental market growth and taking market share
from
existing competitors.
|
· |
Create
a state-of-the-art manufacturing process
.
IsoRay Medical has constructed a state-of- the-art manufacturing
facility
in Richland, Washington in its newly leased facility, to implement
our
proprietary manufacturing process which is designed to improve
profit
margins and provide adequate manufacturing capacity to support
future
growth and ensure quality control. If Initiative 297 presents
a strategic
roadblock to the Company, IsoRay plans to construct a permanent
manufacturing facility in another state, Working with leading
scientists,
IsoRay Medical intends to design and create a proprietary separation
process to manufacture enriched barium, a key source material
for
131
Cs,
to ensure adequate supply and greater manufacturing efficiencies.
Also
planned is a value-added repackaging service to supply pre-loaded
needles,
stranded seeds and pre-loaded cartridges used in the implant
procedure.
IsoRay Medical plans to enter into a long-term program with a
leading
brachytherapy seed automation design and engineering company
to design and
build a highly automated manufacturing process to help ensure
consistent
quality and improve profitability.
|
· |
Introduce
Cesium-131 therapies for other solid cancer tumors
.
IsoRay Medical intends to partner with other companies to develop
the
appropriate delivery technology and therapeutic delivery systems
for
treatment of other solid cancer tumors such as breast, lung,
liver,
pancreas, neck, and brain cancer. IsoRay Medical's management
believes
that the first major opportunities may be for the use of Cesium-131
in
adjunct therapy for the treatment of residual lung and breast
cancers.
|
· |
Introduce
other isotope products to the U.S. market
.
IsoRay Medical plans to introduce its Yttrium-90 radioisotope
in 2006.
Currently, FDA approved
90
Y
manufactured by other suppliers is used in the treatment of non-Hodgkin's
lymphoma and is in clinical trials for other applications. Other
products
may be added in the future as they are developed. IsoRay Medical
has the
ability to make several different isotopes for multiple medical
and
industrial applications. During 2005 the Company has identified
and
prioritized additional market opportunities for these isotopes.
|
· |
Support
clinical research and sustained product development
.
The Company plans to structure
and
support clinical studies on the therapeutic benefits of Cs-131
for the
treatment of solid tumors and other patient benefits. We are
and will
continue to support clinical studies with several leading radiation
oncologists to clinically document patient outcomes, provide
support for
our product claims and compare the performance of our seeds to
competing
seeds. IsoRay Medical plans to sustain long-term growth by implementing
research and development programs with leading medical institutions
in the
U.S. to identify and develop other applications for IsoRay Medical's
core
radioisotope technology.
|
Cesium-131
|
Palladium-103
|
Iodine-125
|
|
Half
Life
|
9.7
Days
|
17.5
days
|
60
days
|
Energy
|
29
KeV
|
22
KeV
|
28
KeV
|
Dose
Delivery
|
90%
in 33 days
|
90%
in 58 days
|
90%
in 204 days
|
Total
Dose
|
100
Gy
|
125
Gy
|
145
Gy
|
Anisotropy
Factor
*
|
.969
|
.877
(TheraSeed® 2000)
|
.930
(OncoSeed® 6711)
|
Shape of radiation field . The shape of the radiation field generated by a 131 Cs seed is uniform, and this uniformity may result in better radiation dose coverage and improved therapeutic effectiveness. The adjacent picture is an autoradiograph (film exposed by radiation from the seed itself) of an IsoRay seed, which shows this uniformity of the radiation field that is expected to result in better radiation dose coverage. IsoRay Medical has conducted extensive computer modeling and testing of the seed design. The IsoRay seed has passed all Nuclear Regulatory Commission ("NRC") requirements for sealed radioactive sources. Dose uniformity was tested and the results compared well to those predicted by industry standard computer modeling techniques. In the third quarter of 2002, seeds were sent to the National Institute for Standards and Technology for calibration, and have undergone dosimetry testing according to American Association of Physicists in Medicine ("AAPM") protocols. The results of these tests were compiled in IsoRay Medical's 510(k) submission to the FDA and were subsequently published in the June 2004 issue of Medical Physics . The results of these tests showed superior dose characteristics relative to the leading I-125 and Pd-103 seeds. |
|
|
Figure
2. Cs-131 seed
Autoradiograph
|
·
|
Isotope
Generation
.
The
radioactive isotope Cs-131 is normally produced by placing a
quantity of
stable non-radioactive barium (ideally pure Ba-130) into the
neutron flux
of a nuclear reactor. The irradiation process converts a small
fraction of
this material into a radioactive form of barium (Ba-131). The
Ba-131
decays by electron capture to the radioactive isotope of interest
(Cs-131). IsoRay Medical has evaluated several international
nuclear
reactors and a few potential facilities in the United States.
Due to the
short half-life of both the Ba-131 and Cs-131 isotopes, these
facilities
must be capable of removing irradiated materials from the reactor
core on
a routine (e.g. weekly) basis. Reactor personnel will ship the
irradiated
barium on a pre-determined schedule to our facilities for subsequent
separation, purification and seed assembly. The Company has identified
more than five reactors in the U.S., Europe and the former Soviet
Union
that are capable of meeting these requirements. This routine
isotope
generation cycle at supplier reactors will allow significant
quantities of
Ba-131 to be on hand at our facilities for the completion of
the rest of
the manufacturing process. To ensure reliability of supply, we
intend to
seek agreements with multiple facilities to produce Ba-131. As
of the date
of this report, IsoRay Medical has agreements in place with more
than one
supplier of irradiated Ba-131. In addition, the Company is engaged
in the
development of a barium enrichment device that, if successful,
should
reduce the cost of producing Cs-131 while maintaining the purity
and
consistency required in the end product.
|
·
|
Isotope
Separation and Purification
.
Upon
irradiation of the barium feedstock, the Ba-131 begins decaying
to Cs-131.
At pre-determined intervals the Cs-131 produced is separated
from the
barium feedstock and purified using a proprietary radiochemical
separations process (patent applied for). Due to the high-energy
decay of
Ba-131, this process is performed under stringent radiological
controls in
a highly shielded isolator or "hot cell" using remote manipulators.
After
separating Cs-131 from the energetic Ba-131, subsequent seed
processing
may be performed in locally shielded fume hoods or glove boxes.
If
enriched barium feedstock is used, the residual barium remaining
after
subsequent Cs-131 separation cycles (“milkings”) will be recycled back to
the reactor facility for re-irradiation. This material will be
recycled as
many times as economically feasible, which should make the process
more
cost effective. As an alternative to performing the Cs-131 separation
in
our own facilities, IsoRay may enter into agreements with other
entities
to supply “raw” Cs-131 by performing the initial barium/cesium separation
at their facilities, followed by final purification at IsoRay’s facility.
|
·
|
Internal
Seed Core Technology
.
The
purified Cs-131 isotope will be incorporated into an internal
assembly
that contains a binder, spacer and X-ray marker. This internal
core
assembly is subsequently inserted into a titanium case. The dimensional
tolerance for each material is extremely important. Several carrier
materials and placement methods have been evaluated, and through
a process
of elimination, we have developed favored materials and methods
during our
laboratory testing. The equipment necessary to produce the internal
core
includes accurate cutting and gauging devices, isotope incorporation
vessels, reaction condition stabilization and monitoring systems,
and
tools for placing the core into the titanium tubing prior to
seed
welding
.
|
·
|
Seed
Welding.
Following
production of the internal core and placement into the titanium
capsule, a
seed is hermetically sealed to produce a sealed radioactive source
and
biocompatible medical device. This manufacturing technology requires:
accurate placement of seed components with respect to the welding
head,
accurate control of welding parameters to ensure uniform temperature
and
depth control of the weld, quality control assessment of the
weld
integrity, and removal of the finished product for downstream
processing
or rejection of unacceptable materials to waste. Inspection systems
will
be capable of identifying and classifying these variations for
quality
control ensuring a minimal amount of material is wasted. Finally,
the
rapid placement and removal of components from the welding zone
will
affect overall product throughput.
|
·
|
Quality
Control
.
We
have established procedures and controls to meet all FDA and
ISO 9001:2000
Quality Standards. Product quality and reliability will be secured
by
utilizing multiple sources of irradiation services, feedstock
material,
and other seed manufacturing components. An intensive production
line
preventive maintenance and spare parts program will be implemented.
Also,
an ongoing training program will be established for customer
service to
ensure that all regulatory requirements for the FDA, DOT and
applicable
nuclear radiation and health authorities are fulfilled.
|
·
|
Loose
seeds
|
·
|
Pre-loaded
needles
(loaded with 3 to 5 seeds and
spacers)
|
·
|
Strands
of seeds
(consists of seeds and spacers in a biocompatible "shrink wrap")
|
·
|
Pre-loaded
Mick cartridges
(fits the Mick applicator - seed manufacturers usually load and
sterilize
Mick cartridges in their own manufacturing
facilities)
|
·
|
our
achievement of product development objectives and milestones;
|
·
|
demand
and pricing for the Company's products;
|
·
|
effects
of aggressive competitors;
|
·
|
hospital,
clinic and physician buying decisions;
|
·
|
research
and development and manufacturing expenses;
|
·
|
patient
outcomes from our therapy;
|
·
|
physician
acceptance of our products;
|
·
|
government
or private healthcare reimbursement policies;
|
·
|
our
manufacturing performance and capacity;
|
·
|
incidents,
if any, that could cause temporary shutdown of our manufacturing
facilities;
|
·
|
the
amount and timing of sales orders;
|
·
|
rate
and success of future product approvals;
|
·
|
timing
of FDA approval, if any, of competitive products and the rate
of market
penetration of competing products;
|
·
|
seasonality
of purchasing behavior in our market;
|
·
|
overall
economic conditions; and
|
·
|
the
successful introduction or market penetration of alternative
therapies.
|
·
|
fines,
injunctions and civil penalties;
|
·
|
the
recall or seizure of our products;
|
·
|
the
imposition of operating restrictions, partial suspension or total
shutdown
of production;
|
·
|
the
refusal of our requests for 510(k) clearance or premarket approval
of new
products;
|
·
|
the
withdrawal of 510(k) clearance or premarket approvals already
granted; and
|
·
|
criminal
prosecution.
|
Plan
Category
|
Number
of securities to be issued on exercise of outstanding options,
warrants
and rights
#
|
Weighted-average
exercise price of outstanding options, warrants, and rights
$
|
Number
of securities remaining available for future issuance under equity
compensation plans
|
|||||||
Equity
compensation plans
approved
by shareholders
|
N/A
|
N/A
|
N/A
|
|||||||
Equity
compensation plans
not
approved by shareholders
|
N/A
|
N/A
|
3,000,000
|
|||||||
Total
|
N/A
|
N/A
|
3,000,000
|
Name
|
Age
|
Position
Held
|
|||||
Roger
Girard
|
62
|
Chairman,
President, CEO
|
|||||
John
Hrobsky
|
58
|
Vice
President-Marketing
|
|||||
Michael
Dunlop
|
53
|
Chief
Financial Officer-Treasurer
|
|||||
David
J. Swanberg
|
49
|
Vice
President-Operations
Corporate
Secretary, Director
|
|||||
Robert
Kauffman
|
64
|
Director
|
|||||
Thomas
LaVoy
|
45
|
Director
|
|||||
Stephen
Boatwright
|
41
|
Director
|
Name
|
Age
|
Position
Held and Tenure
|
|||||
Lane
Bray
|
77
|
Chemist
|
|||||
Garrett
Brown
|
42
|
Chief
Technology Officer
|
|||||
Keith
Welsch
|
58
|
Chief
Quality Officer
|
Long-Term
Compensation Awards
|
||||||||||||||||
Name
and Principal Position
|
Fiscal
Year
(1)
|
Annual
Compensation Salary
|
Restricted
Stock Awards
|
Securities
Underlying Options
|
All
Other Compensation
|
|||||||||||
Thomas
Scallen, Former Chief Executive Officer
(2)
|
2005
|
—
|
—
|
—
|
$
|
50,000
|
(3)
|
|||||||||
2004
|
—
|
$
|
7,871
|
(4)
|
—
|
—
|
||||||||||
2003
|
—
|
—
|
—
|
—
|
(1)
|
Fiscal
year 2005 consisted of the period from October 1, 2004 through
June 30,
2005; fiscal year 2004 consisted of the year ended September
20, 3004; and
fiscal year 2003 consisted of the year ended September 30,
2003.
|
(2)
|
Mr.
Scallen served as our Chief Executive Officer during the listed
fiscal
years and until his resignation effective July 28,
2005.
|
(3)
|
Represents
a $50,000 cash payment in June 2005 to Mr. Scallen in settlement
of all
accrued but unpaid compensation.
|
(4)
|
Represents
the issuance of 787,100 shares of restricted common stock as
compensation
associated with the conversion of the outstanding notes payable
and
accrued interest payable. This transaction was valued at approximately
$7,781, which was equal to the "fair value" of the Company's
common stock
on the conversion date. The Company relied upon Section 4(2)
of the
Securities Act of 1933, as amended, for an exemption from registration
for
this issuance.
|
Name
and Address of Beneficial Owner
(1)
|
Amount
of Common Shares Owned
|
Derivative
Securities Exercisable or Convertible Within 60 Days of September
26,
2005
|
Total
Common Shares Beneficially Owned
|
Percent
of Common Shares Owned
(2)
|
|||||||||
Roger
Girard
Chief
Executive Officer, President and Chairman
|
338,462
|
513,841
|
852,303
|
9.01
|
%
|
||||||||
Michael
Dunlop
Chief
Financial Officer
|
136,619
|
150,000
|
286,619
|
3.15
|
%
|
||||||||
John
Hrobsky
Vice
President
|
4,296
|
281,349
|
285,645
|
3.09
|
%
|
||||||||
David
Swanberg
Vice
President and Director
|
284,609
|
150,000
|
434,609
|
4.78
|
%
|
||||||||
Robert
Kauffman
Director
|
43,802
|
100,000
|
143,802
|
1.59
|
%
|
||||||||
Thomas
LaVoy
Director
|
8,423
|
100,000
|
108,423
|
1.20
|
%
|
||||||||
Stephen
Boatwright
Director
|
—
|
184,236
|
184,236
|
2.01
|
%
|
||||||||
Thomas
K. Scallen
Former
Chief Executive Officer
(3)
|
329,942
|
—
|
329,942
|
3.69
|
%
|
||||||||
Lawrence
Family Trust
(4)
|
888,529
|
—
|
888,529
|
9.95
|
%
|
||||||||
Donald
Segna
|
511,214
|
—
|
511,214
|
5.72
|
%
|
||||||||
Anthony
Silverman
(5)
|
594,771
|
139,391
|
734,162
|
8.08
|
%
|
||||||||
All
Officers and Directors as a group (7 persons)
|
816,213
|
1,478,726
|
2,294,939
|
22.01
|
%
|
(1)
|
Except
as otherwise noted, the address for each of these individuals
is c/o
IsoRay, Inc., 350 Hills St., Suite 106, Richland, Washington
99354.
|
(2)
|
Percentage
ownership is based on 8,947,972 shares of Common Stock outstanding
on
September 26, 2005. Shares of Common Stock subject to stock options,
warrants or convertible debentures which are currently
exercisable/convertible or will become exercisable/convertible
within 60
days after September 26, 2005 are deemed outstanding for computing
the
percentage ownership of the person or group holding such options,
but are
not deemed outstanding for computing the percentage ownership
of any other
person or group.
|
(3)
|
Mr.
Scallen's address is 4701 IDS Center, Minneapolis, MN
55402.
|
(4)
|
The
address of the Lawrence Family Trust is 285 Dondero Way, San
Jose,
California 95119.
|
(5)
|
Mr.
Silverman's address is 2747 Paradise Road, #903, Las Vegas, Nevada
98109.
27,376 of the shares of common stock and 24,067 of the derivative
securities beneficially owned by Mr. Silverman are held of record
by
Katsinam Partners, LP, an entity of which Mr. Silverman is a
member of the
general partner.
|
Name
and Address of Beneficial Owner
(1)
|
Amount
of Preferred Shares Owned
|
Options
or Warrants Exercisable Within 60 Days of September 26,
2005
|
Total
Preferred Shares Beneficially Owned
|
Percent
of Preferred Shares Owned
(2)
|
|||||||||
Lebowitz
Living Trust
(3)
|
142,819
|
—
|
142,819
|
10.90
|
%
|
||||||||
David
Swanberg
Vice
President and Director
|
14,218
|
—
|
14,218
|
1.09
|
%
|
||||||||
All
Officers and Directors as a group (7 persons)
(4)
|
14,218
|
—
|
14,218
|
1.09
|
%
|
(1)
|
Except
as otherwise noted, the address for each of these individuals
is c/o
IsoRay, Inc., 350 Hills St., Suite 106, Richland, Washington
99354.
|
(2)
|
Percentage
ownership is based on 1,304,988 shares of Preferred Stock outstanding
on
September 26, 2005. Shares of Preferred Stock subject to stock
options or
warrants which are currently exercisable or will become exercisable
within
60 days after September 26, 2005 are deemed outstanding for computing
the
percentage ownership of the person or group holding such options,
but are
not deemed outstanding for computing the percentage ownership
of any other
person or group.
|
(3)
|
The
address of the Lebowitz Living Trust is 16123 Greenwood Road,
Monte
Sereno, California 95030.
|
(4)
|
No
officers or directors other than Mr. Swanberg beneficially own
shares of
Preferred Stock.
|
Exhibits
|
||
2.1
|
Merger
Agreement dated as of May 27, 2005, by and among Century Park
Pictures
Corporation, Century Park Transitory Subsidiary, Inc., certain
shareholders and IsoRay Medical, Inc. incorporated by reference
to the
Form 8-K filed on August 3, 2005.
|
|
2.2
|
Certificate
of Merger, filed with the Delaware Secretary of State on July
28, 2005
incorporated by reference to the Form 8-K filed on August 3,
2005.
|
|
3.1
|
Articles
of Incorporation and By-Laws are incorporated by reference to
the Exhibits
to the Registrant's Registration Statement of September 15,
1983
|
|
3.2
|
Certificate
of Designation of Rights, Preferences and Privileges of Series
A and B
Convertible Preferred Stock, filed with the Minnesota Secretary
of State
on June 29, 2005 incorporated by reference to the Form 8-K filed
on August
3, 2005.
|
|
3.3
|
Restated
and Amended Articles of Incorporation, filed herewith.
|
|
4.1
|
Rights
of warrant holders set forth in Exhibits to Registration No.
33-58546,
effective April 12, 1993, incorporated by this
reference.
|
|
4.2
|
Form
of Lock-Up Agreement for Certain IsoRay Medical, Inc. Shareholders
incorporated by reference to the Form 8-K filed on August 3,
2005.
|
|
4.3
|
Form
of Lock-Up Agreement for Anthony Silverman incorporated by reference
to
the Form 8-K filed on August 3, 2005.
|
|
4.4
|
Form
of Registration Rights Agreement among IsoRay Medical, Inc.,
Century Park
Pictures Corporation and the other signatories thereto incorporated
by
reference to the Form 8-K filed on August 3, 2005.
|
|
4.5
|
Form
of Escrow Agreement among Century Park Pictures Corporation,
IsoRay
Medical, Inc. and Anthony Silverman incorporated by reference
to the Form
8-K filed on August 3, 2005.
|
|
4.6
|
Form
of Escrow Agreement among Century Park Pictures Corporation,
IsoRay
Medical, Inc. and Thomas Scallen incorporated by reference to
the Form 8-K
filed on August 3, 2005.
|
|
4.7
|
Amended
and Restated 2005 Stock Option Plan incorporated by reference
to the Form
S-8 filed on August 19, 2005.
|
|
4.8
|
Amended
and Restated 2005 Employee Stock Option Plan incorporated by
reference to
the Form S-8 filed on August 19, 2005.
|
|
10
|
Stock
Purchase Agreement, dated July 29, 1993 between registrant and
International Broadcasting Corporation, International Theatres
Corporation
and National Westminster Bank USA attached as an Exhibit to Registrant’s
Report on Form 8-K is incorporated by this reference.
|
|
14.1
|
Code
of Conduct and Ethics, filed
herewith.
|
14.2
|
Code
of Ethics for Chief Executive Officer and Senior Financial Officers,
filed
herewith.
|
21.1
|
Subsidiaries
of the Registrant, filed herewith.
|
31.1
|
Certification
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Chief
Executive Officer, filed herewith.
|
31.2
|
Certification
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Chief
Financial Officer, filed herewith.
|
32.1
|
Certifications
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.
|
Nine
months ended
June
30, 2005
|
Year
ended
September
30, 2004
|
Year
ended
September
30, 2003
|
||||||||
1.
Audit
fees
|
$
|
4,663
|
$
|
5,512
|
$
|
8,094
|
||||
2.
Audit-related
fees
|
—
|
—
|
—
|
|||||||
3.
Tax
fees
|
—
|
—
|
—
|
|||||||
4.
All
other fees
|
—
|
—
|
—
|
|||||||
Totals
|
$
|
4,663
|
$
|
5,512
|
$
|
8,094
|
Report
of Registered Independent Certified Public Accounting
Firm
|
F-2
|
Financial
Statements
|
|
Balance
Sheets as of June 30, 2005, September 30, 2004 and 2003
|
F-4
|
|
|
Statements
of Operations and Comprehensive Income (Loss) for the nine
months ended
June 30, 2005 and for the years ended September 30, 2004 and
2003
|
F-5
|
|
|
Statement
of Changes in Shareholders' Equity for the nine months ended
June 30, 2005
and for the years ended September 30, 2004 and 2003
|
F-6
|
|
|
Statements
of Cash Flows for the nine months ended June 30, 2005
and for the
years ended September 30, 2004 and 2003
|
F-7
|
|
|
Notes
to Financial Statements
|
F-8
|
|
June
30,
2005
|
September
30,
2004
|
September
30,
2003
|
|||||||
Assets
|
||||||||||
Current
Assets
|
||||||||||
Cash
on hand and in bank
|
$
|
32,587
|
$
|
—
|
$
|
—
|
||||
Total
current assets
|
$
|
32,587
|
—
|
—
|
||||||
Other
Assets
|
—
|
926
|
926
|
|||||||
Rent
deposits
|
||||||||||
Total
Assets
|
$
|
32,587
|
926
|
926
|
Current
Liabilities
|
||||||||||
Notes
payable
|
$
|
—
|
$
|
—
|
$
|
100,000
|
||||
Accounts
payable - trade
|
21,355
|
395
|
—
|
|||||||
Accrued
officer compensation
|
—
|
354,500
|
354,500
|
|||||||
Accrued
interest payable
|
—
|
—
|
73,714
|
|||||||
Other
accrued expenses
|
—
|
—
|
9,027
|
|||||||
Advances
from shareholder
|
—
|
37,744
|
27,887
|
|||||||
Total
current liabilities
|
21,355
|
392,639
|
565,128
|
|||||||
Shareholders’
Equity (Deficit)
|
||||||||||
Preferred
stock — $0.001 par value
|
||||||||||
6,000,000
shares authorized
|
||||||||||
1,000,000
shares allocated to Series A
|
—
|
—
|
—
|
|||||||
5,000,000
shares allocated to Series B
|
—
|
—
|
—
|
|||||||
Common
stock — $0.001 par value.
|
||||||||||
194,000,000
shares authorized.
|
||||||||||
2,498,319,
2,414,985 and 2,099,554 shares
issued
and outstanding, respectively
|
2,498
|
2,415
|
2,099
|
|||||||
Additional
paid-in capital
|
7,003,100
|
6,874,610
|
6,778,194
|
|||||||
Accumulated
deficit
|
(
6,994,366
|
)
|
(
7,268,738
|
)
|
(
7,344,495
|
)
|
||||
Total
shareholders’ equity (deficit)
|
11,232
|
(391,713
|
)
|
(564,202
|
)
|
|||||
Total
Liabilities and
Shareholders’
Equity (Deficit)
|
$
|
32,587
|
$
|
926
|
$
|
926
|
|
Nine
months
ended
June
30,
2005
|
Year
ended
September
30,
2004
|
Year
ended
September
30,
2003
|
|||||||
Revenues
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
Expenses
|
||||||||||
General
and administrative expenses
|
30,128
|
9,095
|
19,022
|
|||||||
Officer
compensation
|
(
304,500
|
)
|
—
|
—
|
||||||
Total
expenses
|
(
274,372
|
)
|
—
|
—
|
||||||
Income
(Loss) from operations
|
274,372
|
(9,095
|
)
|
(19,022
|
)
|
|||||
Other
Expense
|
||||||||||
Interest
expense
|
—
|
(2,104
|
)
|
(
41,005
|
)
|
|||||
Income
(Loss) before provision
for
income taxes and extraordinary item
|
274,372
|
(11,199
|
)
|
(60,027
|
)
|
|||||
Provision
for income taxes
|
—
|
—
|
—
|
|||||||
Income
(Loss) before extraordinary item
|
274,372
|
(11,199
|
)
|
(60,027
|
)
|
|||||
Extraordinary
item
|
||||||||||
Extinguishment
of notes payable
and
accrued interest, net of income taxes
|
—
|
86,956
|
—
|
|||||||
Net
Income (Loss)
|
274,372
|
75,757
|
(60,027
|
)
|
||||||
Other
Comprehensive Income
|
—
|
—
|
—
|
|||||||
Comprehensive
Income (Loss)
|
—
|
—
|
—
|
|||||||
Income
(Loss) per weighted-average
share
of common stock outstanding,
computed
on Net Loss — basic and fully diluted
|
||||||||||
From
continuing operations
|
$
|
(0.11
|
)
|
$
|
(0.01
|
)
|
$
|
(0.07
|
)
|
|
From
extraordinary item
|
0.00
|
0.04
|
0.00
|
|||||||
$
|
(
0.11
|
)
|
$
|
(
0.03
|
)
|
$
|
(
0.07
|
)
|
||
Weighted-average
number of shares
of
common stock outstanding
|
2,429,027
|
2,360,690
|
804,619
|
Common
Stock
|
|
|
||||||||||||||
|
Shares
|
Amount
|
Additional
paid
in capital
|
Accumulated
deficit
|
Total
|
|||||||||||
Balances
at October 1, 2002
|
9,886,641
|
$
|
9,887
|
$
|
6,191,566
|
$
|
(7,284,468
|
)
|
$
|
(1,083,015
|
)
|
|||||
Effect
of April 29, 2005
1-for-30
reverse stock split
|
(
9,557,317
|
)
|
(
9,558
|
)
|
9,558
|
—
|
—
|
|||||||||
Balances
at
October
1, 2002, as reset
|
329,324
|
329
|
6,201,124
|
(7,284,468
|
)
|
(1,083,015
|
)
|
|||||||||
Conversion
of notes payable
and
accrued interest payable
to
common stock
|
1,770,230
|
1,770
|
529,299
|
—
|
531,069
|
|||||||||||
Forgiveness
of accrued interest
|
—
|
—
|
6,766
|
—
|
6,766
|
|||||||||||
Contribution
of imputed interest
on
suspended interest on
notes
payable
|
—
|
—
|
41,005
|
—
|
41,005
|
|||||||||||
Net
loss for the year
|
—
|
—
|
—
|
(60,027
|
)
|
(60,027
|
)
|
|||||||||
Balances
at
September
30, 2003
|
2,099,554
|
2,099
|
6,778,194
|
(7,344,495
|
)
|
(564,202
|
)
|
|||||||||
Conversion
of notes payable
and
accrued interest payable
to
common stock
|
289,194
|
290
|
86,468
|
—
|
86,758
|
|||||||||||
Contribution
of imputed interest on
suspended
interest on notes payable
|
—
|
—
|
2,104
|
—
|
2,104
|
|||||||||||
Common
stock issued for
debt
conversion services
|
26,237
|
26
|
7,844
|
—
|
7,870
|
|||||||||||
Net
income for the year
|
—
|
—
|
—
|
75,757
|
75,757
|
|||||||||||
Balances
at
September
30, 2004
|
2,414,985
|
2,415
|
6,874,610
|
(7,268,738
|
)
|
(391,713
|
)
|
|||||||||
Sale
of common stock
for
cash
|
83,334
|
83
|
84,917
|
—
|
85,000
|
|||||||||||
Contributed
capital
|
—
|
43,573
|
—
|
43,573
|
||||||||||||
Net
income for the nine months
|
—
|
—
|
—
|
274,372
|
274,372
|
|||||||||||
Balances
at
June
30, 2005
|
2,498,319
|
$
|
2,498
|
$
|
7,003,100
|
$
|
(
6,994,366
|
)
|
$
|
11,232
|
Nine
months ended June 30, 2005 |
Year
ended
September
30,
2004
|
Year
ended
September 30, 2003 |
||||||||
Cash
Flows from Operating Activities
|
||||||||||
Net
Income (Loss)
|
$
|
274,372
|
$
|
75,757
|
$
|
(60,027
|
)
|
|||
Adjustments
to reconcile net income to net cash
provided
by operating activities
|
||||||||||
Extinguishment
of notes payable and accrued interest
|
—
|
(86,956
|
)
|
—
|
||||||
Consulting
fees paid with common stock
|
—
|
7,870
|
—
|
|||||||
Contribution
of interest expense related to
suspended
interest payable on notes payable
|
—
|
2,104
|
41,005
|
|||||||
Increase
(Decrease) in
Accounts
payable and other accrued expenses
|
(
333,540
|
)
|
(8,632
|
)
|
—
|
|||||
Net
cash used in operating activities
|
(59,168
|
)
|
(9,857
|
)
|
(
19,022
|
)
|
||||
Cash
Flows from Investing Activities
|
—
|
—
|
—
|
|||||||
Cash
Flows from Financing Activities
|
||||||||||
Proceeds
from sale of common stock
|
85,000
|
—
|
—
|
|||||||
Funds
advanced by officer/shareholder
|
6,735
|
9,857
|
19,022
|
|||||||
Net
cash provided by financing activities
|
91,755
|
9,857
|
19,022
|
|||||||
Increase
(Decrease) in Cash and Cash Equivalents
|
32,587
|
—
|
—
|
|||||||
Cash
and cash equivalents at beginning of period
|
—
|
—
|
—
|
|||||||
Cash
and cash equivalents at end of period
|
$
|
32,587
|
$
|
—
|
$
|
—
|
||||
Supplemental
Disclosures of Interest and Income Taxes Paid
|
||||||||||
Interest
paid during the period
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
Income
taxes paid (refunded)
|
$
|
—
|
$
|
—
|
$
|
—
|
|
Nine
months
ended
June 30, 2005 |
Year
ended
September
30,
2004
|
Year
ended
September 30 , 2003 |
|||||||
Federal:
|
||||||||||
Current
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
Deferred
|
—
|
—
|
—
|
|||||||
|
—
|
—
|
||||||||
State:
|
||||||||||
Current
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
Deferred
|
—
|
—
|
—
|
|||||||
|
—
|
—
|
||||||||
Total
|
$
|
—
|
$
|
—
|
$
|
—
|
|
Nine
months
ended
June 30, 2005 |
Year
ended
September
30,
2004
|
Year
ended
September 30, 2003 |
|||||||
Statutory
rate applied to earnings (loss) before income taxes
|
$
|
93,300
|
$
|
25,750
|
$
|
(20,400
|
)
|
|||
Increase
(decrease) in income taxes resulting from:
|
||||||||||
State
income taxes
|
—
|
—
|
—
|
|||||||
Other,
including reserve for deferred tax asset
|
(
93,300
|
)
|
(
25,750
|
)
|
20,400
|
|||||
Income
tax expense
|
$
|
—
|
$
|
—
|
$
|
—
|
|
Nine
months ended June 30, 2005
|
|||||||||
|
Federal
|
State
|
Total
|
|||||||
Deferred
tax assets:
|
||||||||||
Other
(current)
|
$
|
96,000
|
$
|
35,000
|
$
|
131,000
|
||||
Net
operating loss carryforwards (non-current)
|
932,000
|
77,000
|
1,009,000
|
|||||||
1,028,000
|
112,000
|
1,140,000
|
||||||||
Valuation
allowance
|
(
1,028,000
|
)
|
(
112,000
|
)
|
(
1,140,000
|
)
|
||||
Net
Deferred tax asset
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
Deferred
tax liabilities
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
|
Year
ended September 30,
2004
|
|||||||||
|
Federal
|
State
|
Total
|
|||||||
Deferred
tax assets:
|
||||||||||
Other
(current)
|
$
|
96,000
|
$
|
35,000
|
$
|
131,000
|
||||
Net
operating loss carryforwards (non-current)
|
932,000
|
77,000
|
1,009,000
|
|||||||
1,028,000
|
112,000
|
1,140,000
|
||||||||
Valuation
allowance
|
(
1,028,000
|
)
|
(
112,000
|
)
|
(
1,140,000
|
)
|
||||
Net
Deferred tax asset
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
Deferred
tax liabilities
|
$
|
—
|
$
|
—
|
$
|
—
|
Year
ended September 30, 2003
|
||||||||||
|
Federal
|
State
|
Total
|
|||||||
Deferred
tax assets:
|
||||||||||
Other
(current)
|
$
|
96,000
|
$
|
35,000
|
$
|
131,000
|
||||
Net
operating loss carryforwards (non-current)
|
932,000
|
77,000
|
1,009,000
|
|||||||
1,028,000
|
112,000
|
1,140,000
|
||||||||
Valuation
allowance
|
(
1,028,000
|
)
|
(
112,000
|
)
|
(
1,140,000
|
)
|
||||
Net
Deferred tax asset
|
$
|
—
|
$ |
$
|
|
|||||
Deferred
tax liabilities
|
$ |
$
|
|
$
|
Dated:
October
10, 2005
|
/s/
Roger E. Girard
|
Roger
E. Girard
|
|
Chief
Executive Officer
|
|
Dated:
October
10, 2005
|
/s/
Michael Dunlop
|
Michael
Dunlop
|
|
Chief
Financial Officer
|
|
Dated:
October
10, 2005
|
/s/
Roger E. Girard
|
Roger
E. Girard
|
|
Chief
Executive Officer
|
|
Dated:
October
10, 2005
|
/s/
Michael Dunlop
|
Michael
Dunlop
|
|
Chief
Financial Officer and Treasurer
|
|
Dated:
October
10, 2005
|
/s/
David J. Swanberg
|
David
J. Swanberg
|
|
Vice
President-Operations,
|
|
Corporate
Secretary and Director
|
|
Dated:
October
10, 2005
|
/s/
Robert Kauffman
|
Robert
Kauffman
|
|
Director
|
|
Dated:
October
10, 2005
|
/s/
Thomas LaVoy
|
Thomas
LaVoy
|
|
Director
|
|
Dated:
October
10, 2005
|
/s/
Stephen Boatwright
|
Stephen
Boatwright
|
|
Director
|
Name
|
Address
|
|
William
C. Pribble, Jr.
|
1421 Wayzata Boulevard, Suite 111 | |
Wayzata,
Minnesota 55391
|
1. |
Scope
of Code
|
1)
|
honest
and ethical conduct, including the ethical handling of actual or
apparent
conflicts of interest between personal and professional relationships;
|
2)
|
full,
fair, accurate, timely, and understandable disclosure in reports
and
documents the Company files with, or submits to, the Securities and
Exchange Commission (the “SEC”) and other regulatory bodies and in other
communications made by the Company;
|
3)
|
compliance
with applicable governmental laws, rules, and
regulations;
|
4)
|
the
prompt internal reporting of violations of this Code to the appropriate
person or persons identified in this Code;
|
5)
|
accountability
for adherence to this Code; and
|
6)
|
adherence
to a high standard of business
ethics.
|
2.
|
Compliance
with Laws, Rules, and
Regulations
|
3.
|
Conflicts
of Interest
|
1)
|
any
significant ownership interest in any supplier or
customer;
|
2)
|
any
consulting or employment relationship with any customer, supplier,
or
competitor;
|
3)
|
any
outside business activity that detracts from an individual’s ability to
devote appropriate time and attention to his or her responsibilities
to
the Company;
|
4)
|
the
receipt of non-nominal gifts or excessive entertainment from any
organization with which the Company has current or prospective business
dealings;
|
5)
|
being
in the position of supervising, reviewing, or having any influence
on the
job evaluation, pay, or benefit of any family member; and
|
6)
|
selling
anything to the Company or buying anything from the Company, except
on the
same terms and conditions as comparable directors, officers, or employees
are permitted to so purchase or
sell.
|
4. |
Insider
Trading
|
5. |
Corporate
Opportunities
|
6. |
Competition
and Fair Dealing
|
7. |
Discrimination
and Harassment
|
8. |
Health
and Safety
|
9. |
Record-Keeping
|
10. |
Confidentiality
|
11. |
Protection
and Proper Use of Company
Assets
|
12. |
Payments
to Government
Personnel
|
13. |
Corporate
Disclosures
|
1)
|
Any
material information to which such individual may become aware that
affects the disclosures made by the Company in its public filings
or would
otherwise assist the Chief Executive Officer, the Chief Financial
Officer,
the Disclosure Committee, and the Audit Committee in fulfilling their
responsibilities with respect to such public filings.
|
2)
|
Any
information the individual may have concerning (a) significant
deficiencies in the design or operation of internal controls that
could
adversely affect the Company's ability to record, process, summarize,
and
report financial data or (b) any fraud, whether or not material,
that
involves management or other employees who have a significant role
in the
Company's financial reporting, disclosures, or internal controls.
|
3)
|
Any
information the individual may have concerning any violation of this
Code,
including any actual or apparent conflicts of interest between personal
and professional relationships, involving any management or other
employees who have a significant role in the Company's financial
reporting, disclosures, or internal
controls.
|
4)
|
Any
information the individual may have concerning evidence of a material
violation of the securities or other laws, rules, or regulations
applicable to the Company and the operation of its business, by the
Company or any agent thereof, or of violation of this
Code.
|
14. |
Waivers
of the Code of Conduct
|
15. |
Publicly
Available
|
16. |
Reporting
any Illegal or Unethical
Behavior
|
17. |
Enforcement
|
1) |
Will
my actions be ethical in every respect and fully comply with the
law and
with IsoRay policies?
|
2) |
Will
my actions have the appearance of impropriety?
|
3) |
Will
my actions be questioned by my supervisors, associates, clients,
family
and the general public?
|
4) |
Am
I trying to fool anyone, including myself, as to the propriety of
my
actions?
|
1.
|
The
Chief Executive Officer and all senior financial officers are responsible
for full, fair, accurate, timely, and understandable disclosure
in the
periodic reports required to be filed by the Company with the SEC.
Accordingly, it is the responsibility of the Chief Executive Officer
and
each senior financial officer promptly to bring to the attention
of the
Disclosure Committee, if applicable, and to the Audit Committee
any
material information of which he or she may become aware that affects
the
disclosures made by the Company in its public filings or otherwise
would
assist the Disclosure Committee, if applicable, and the Audit Committee
in
fulfilling their responsibilities.
|
2.
|
The
Chief Executive Officer and each senior financial officer shall
promptly
bring to the attention of the Disclosure Committee, if applicable,
and the
Audit Committee any information he or she may have concerning (a)
significant deficiencies in the design or operation of internal
controls
that could adversely affect the Company's ability to record, process,
summarize, and report financial data or (b) any fraud, whether
or not
material, that involves management or other employees who have
a
significant role in the Company's financial reporting, disclosures,
or
internal controls.
|
3.
|
The
Chief Executive Officer and each senior financial officer shall
promptly
bring to the attention of the Audit Committee any information he
or she
may have concerning any violation of this Code or the Company's
Code of
Business Conduct and Ethics, including any actual or apparent conflicts
of
interest between personal and professional relationships, involving
any
management or other employees who have a significant role in the
Company's
financial reporting, disclosures, or internal
controls.
|
4.
|
The
Chief Executive Officer and each senior financial officer shall
promptly
bring to the attention of the Disclosure Committee, if applicable,
and the
Audit Committee any information he or she may have concerning evidence
of
a material violation of the securities or other laws, rules, or
regulations applicable to the Company and the operation of its
business,
by the Company or any agent thereof, or of violation of the Code
of
Business Conduct and Ethics or of these additional
procedures.
|
5.
|
The
Board of Directors shall determine, or designate appropriate persons
to
determine, appropriate actions to be taken in the event of violations
of
the Code of Business Conduct and Ethics or of these additional
procedures
by the Chief Executive Officer and the Company's senior financial
officers. Such actions shall be reasonably designed to deter wrongdoing
and to promote accountability for adherence to the Code of Business
Conduct and Ethics and to these additional procedures, and may
include
written notices to the individual involved that the Board has determined
that there has been a violation, censure by the Board, demotion
or
re-assignment of the individual involved, suspension with or without
pay
or benefits (as determined by the Board), and termination of the
individual's employment. In determining the appropriate action
in a
particular case, the Board of Directors or such designee shall
take into
account all relevant information, including the nature and severity
of the
violation, whether the violation was a single occurrence or repeated
occurrences, whether the violation appears to have been intentional
or
inadvertent, whether the individual in question had been advised
prior to
the violation as to the proper course of action, and whether or
not the
individual in question had committed other violations in the
past.
|
a) |
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 small business issuer,
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;
|
b) |
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;
|
c) |
Evaluated
the effectiveness of the small business issuer'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
|
d) |
Disclosed
in this report any change in the small business issuer's internal
control
over financial reporting that occurred during the small business
issuer's
most recent fiscal quarter (the small business issuer's fourth fiscal
quarter in the case of an annual report) that has materially affected,
or
is reasonably likely to materially affect, the small business issuer's
internal control over financial reporting; and
|
a)
|
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 small business issuer's
ability
to record, process, summarize and report financial information; and
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's
internal control over financial reporting.
|
|
|
|
Date: October 10, 2005 | By: | /s/ Roger E. Girard |
Roger E. Girard |
||
Chief Executive Officer |
a)
|
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 small business issuer,
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;
|
b)
|
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;
|
c)
|
Evaluated
the effectiveness of the small business issuer'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
|
d)
|
Disclosed
in this report any change in the small business issuer's internal
control
over financial reporting that occurred during the small business
issuer's
most recent fiscal quarter (the small business issuer's fourth fiscal
quarter in the case of an annual report) that has materially affected,
or
is reasonably likely to materially affect, the small business issuer's
internal control over financial reporting; and
|
a)
|
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 small business issuer's
ability
to record, process, summarize and report financial information; and
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's
internal control over financial reporting.
|
|
|
|
Date: October 10, 2005 | By: | /s/ Michael Dunlop |
Michael Dunlop |
||
Chief Financial Officer |
(1)
|
the
Report fully complies with the requirements of Section 13(a) or 15(d)
of
the Securities Exchange Act of 1934;
and
|
(2)
|
the
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
|
|
|
Date: October 10, 2005 | By: | /s/ Roger E. Girard |
Roger E. Girard |
||
Chief Executive Officer |
(1)
|
the
Report fully complies with the requirements of Section 13(a) or 15(d)
of
the Securities Exchange Act of 1934;
and
|
(2)
|
the
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
|
|
|
Date: October 10, 2005 | By: | /s/ Michael Dunlop |
Michael Dunlop |
||
Chief Financial Officer |