Minnesota
|
|
3841
|
|
41-1458152
|
(State
of Incorporation)
|
|
(Primary
Standard Industrial Classification Code Number)
|
|
(IRS
Employer ID No.)
|
Title
Of Each Class Of Securities To Be Registered
|
|
Amount
To Be Registered
(1)
|
Proposed
Maximum Offering Price Per Unit
|
|
Proposed
Maximum Aggregate Offering Price
|
|
Amount
Of Registration Fee
|
|
|
|
|
|
|
|
|
|
|
Common
stock, $0.001 par value, issuable upon conversion of preferred
stock
|
|
193,515
|
|
$5.38
(2)
|
|
$1,041,110
|
|
$122.54
|
Common
stock, $0.001 par value, issuable upon conversion of convertible
debentures
|
|
995,891
|
|
$5.38
(2)
|
|
$5,357,894
|
|
$630.62
|
Common
stock, $0.001 par value, issuable upon exercise of
warrants
|
332,130
|
$5.38
(2)
|
|
$1,786,859
|
|
$210.31
|
||
Common
stock, $0.001 par value, issuable upon exercise of stock
options
|
218,457
|
$5.38
(2)
|
|
$1,175,299
|
|
$138.33
|
||
Common
stock, $0.001 par value
|
|
3,701,028
|
|
$5.38
(2)
|
|
$19,911,531
|
|
$2,343.59
|
|
|
|
|
|
|
|
|
|
Total
|
|
5,441,022
|
|
|
|
$29,272,693
|
|
$3,445.39
|
(1) |
Includes
shares of our common stock, par value $0.001 per share, which may
be
offered pursuant to this registration statement, a portion of which
shares
are issuable upon conversion of preferred stock and convertible
debentures
and exercise of warrants and stock options held by the selling
shareholders. In addition to the shares set forth in the table,
the amount
to be registered includes an indeterminate number of shares, including
those issuable upon conversion of the preferred stock and convertible
debentures and exercise of the warrants and stock options, as such
number
may be adjusted as a result of stock splits, stock dividends and
similar
transactions in accordance with Rule 416.
|
(2) |
Estimated
solely for the purpose of calculating the amount of the registration
fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended,
based upon the average of the bid and asked prices of the Registrant’s
common stock on November 7, 2005.
|
PROSPECTUS
SUMMARY
|
1
|
|
|
RISK
FACTORS
|
5
|
|
|
USE
OF PROCEEDS
|
13
|
|
|
MANAGEMENT'S
PLAN OF OPERATIONS
|
13
|
|
|
MARKET
FOR COMMON STOCK
|
14
|
|
|
DESCRIPTION
OF BUSINESS
|
16
|
|
|
DESCRIPTION
OF PROPERTY
|
37
|
|
|
LEGAL
PROCEEDINGS
|
37
|
|
|
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
|
37
|
|
|
INDEMNIFICATION
OF DIRECTORS AND OFFICERS
|
41
|
|
|
SECURITIES
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
41
|
|
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
|
43
|
|
|
SELLING
SHAREHOLDERS
|
44
|
|
|
PLAN
OF DISTRIBUTION
|
49
|
|
|
DESCRIPTION
OF SECURITIES
|
50
|
|
|
LEGAL
MATTERS
|
51
|
|
|
EXPERTS
|
51
|
|
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
|
51
|
|
|
FURTHER
INFORMATION
|
51
|
|
|
AUDITED
FINANCIAL STATEMENTS
|
F-1
|
Common
Stock Offered
|
|
5,441,022
shares by selling shareholders
|
Offering
Price
|
Market
price or negotiated price
|
|
Common
Stock Outstanding Before the Offering
|
9,767,026
shares as of November 7, 2005
|
|
Use
of Proceeds
|
|
We
will not receive any proceeds from the resale of the shares offered
hereby, all of which proceeds will be paid to the selling
shareholders.
|
Risk
Factors
|
|
The
purchase of our common stock involves a high degree of risk. You
should
carefully review and consider the “RISK FACTORS” section beginning on page
5.
|
OTC
Bulletin Board Symbol
|
|
ISRY.OB
|
(1) |
Reflects
the issuance of 1,338,167 shares of IsoRay, Inc. $.001 par value
preferred
stock to the current holders of IsoRay Medical, Inc. Series B preferred
stock.
The
shares currently held by the IsoRay Medical, Inc. Series B preferred
shareholders will be cancelled upon issuance of the IsoRay, Inc.
preferred
shares.
|
(2) |
Reflects
the issuance of 200,000 shares of IsoRay Medical, Inc. common stock,
to an
individual as a finder's fee associated with the merger transaction,
and
subsequent
cancellation
of all 7,517,073 shares of IsoRay Medical, Inc. stock, and the
issuance of
6,332,097 shares of IsoRay, Inc. common stock. IsoRay Medical,
Inc.
will
be recapitalized with the issuance of 100,000 shares of IsoRay
Medical,
Inc. common stock to IsoRay, Inc.
|
(3) |
To
eliminate intercompany
balances.
|
Historical
|
Consolidated
|
||||||||||||
IsoRay,
Inc.
|
Pro
Forma
|
||||||||||||
Historical
|
(formerly
Century Park
|
Statement
of
|
|||||||||||
IsoRay
Medical, Inc.
|
Pictures
Corporation)
|
Operations
|
|||||||||||
for
the
|
for
the twelve months
|
for
the twelve months,
|
|||||||||||
year
ended
|
ended
|
Consolidation
|
and
fiscal year ended,
|
||||||||||
June
30, 2005
|
June
30, 2005 (1)
|
Adjustments
(2)
|
June
30, 2005
|
||||||||||
Product
sales
|
$
|
201,731
|
$
|
201,731
|
|||||||||
Cost
of product sales
|
1,474,251
|
1,474,251
|
|||||||||||
Gross
profit (loss)
|
(1,272,520
|
)
|
(1,272,520
|
)
|
|||||||||
Operating
Expenses:
|
-
|
||||||||||||
Research
and development
|
137,532
|
-
|
137,532
|
||||||||||
Sales
and Marketing expenses
|
701,822
|
-
|
701,822
|
||||||||||
General
and administrative expenses
|
1,871,325
|
34,297
|
1,905,622
|
||||||||||
Officer
compensation
|
(304,500
|
)
|
(304,500
|
)
|
|||||||||
Total
operating expenses
|
2,710,679
|
(270,203
|
)
|
-
|
2,440,476
|
||||||||
Operating
loss
|
3,983,199
|
(270,203
|
)
|
-
|
3,712,996
|
||||||||
Non-operating
income (expense):
|
|||||||||||||
Interest
income
|
2,464
|
-
|
2,464
|
||||||||||
Financing
expense
|
(167,493
|
)
|
(167,493
|
)
|
|||||||||
Loss
on disposal of fixed assets
|
(120,890
|
)
|
(120,890
|
)
|
|||||||||
Total
non-operating income
|
(285,919
|
)
|
-
|
-
|
(285,919
|
)
|
|||||||
Loss
before extraordinary item
|
(4,269,118
|
)
|
270,203
|
-
|
(3,998,915
|
)
|
|||||||
Extraordinary
credit
|
-
|
|
-
|
-
|
|||||||||
Net
income (loss)
|
$
|
(4,269,118
|
)
|
$
|
270,203
|
$
|
-
|
$
|
(3,998,915
|
)
|
|||
Income
(Loss) per weighted-average share of common stock
|
$
|
(0.66
|
)
|
$
|
0.11
|
$
|
(0.45
|
)
|
|||||
Weighted-average
number of shares of common stock outstanding
|
6,493,700
|
2,428,913
|
8,922,613
|
||||||||||
(1) |
Pursuant
to the merger of IsoRay Medical, Inc. and IsoRay, Inc. (formerly
known as
Century Park Pictures Corporation), the fiscal year end of
IsoRay, Inc.
was changed from September 30 to June 30. Accordingly, to
provide this
comparative information, twelve months of IsoRay, Inc.
operations
are presented even though those twelve months include quarterly
periods
which had formerly spanned two separate fiscal years.
|
(2) |
The
pro forma statements give rise to the effect that the merger
had occurred
at the beginning of the fiscal year ended June 30, and the
twelve
months
ended June 30.
|
Period
|
High
|
Low
|
||
October
1, 2003 - December 31, 2004
|
N/A
|
N/A
|
||
January
2, 2005 - March 31, 2005
|
*
|
*
|
||
April
1, 2005 - June 30, 2005
(1)
|
N/A
|
N/A
|
||
July
1, 2005 - September 30, 2005
|
$5.95
|
$1.00
|
*
|
Less
than $0.01.
|
(1)
|
Due
to our change of fiscal year end from September 30 to June 30,
our 2005
fiscal year was only nine months
long.
|
Plan
Category
|
Number
of securities to be issued upon exercise of outstanding options,
warrants
and rights (#)
|
Weighted-average
exercise price of outstanding options, warrants and rights
($)
|
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
|
2,607,113
|
$1.37
|
1,130,663
|
|||
Total
|
2,607,113
|
$1.37
|
1,130,663
|
· |
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 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 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%
|
Source:
Kaiser Brachytherapy Department, Roseville,
CA
|
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%
|
Source:
Kaiser Brachytherapy Department, Roseville,
CA
|
· |
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 custom preloading 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)
|
*
Degree
of symmetry of therapeutic dose, a factor of 1.00 indicates symmetry.
|
· |
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 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
prospectus, 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
are
capable of identifying and classifying these variations for quality
control ensuring less 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)
|
Name
|
Age
|
Position
with IsoRay Medical, Inc.
|
Lane
Bray
|
77
|
Chief
Chemist
|
Garrett
Brown
|
42
|
Chief
Technology Officer
|
Keith
Welsch
|
58
|
Chief
Quality Officer
|
|
Annual
Compensation
|
Long-Term
Compensation Awards
|
||||||||||||||
Name
and Principal Position
|
Fiscal
Year
(1)
|
Salary
|
Restricted
Stock Awards
|
Securities
Underlying Options
|
All
Other Compensation
|
|||||||||||
Roger
Girard, Chief Executive Officer
(2)
|
2005
|
$
|
113,958
|
--
|
--
|
--
|
||||||||||
2004
|
$
|
71,031
|
$
|
9,900
|
513,840
|
--
|
||||||||||
2003
|
$
|
4,000
|
$
|
49,900
|
--
|
--
|
||||||||||
Thomas
Scallen, Former Chief Executive Officer
(3)
|
2005
|
--
|
--
|
--
|
$
|
50,000
(4
|
)
|
|||||||||
2004
|
--
|
$
|
7,871
|
--
|
--
|
|||||||||||
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.
Girard did not begin serving as our CEO until July 28, 2005,
but he has
served as CEO of our subsidiary and its predecessor company since
August
2003. The compensation listed was paid to Mr. Girard by IsoRay
Medical or
its predecessor company.
|
(3) |
Mr.
Scallen served as our CEO during the listed fiscal years and
until his
resignation effective July 28, 2005.
|
(4) |
Represents
a $50,000 cash payment in June 2005 to Mr. Scallen in settlement
of all
accrued but unpaid compensation.
|
COMMON
STOCK SHARE OWNERSHIP AS OF NOVEMBER 6, 2005
|
|||||||||||||
Name
and Address of
Beneficial
Owner
(1)
|
Amount
of
Common
Shares
Owned
|
Derivative
S
ecurities
Exercisable
or Convertible
Within
60 Days
of
November 6
,
2005
|
Total
Common
Shares
Beneficially
Owned
|
Percent
of
Common
Shares
Owned
(2)
|
|||||||||
Roger
Girard, Chief Executive
Officer,
President and
Chairman
|
338,460
|
513,841
|
852,301
|
8.29
|
%
|
||||||||
Michael
Dunlop, Chief
Financial
Officer
|
136,618
|
150,000
|
286,618
|
2.89
|
%
|
||||||||
John
Hrobsky, Vice President
|
4,296
|
280,787
|
285,083
|
2.84
|
%
|
||||||||
David
Swanberg, Vice
President
and Director
|
297,109
|
150,000
|
447,109
|
4.51
|
%
|
||||||||
Robert
Kauffman, Director
|
43,801
|
100,000
|
143,801
|
1.46
|
%
|
||||||||
Thomas
LaVoy, Director
|
8,426
|
100,000
|
108,426
|
1.10
|
%
|
||||||||
Stephen
Boatwright, Director
|
0
|
184,236
|
184,236
|
1.85
|
%
|
||||||||
Thomas
Scallen, Former Chief
Executive
Officer
(3)
|
329,942
|
0
|
329,942
|
3.38
|
%
|
||||||||
Lawrence
Family Trust
(4)
|
888,529
|
0
|
888,529
|
9.10
|
%
|
||||||||
Donald
Segna
|
511,213
|
0
|
511,213
|
5.23
|
%
|
||||||||
Anthony
Silverman
(5)
|
462,199
|
144,404
|
606,603
|
6.12
|
%
|
||||||||
All
Officers and Directors
|
|||||||||||||
as
a group (7 persons)
|
826,710
|
1,479,426
|
2,308,136
|
20.52
|
%
|
(1) |
Except
as otherwise noted, the address for each of these individuals
is c/o
IsoRay, Inc., 350 Hills St., Suite 106, Richland, WA
99354.
|
(2) |
Percentage
ownership is based on 9,767,026 shares of Common Stock outstanding
on
November 6, 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 November 6, 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, CA
95119.
|
(5) |
Mr.
Silverman's address is 2747 Paradise Road, #903, Las Vegas,
NV 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
November
6, 2005
|
Total
Preferred
Shares
Beneficially
Owned
|
Percent
of
Preferred
Shares
Owned
(2)
|
|||||||||
Frederic
and Anita Daniels Family Trust
(3)
|
47,987
|
12,442
|
60,429
|
7.97
|
%
|
||||||||
Ronald
and Cathy Weinstein
And
The Ronald A Weinstein 2004 Living Trust
(4)
|
59,244
|
0
|
59,244
|
7.94
|
%
|
||||||||
Patrick
and Bonnie Kennedy
(5)
|
54,506
|
0
|
54,506
|
7.31
|
%
|
||||||||
Gold
Trust Co. FBO Don Goeckner IRA
(6)
|
51,187
|
0
|
51,187
|
6.86
|
%
|
||||||||
David
and Bonita Stiller
(7)
|
38,034
|
2,488
|
40,522
|
5.42
|
%
|
||||||||
David
Swanberg, Vice President and Director
(8)
|
14,218
|
0
|
14,218
|
1.91
|
%
|
||||||||
(1) |
Except
as otherwise noted, the address for each of these individuals
is c/o
IsoRay, Inc., 350 Hills St., Suite 106, Richland, WA
99354.
|
(2) |
Percentage
ownership is based on 745,762 shares of Preferred Stock outstanding
on
November 6, 2005. Shares of Preferred Stock subject to stock
options or
warrants which are currently exercisable or will become exercisable
within
60 days after November 6, 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 for the Frederic and Anita Daniels Family Trust is
16465 SE Mill
St., Portland, OR 97233.
|
(4) |
The
address for Ronald and Cathy Weinstein, and the Ronald A Weinstein
2004
Living Trust is 1901 Parkview Dr. NE, Tacoma, WA
98422.
|
(5) |
The
address for Patrick and Bonnie Kennedy is 4902 W. 12
th
,
Kennewick, WA 99336.
|
(6) |
The
address for Gold Trust Co FBO Don Goeckner IRA is 1769 NW Riverview
Dr.,
Roseburg, OR 97470.
|
(7) |
The
address for David and Bonita Stiller is 14123 SE Nicholas St.,
Boring, OR
97009.
|
(8) |
Other
than Mr. Swanberg, no other director or officer of the Company
beneficially owns shares of Preferred
Stock.
|
Name
|
Beneficial
Ownership Before the Offering
(1)
|
Percentage
of Common Stock Owned Before Offering
|
Shares
of Common Stock Included in Prospectus
(2)
|
Shares
of Common Stock Issuable Upon Conversion or Exercise of Preferred
Stock or
Derivative Securities and Included in Prospectus
(3)
|
Total
Shares of Common Stock Included in Prospectus
|
Beneficial
Ownership After the Offering
(4)
|
Percentage
of
Common
Stock
Owned
After
Offering
(4)
|
|||||||||||||||
Abelson,
Mark B. and Abelson, Janet W. 1991 Revocable Trust
|
24,067
|
*
|
0
|
24,067
|
24,067
|
0
|
*
|
|||||||||||||||
Agger
Capital Management, LLC
|
3,832
|
*
|
0
|
3,832
|
3,832
|
0
|
*
|
|||||||||||||||
Alan
E. and Anna E. Waltar Trust U/A DTD 7/3/98
|
41,982
|
*
|
7,480
|
0
|
7,480
|
34,502
|
*
|
|||||||||||||||
All
Seasons Painting Co.
|
21,327
|
*
|
4,265
|
0
|
4,265
|
17,062
|
*
|
|||||||||||||||
Anastassatos,
Efthimios
|
4,814
|
*
|
0
|
4,814
|
4,814
|
0
|
*
|
|||||||||||||||
Angioletti,
John K.
|
9,627
|
*
|
0
|
9,627
|
9,627
|
0
|
*
|
|||||||||||||||
Arcadia
Land and Development Company LLC
|
48,135
|
*
|
0
|
48,135
|
48,135
|
0
|
*
|
|||||||||||||||
Babcock,
Dwight W.
|
39,241
|
*
|
22,962
|
12,034
|
34,996
|
4,245
|
*
|
|||||||||||||||
Babcock,
Elaine
|
2,695
|
*
|
539
|
0
|
539
|
2,156
|
*
|
|||||||||||||||
Bales,
Matt
|
5,178
|
*
|
1,036
|
0
|
1,036
|
4,142
|
*
|
|||||||||||||||
Bartholomew,
Richard & Suzanne
|
17,772
|
*
|
3,554
|
0
|
3,554
|
14,218
|
*
|
|||||||||||||||
Bates,
Christopher
|
4,265
|
*
|
853
|
0
|
853
|
3,412
|
*
|
|||||||||||||||
Bates,
Robert and Lisa
|
37,873
|
*
|
16,335
|
0
|
16,335
|
21,538
|
*
|
|||||||||||||||
Bavispe
Limited Partnership
|
74,404
|
*
|
14,235
|
60,169
|
74,404
|
0
|
*
|
|||||||||||||||
Bear
Stearns Securities Corporation Custodian Michael Eric Jacobson
IRA
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Bear
Stearns Securities Corporation Custodian Mishawn Marie Nelson
IRA
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Bear
Stearns Securities Corporation Custodian Steven Mark Nelson
IRA
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Berglin,
Bruce and Doneda
|
5,475
|
*
|
5,475
|
0
|
5,475
|
0
|
*
|
|||||||||||||||
Berglund,
Greg
|
15,764
|
*
|
10,950
|
4,814
|
15,764
|
0
|
*
|
|||||||||||||||
Betty
McCormick Trust
|
7,108
|
*
|
1,422
|
0
|
1,422
|
5,686
|
*
|
|||||||||||||||
Bock,
Daniel
|
18,051
|
*
|
0
|
18,051
|
18,051
|
0
|
*
|
|||||||||||||||
Boggess,
Thomas S. IV and Jonette D.
|
36,101
|
*
|
0
|
36,101
|
36,101
|
0
|
*
|
|||||||||||||||
Boland,
John C.
|
28,437
|
*
|
0
|
5,687
|
5,687
|
22,750
|
*
|
|||||||||||||||
Boland,
John L.
|
116,098
|
1.21
|
%
|
10,384
|
7,109
|
17,493
|
98,605
|
*
|
||||||||||||||
Boster,
Gary
|
29,399
|
*
|
29,399
|
0
|
29,399
|
0
|
*
|
|||||||||||||||
Bragdon,
George and Barbara
|
2,105
|
*
|
421
|
0
|
421
|
1,684
|
*
|
|||||||||||||||
Brown
Larsen, Pamela
|
14,218
|
*
|
0
|
2,844
|
2,844
|
11,374
|
*
|
|||||||||||||||
Brown,
Alexis and Alan
|
4,211
|
*
|
842
|
0
|
842
|
3,369
|
*
|
|||||||||||||||
Brown,
Anne J.
|
14,218
|
*
|
0
|
2,844
|
2,844
|
11,374
|
*
|
|||||||||||||||
Brown,
Garrett N. (6)
|
480,637
|
4.87
|
%
|
31,546
(7)
|
)
|
0
|
31,546
|
449,091
|
3.19
|
%
|
||||||||||||
Bunting,
Brandt E. & Collen M.
|
28,435
|
*
|
1,422
|
4,265
|
5,687
|
22,748
|
*
|
|||||||||||||||
Burstein,
Fred
|
290,016
|
3.03
|
%
|
290,016
|
0
|
290,016
|
0
|
*
|
||||||||||||||
Burstein,
Fred IRA
|
16,425
|
*
|
16,425
|
0
|
16,425
|
0
|
*
|
|||||||||||||||
Cangiane,
Lorraine and Gilson, Bernard
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Carroll,
Bridget M.
|
14,218
|
*
|
14,218
|
0
|
14,218
|
0
|
*
|
|||||||||||||||
Chapman,
Milton A
|
48,782
|
*
|
9,756
|
0
|
9,756
|
39,026
|
*
|
|||||||||||||||
Chubb,
Gordon R.
|
2,407
|
*
|
0
|
2,407
|
2,407
|
0
|
*
|
|||||||||||||||
Chubb,
James L.
|
4,814
|
*
|
0
|
4,814
|
4,814
|
0
|
*
|
|||||||||||||||
Chubb,
Michael A
|
2,407
|
*
|
0
|
2,407
|
2,407
|
0
|
*
|
|||||||||||||||
Clara
E. Caylor, LLC
|
12,034
|
*
|
0
|
12,034
|
12,034
|
0
|
*
|
|||||||||||||||
Clark,
R. Jeanne
|
25,541
|
*
|
4,878
|
230
|
5,108
|
20,433
|
*
|
|||||||||||||||
Clement,
James H.
|
20,046
|
*
|
6,896
|
1,493
|
8,389
|
11,657
|
*
|
|||||||||||||||
Clerf,
Craig
|
1,300
|
*
|
260
|
0
|
260
|
1,040
|
*
|
|||||||||||||||
Clerf,
Robert
|
1,950
|
*
|
390
|
0
|
390
|
1,560
|
*
|
|||||||||||||||
Clerf,
Roger
|
3,251
|
*
|
650
|
0
|
650
|
2,601
|
*
|
|||||||||||||||
Cohen,
Loren
|
16,426
|
*
|
16,426
|
0
|
16,426
|
0
|
*
|
|||||||||||||||
Collier
Living Trust
|
44,885
|
*
|
7,545
|
0
|
7,545
|
37,340
|
*
|
|||||||||||||||
Cone-Gilreath
Law Firm
|
48,782
|
*
|
9,756
|
0
|
9,756
|
39,026
|
*
|
|||||||||||||||
Conner
III, Thomas E.
|
23,698
|
*
|
0
|
4,740
|
4,740
|
18,958
|
*
|
|||||||||||||||
Craddock,
Steven Lee
|
7,220
|
*
|
0
|
7,220
|
7,220
|
0
|
*
|
|||||||||||||||
Daniels,
Frederic R. & Anita C. Family Trust
|
72,462
|
*
|
0
|
24,119
|
24,119
|
48,343
|
*
|
|||||||||||||||
Daswick,
Gregory
|
10,663
|
*
|
2,133
|
0
|
2,133
|
8,530
|
*
|
|||||||||||||||
Daswick,
Michael and Kimberly
|
42,943
|
*
|
8,589
|
0
|
8,589
|
34,354
|
*
|
|||||||||||||||
DFC
401(k) Profit Sharing Plan FBO Benjamin L. Schwartz
|
24,883
|
*
|
2,488
|
2,488
|
4,976
|
19,906
|
*
|
|||||||||||||||
Douglas
D. Thornton Family Trust
|
308,957
|
3.23
|
%
|
61,791
|
0
|
61,791
|
247,166
|
1.75
|
%
|
|||||||||||||
Dunlop,
Michael
(5)
(6)
|
286,618
|
2.95
|
%
|
26,936
(7)
|
)
|
0
|
26,936
|
259,682
|
1.84
|
%
|
||||||||||||
Ecclestone,
Andrew
|
59,829
|
*
|
48,999
|
10,830
|
59,829
|
0
|
*
|
|||||||||||||||
Edmund,
Robert
|
3,369
|
*
|
674
|
0
|
674
|
2,695
|
*
|
|||||||||||||||
Engels,
Kevin F.
|
8,423
|
*
|
1,685
|
0
|
1,685
|
6,738
|
*
|
|||||||||||||||
Fabri,
Jon
|
8,423
|
*
|
1,685
|
0
|
1,685
|
6,738
|
*
|
|||||||||||||||
Falls
Rd LLC
|
23,698
|
*
|
0
|
4,740
|
4,740
|
18,958
|
*
|
|||||||||||||||
Feidelberg-Codini
Family Trust U/T/A dated April 15, 2003
|
6,017
|
*
|
0
|
6,017
|
6,017
|
0
|
*
|
|||||||||||||||
Fernandez,
Leslie
|
3,688
|
*
|
0
|
738
|
738
|
2,950
|
*
|
|||||||||||||||
Ferrick,
Patrick N.
|
9,479
|
*
|
0
|
1,896
|
1,896
|
7,583
|
*
|
Fischer,
Thaine J.
|
4,814
|
*
|
0
|
4,814
|
4,814
|
0
|
*
|
|||||||||||||||
Fookes,
Larry
|
46,529
|
*
|
3,577
|
22,9140
|
26,492
|
20,037
|
*
|
|||||||||||||||
Fookes,
Sharon
|
3,553
|
*
|
711
|
0
|
711
|
2,842
|
*
|
|||||||||||||||
Forest
Ridge Properties, Ltd.
|
12,441
|
*
|
0
|
2,488
|
2,488
|
9,953
|
*
|
|||||||||||||||
Forsman,
John Arvid
|
14,218
|
*
|
0
|
2,844
|
2,844
|
11,374
|
*
|
|||||||||||||||
Freeman,
Kevin
|
12,440
|
*
|
2,488
|
0
|
2,488
|
9,952
|
*
|
|||||||||||||||
Giammattei,
Shawn and Peggy
|
252
|
*
|
50
|
0
|
50
|
202
|
*
|
|||||||||||||||
Gaines,
Ira J.
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Galanty,
Thomas M.
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Gelber
Group
|
6,017
|
*
|
0
|
6,017
|
6,017
|
0
|
*
|
|||||||||||||||
Girard,
Roger E.
(5)
(6)
|
852,301
|
8.44
|
%
|
73,285
(7)
|
)
|
0
|
73,285
|
779,016
|
5.53
|
%
|
||||||||||||
Gold
Trust Co FBO Don Goeckner IRA
|
86,733
|
*
|
7,109
|
10,237
|
17,347
|
69,386
|
*
|
|||||||||||||||
Goldsmith,
Hugh G.
|
18,959
|
*
|
0
|
3,792
|
3,792
|
15,167
|
*
|
|||||||||||||||
Goodrich,
Daniel A
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Granger,
Jamie
|
10,529
|
*
|
0
|
2,106
|
2,106
|
8,423
|
*
|
|||||||||||||||
Griffith,
Richard and Barbara
|
17,772
|
*
|
3,554
|
0
|
3,554
|
14,218
|
*
|
|||||||||||||||
Griffiths,
Harlyn R. and Catherine G.
|
12,034
|
*
|
0
|
12,034
|
12,034
|
0
|
*
|
|||||||||||||||
Haenert,
Herman and Judith
|
4,814
|
*
|
0
|
4,814
|
4,814
|
0
|
*
|
|||||||||||||||
Hartley,
James N.
|
9,479
|
*
|
0
|
1,896
|
1,896
|
7,583
|
*
|
|||||||||||||||
Hedstrom,
Gary A.
|
2,527
|
*
|
505
|
0
|
505
|
2,022
|
*
|
|||||||||||||||
Hernandez,
Jesus and Melissa
|
16,955
|
*
|
2,737
|
2,844
|
5,581
|
11,374
|
*
|
|||||||||||||||
Holcomb,
Sr,, Hampton A.
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Hostetler
Living Trust
|
18,957
|
*
|
0
|
3,791
|
3,791
|
15,166
|
*
|
|||||||||||||||
Huls,
Michael, Roth IRA
|
33,000
|
*
|
33,000
|
0
|
33,000
|
0
|
*
|
|||||||||||||||
Iannicca,
Paul
|
6,949
|
*
|
0
|
6,949
|
6,949
|
0
|
*
|
|||||||||||||||
Intellegration,
LLP
|
25,526
|
*
|
25,526
|
0
|
25,526
|
0
|
*
|
|||||||||||||||
James
J. Minder & Susan A. Davis Family Trust
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Joffe,
Robert
|
12,034
|
*
|
0
|
12,034
|
12,034
|
0
|
*
|
|||||||||||||||
Johnson,
Carolyn M.
|
8,422
|
*
|
1,684
|
0
|
1,684
|
6,738
|
*
|
|||||||||||||||
Johnson,
Tom and Lindsay
|
8,422
|
*
|
1,684
|
0
|
1,684
|
6,738
|
*
|
|||||||||||||||
July
Partners LLP
|
16,847
|
*
|
0
|
16,847
|
16,847
|
0
|
*
|
|||||||||||||||
Kaiser,
James S.
|
10,950
|
*
|
10,950
|
0
|
10,950
|
10,950
|
*
|
|||||||||||||||
Kalos,
Shaun and Cathy
|
2,105
|
*
|
421
|
0
|
421
|
1,684
|
*
|
|||||||||||||||
Kang,
Dr. Young S.
|
16,260
|
*
|
3,252
|
0
|
3,252
|
13,008
|
*
|
|||||||||||||||
Kaser,
Kathryn and John Clark Kaser
|
710
|
*
|
142
|
0
|
142
|
568
|
*
|
|||||||||||||||
Kaser,
Kathryn and John Lucas Kaser
|
1,065
|
*
|
213
|
0
|
213
|
852
|
*
|
|||||||||||||||
Kaser,
Kathryn and Jordan Rae Emmil
|
1,065
|
*
|
213
|
0
|
213
|
852
|
*
|
|||||||||||||||
Kaser,
Kathryn and Kenneth Tyler Emmil
|
1,065
|
*
|
213
|
0
|
213
|
852
|
*
|
|||||||||||||||
Kaser,
Kathryn and Laura Kaser Emmil
|
710
|
*
|
142
|
0
|
142
|
568
|
*
|
|||||||||||||||
Kaser,
Kathryn and Levi Clark Kaser
|
1,065
|
*
|
213
|
0
|
213
|
852
|
*
|
|||||||||||||||
Katsinam
Partners LP
|
51,443
|
*
|
27,376
|
24,067
|
51,443
|
0
|
*
|
|||||||||||||||
Kauffman,
Robert R.
(5)
|
110,950
|
1.15
|
%
|
10,950
|
0
|
10,950
|
100,000
|
*
|
||||||||||||||
Kelly,
Gerald
|
4,211
|
*
|
842
|
0
|
842
|
3,369
|
*
|
|||||||||||||||
Kemeny,
Matthias D.
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Kennedy,
Patrick H. & Bonnie M.
(6)
|
54,506
|
*
|
0
|
10,901
|
10,901
|
43,605
|
*
|
|||||||||||||||
Klostermann,
Bill and Donna
|
16,425
|
*
|
16,425
|
0
|
16,425
|
0
|
*
|
|||||||||||||||
Kocherer,
Rosalee
|
2,105
|
*
|
421
|
0
|
421
|
1,684
|
*
|
|||||||||||||||
Konietzko,
Neil
|
8,423
|
*
|
1,685
|
0
|
1,685
|
6,738
|
*
|
|||||||||||||||
Korb,
Leroy J. MD
|
248,368
|
2.59
|
%
|
45,530
|
20,716
|
66,247
|
182,121
|
1.29
|
%
|
|||||||||||||
Koslowski,
Barbara
|
8,129
|
*
|
1,626
|
0
|
1,626
|
6,503
|
*
|
|||||||||||||||
Kryszek,
Jakob
|
40,522
|
*
|
8,104
|
0
|
8,104
|
32,418
|
*
|
|||||||||||||||
Lambert,
Patrick
|
33,000
|
*
|
33,000
|
0
|
33,000
|
0
|
*
|
|||||||||||||||
Lane
A. & Gwen M. Bray Trust
(6)
|
386,997
|
4.03
|
%
|
68,298
(7)
|
)
|
2,844
|
71,142
|
315,855
|
2.24
|
%
|
||||||||||||
Lanza,
Costantio IRA Charles Schwab & Co., Inc. Custodian
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Larson,
Damian
|
14,320
|
*
|
2,864
|
0
|
2,864
|
11,456
|
*
|
|||||||||||||||
Lavoy,
Thomas
(5)
|
108,423
|
1.12
|
%
|
1,685
|
0
|
1,685
|
106,738
|
*
|
||||||||||||||
Lawrence
Family Trust
(6)
|
888,529
|
9.28
|
%
|
177,706
(7)
|
)
|
0
|
177,706
|
710,823
|
5.05
|
%
|
||||||||||||
Le
Sueur, Charles
|
30,084
|
*
|
0
|
30,084
|
30,084
|
0
|
*
|
|||||||||||||||
Lebowitz
Living Trust
|
142,188
|
1.48
|
%
|
28,438
|
0
|
28,438
|
113,750
|
1.19
|
%
|
|||||||||||||
Little,
John W. and Marina Zeiber
|
9,627
|
*
|
0
|
9,627
|
9,627
|
0
|
*
|
|||||||||||||||
Livingston,
James P. & Keri Segna
|
14,218
|
*
|
2,844
|
0
|
2,844
|
11,374
|
*
|
|||||||||||||||
Lord,
Brandon
|
421
|
*
|
84
|
0
|
84
|
337
|
*
|
|||||||||||||||
Lord,
Leonard L. and Patricia G.
|
4,211
|
*
|
842
|
0
|
842
|
3,369
|
*
|
|||||||||||||||
MacKay,
Daniel P
|
18,015
|
*
|
3,603
|
0
|
3,603
|
14,412
|
*
|
|||||||||||||||
MacPherson,
Carl D. III and MacPherson, Marcia K. Revocable Living
Trust Dated
03/15/93
|
4,814
|
*
|
0
|
4,814
|
4,814
|
0
|
*
|
|||||||||||||||
Madsen,
James L.
|
166,706
|
1.73
|
%
|
27,130
|
0
|
27,130
|
139,576
|
1.15
|
%
|
|||||||||||||
Majchrowski,
Thomas
|
75,401
|
*
|
15,080
|
0
|
15,080
|
60,321
|
*
|
|||||||||||||||
Marlin
Hull LLC
|
179,422
|
*
|
179,422
|
0
|
179,422
|
0
|
*
|
|||||||||||||||
Martin,
Leslie A
|
14,218
|
*
|
0
|
2,844
|
2,844
|
11,374
|
*
|
|||||||||||||||
Mason,
David Vere
|
4,814
|
*
|
0
|
4,814
|
4,814
|
0
|
*
|
|||||||||||||||
Mason,
Vere Karsdale
|
4,814
|
*
|
0
|
4,814
|
4,814
|
0
|
*
|
|||||||||||||||
Matsock,
Mark
|
54,271
|
*
|
10,950
|
43,321
|
54,271
|
0
|
*
|
|||||||||||||||
McInnis,
Greg and Cynthia Family Trust
|
7,220
|
*
|
0
|
7,220
|
7,220
|
0
|
*
|
|||||||||||||||
McKenna,
Jean
|
16,260
|
*
|
3,252
|
0
|
3,252
|
13,008
|
*
|
|||||||||||||||
Meadow,
Stephen
|
33,000
|
*
|
33,000
|
0
|
33,000
|
0
|
*
|
|||||||||||||||
Mebesius,
William
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Meyers
Associates, LP
|
29,348
|
*
|
0
|
29,348
|
29,348
|
0
|
*
|
|||||||||||||||
Miller,
Thomas F.
|
289,159
|
3.02
|
%
|
289,159
|
0
|
289,159
|
0
|
*
|
Moore,
Terry R
|
15,427
|
*
|
6,469
|
995
|
7,465
|
7,962
|
*
|
|||||||||||||||
Moseley,
Gerard F.
|
9,526
|
*
|
0
|
1,905
|
1,905
|
7,621
|
*
|
|||||||||||||||
Moss,
Lynette F.
|
8,424
|
*
|
0
|
8,424
|
8,424
|
0
|
*
|
|||||||||||||||
Mountain
View Asset Management
|
24,067
|
*
|
0
|
24,067
|
24,067
|
0
|
*
|
|||||||||||||||
Mountain
View Opportunistic Growth Fund LP
|
44,223
|
*
|
30,745
|
0
|
30,745
|
13,478
|
*
|
|||||||||||||||
Muldoon,
William G and Janet L
|
100,930
|
1.05
|
%
|
26,022
|
26,565
|
52,587
|
48,343
|
*
|
||||||||||||||
Murphy,
Tom
|
3,369
|
*
|
674
|
0
|
674
|
2,695
|
*
|
|||||||||||||||
Newman,
Bruce W. & Jeannie G.
|
16,587
|
*
|
1,422
|
1,896
|
3,317
|
13,270
|
*
|
|||||||||||||||
Nichols,
Dale and Kathyrn E. Kaser
|
17,772
|
*
|
0
|
3,554
|
3,554
|
14,218
|
*
|
|||||||||||||||
Oak
Ridge Financial Services Group, Inc.
|
3,285
|
*
|
0
|
3,285
|
3,285
|
0
|
*
|
|||||||||||||||
Oliver,
Marlene
|
58,322
|
*
|
0
|
44,002
|
44,002
|
14,320
|
*
|
|||||||||||||||
Olson,
Claire A & Mary Ann
|
14,218
|
*
|
2,844
|
0
|
2,844
|
11,374
|
*
|
|||||||||||||||
Onwuegbusi,
Charles
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Ott,
Suzann J & Dennis L.
|
35,546
|
*
|
7,109
|
0
|
7,109
|
28,437
|
*
|
|||||||||||||||
Oystacher,
Igor
|
6,017
|
*
|
0
|
6,017
|
6,017
|
0
|
*
|
|||||||||||||||
Palasota,
Vince
|
7,220
|
*
|
0
|
7,220
|
7,220
|
0
|
*
|
|||||||||||||||
Palitz,
Louis and Ruth
|
17,772
|
*
|
3,554
|
0
|
3,554
|
14,218
|
*
|
|||||||||||||||
Peterson,
Jerry
|
38,326
|
*
|
38,326
|
0
|
38,326
|
0
|
*
|
|||||||||||||||
Pinnacle
International Holdings LLC
|
177,736
|
1.82
|
%
|
0
|
35,547
|
35,547
|
142,189
|
1.01
|
%
|
|||||||||||||
Press,
Richard
|
227,652
|
2.38
|
%
|
45,530
|
0
|
45,530
|
182,122
|
1.29
|
%
|
|||||||||||||
Quatsch
Ventures, LLC
(5)
|
84,236
|
*
|
0
|
84,236
|
84,236
|
0
|
*
|
|||||||||||||||
Reynolds,
J. Scott
|
6,017
|
*
|
0
|
6,017
|
6,017
|
0
|
*
|
|||||||||||||||
Robert
Furney Living Trust
|
24,067
|
*
|
0
|
24,067
|
24,067
|
0
|
*
|
|||||||||||||||
Roberts,
Cory B.
|
1,263
|
*
|
252
|
0
|
252
|
1,011
|
*
|
|||||||||||||||
Roberts,
Elizabeth
|
1,263
|
*
|
253
|
0
|
253
|
1,011
|
*
|
|||||||||||||||
Roberts,
Joshua
|
2,947
|
*
|
589
|
0
|
589
|
2,358
|
*
|
|||||||||||||||
Roberts,
Donald
|
4,211
|
*
|
842
|
0
|
842
|
3,369
|
*
|
|||||||||||||||
Roberts,
Leslie and Rex Armstrong
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Rogers,
Philip and Stephanie (9)
|
8,245
|
*
|
8,245
|
0
|
8,245
|
0
|
*
|
|||||||||||||||
Roman,
Patrick and Nichole
|
1,052
|
*
|
210
|
0
|
210
|
842
|
*
|
|||||||||||||||
Ronald
L and Susan R. Kathren Trust
|
5,171
|
*
|
0
|
5,171
|
5,171
|
0
|
*
|
|||||||||||||||
Root,
R. William, Jr.
|
76,157
|
*
|
37,131
|
0
|
37,131
|
39,026
|
*
|
|||||||||||||||
Roozen,
Richard and Jaynie
|
5,474
|
*
|
5,474
|
0
|
5,474
|
0
|
*
|
|||||||||||||||
Rothstein,
Alan F.
|
35,546
|
*
|
7,109
|
0
|
7,109
|
28,437
|
*
|
|||||||||||||||
Rothstein,
Lawrence R. and Deborah E.
|
24,067
|
*
|
0
|
24,067
|
24,067
|
0
|
*
|
|||||||||||||||
Rowland,
Chris C.
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Russell,
Jerry L.
|
7,220
|
*
|
0
|
7,220
|
7,220
|
0
|
*
|
|||||||||||||||
S
& J Veal, Inc.
|
6,017
|
*
|
0
|
6,017
|
6,017
|
0
|
*
|
|||||||||||||||
Safdi
Investments Limited Partnership
|
62,921
|
*
|
34,484
|
0
|
34,484
|
28,437
|
*
|
|||||||||||||||
Saito,
Dr. Robert N.
|
14,218
|
*
|
2,844
|
0
|
2,844
|
11,374
|
*
|
|||||||||||||||
Sanders
Family Limited Partnership III
|
28,880
|
*
|
3,369
|
12,034
|
15,403
|
13,477
|
*
|
|||||||||||||||
Sanders,
Vernon
|
41,275
|
*
|
8,255
|
0
|
8,255
|
33,020
|
*
|
|||||||||||||||
Scallen,
Thomas K.(9)
|
329,942
|
3.44
|
%
|
329,942
|
0
|
329,942
|
0
|
*
|
||||||||||||||
Schatzmair,
Ralph
|
33,091
|
*
|
4,211
|
12,034
|
16,245
|
16,846
|
*
|
|||||||||||||||
Schenter,
Robert
|
218,860
|
2.27
|
%
|
35,489
|
41,417
|
76,905
|
141,955
|
1.01
|
%
|
|||||||||||||
Schipfer,
John D., Jr.
|
5,263
|
*
|
1,053
|
0
|
1,053
|
4,210
|
*
|
|||||||||||||||
Schloz
Family 1998 Trust
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Schloz,
Stanley Roth IRA
|
33,000
|
*
|
33,000
|
0
|
33,000
|
0
|
*
|
|||||||||||||||
Schramm,
Margaret
|
6,017
|
*
|
0
|
6,017
|
6,017
|
0
|
*
|
|||||||||||||||
Schreifels,
Donald B
|
40,914
|
*
|
3,369
|
24,067
|
27,437
|
13,477
|
*
|
|||||||||||||||
Ruth
Schwartz Trust
|
49,766
|
*
|
4,977
|
4,976
|
9,953
|
39,813
|
*
|
|||||||||||||||
Schwartz,
Benjamin, MD, PC
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Schwartz,
Jacob
|
13,357
|
*
|
10,950
|
2,407
|
13,357
|
13,357
|
*
|
|||||||||||||||
Segna,
Donald R & Joan F.
(6)
|
511,213
|
5.34
|
%
|
96,515
(7
|
)
|
0
|
96,515
|
414,638
|
2.94
|
%
|
||||||||||||
Segna,
Jan M
|
14,218
|
*
|
0
|
2,844
|
2,844
|
11,374
|
*
|
|||||||||||||||
Segna,
Todd D. & Deborah L.J. Chew
|
21,327
|
*
|
0
|
4,265
|
4,265
|
17,062
|
*
|
|||||||||||||||
Selma
Teicher Trust
|
4,814
|
*
|
0
|
4,814
|
4,814
|
0
|
*
|
|||||||||||||||
Shimek,
Chad J.
|
6,017
|
*
|
0
|
6,017
|
6,017
|
0
|
*
|
|||||||||||||||
Shukov,
George
|
227,652
|
2.38
|
%
|
45,530
|
0
|
45,530
|
182,122
|
1.29
|
%
|
|||||||||||||
Siddall,
John W.
|
54,752
|
*
|
54,752
|
0
|
54,752
|
0
|
*
|
|||||||||||||||
Sidibe,
Aissata
|
35,546
|
*
|
0
|
7,109
|
7,109
|
28,437
|
*
|
|||||||||||||||
Silverman,
Anthony
|
682,052
|
6.93
|
%
|
422,323
|
259,729
|
682,052
|
0
|
*
|
||||||||||||||
Silverman,
Kay
|
24,067
|
*
|
0
|
24,067
|
24,067
|
0
|
*
|
|||||||||||||||
Silverman,
Kay S. Revocable Trust
|
32,851
|
*
|
32,851
|
0
|
32,851
|
0
|
*
|
|||||||||||||||
Singleton,
Julie
|
24,067
|
*
|
0
|
24,067
|
24,067
|
0
|
*
|
|||||||||||||||
Smith,
Albert
|
121,447
|
1.27
|
%
|
21,789
|
2,500
|
24,289
|
97,158
|
*
|
||||||||||||||
Smith,
Thomas S. and Sheila T.
|
17,828
|
*
|
2,844
|
3,610
|
6,454
|
11,374
|
*
|
|||||||||||||||
Source
Capital Group, Inc.
|
9,857
|
*
|
0
|
9,857
|
9,857
|
0
|
*
|
|||||||||||||||
Stack,
Peter R and Judy J
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Stealth
Investments, Inc.
|
35,800
|
*
|
27,376
|
8,424
|
35,800
|
0
|
*
|
|||||||||||||||
Stenson,
Calvin B.
|
8,423
|
*
|
1,685
|
0
|
1,685
|
6,738
|
*
|
|||||||||||||||
Sterne
Agee and Leach, Inc. C/F Jill Ryan IRA
|
5,474
|
*
|
5,474
|
0
|
5,474
|
0
|
*
|
|||||||||||||||
Sterne
Agee and Leach, Inc. C/F Robert Ryan IRA
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Sterne
Agee Leach FBO Barry K Griffith IRA
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Sterne
Agee Leach, Inc C/F Paul E Ruecker IRA Rollover
|
4,814
|
*
|
0
|
4,814
|
4,814
|
0
|
*
|
|||||||||||||||
Sterne,
Agee & Leach, IPO C/F Robert Ryan SEP IRA
|
7,220
|
*
|
0
|
7,220
|
7,220
|
0
|
*
|
|||||||||||||||
Stewart,
James P. and Patricia A.
|
10,950
|
*
|
10,950
|
0
|
10,950
|
0
|
*
|
|||||||||||||||
Stiller,
David L & Bonita L.
|
54,740
|
*
|
2,844
|
8,104
|
10,948
|
43,792
|
*
|
Stokes,
William J.
|
78,052
|
*
|
15,610
|
0
|
15,610
|
62,442
|
*
|
|||||||||||||||
Strain,
Audrey
|
4,975
|
*
|
0
|
995
|
995
|
3,980
|
*
|
|||||||||||||||
Swanberg,
Daniel L. & Joni A.
|
9,479
|
*
|
1,896
|
0
|
1,896
|
7,583
|
*
|
|||||||||||||||
Swanberg,
David J. and Janet C.
(5)
(6)
|
290,235
|
3.03
|
%
|
55,203
(7
|
)
|
2,844
|
58,047
|
232,188
|
1.65
|
%
|
||||||||||||
The
Alan Gess Living Trust, UTD 02/03/05
|
21,327
|
*
|
4,265
|
0
|
4,265
|
17,062
|
*
|
|||||||||||||||
The
Anderson Family Trust UTD 12/20/93
|
21,059
|
*
|
4,212
|
0
|
4,212
|
16,847
|
*
|
|||||||||||||||
The
Bates Revocable Trust
|
37,144
|
*
|
6,283
|
0
|
6,283
|
30,861
|
*
|
|||||||||||||||
The
Lanzer Revocable Living Trust
|
18,051
|
*
|
0
|
18,051
|
18,051
|
0
|
*
|
|||||||||||||||
The
Nancy R. McCormick Family Trust U/A dated June 14, 2002
|
4,814
|
*
|
0
|
4,814
|
4,814
|
0
|
*
|
|||||||||||||||
The
Smart Family Trust
|
10,450
|
*
|
6,469
|
0
|
6,469
|
3,981
|
*
|
|||||||||||||||
Thomas,
Cam
|
56,875
|
*
|
11,375
|
0
|
11,375
|
45,500
|
*
|
|||||||||||||||
Thompson,
April
|
4,975
|
*
|
995
|
0
|
995
|
3,980
|
*
|
|||||||||||||||
Thompson,
Karen
(6)
|
27,192
|
*
|
4,293
(7
|
)
|
0
|
4,293
|
22,899
|
*
|
||||||||||||||
Thompson,
Randy
|
4,975
|
*
|
995
|
0
|
995
|
3,980
|
*
|
|||||||||||||||
Thompson,
William and Karen Trust
(6)
|
14,218
|
*
|
0
|
2,844
|
2,844
|
11,374
|
*
|
|||||||||||||||
TTR
Properties, LLC
|
48,135
|
*
|
0
|
48,135
|
48,135
|
0
|
*
|
|||||||||||||||
Turchetta,
Anthony J
|
14,218
|
*
|
2,844
|
0
|
2,844
|
11,374
|
*
|
|||||||||||||||
Turnbull,
Timothy L.
|
8,530
|
*
|
1,706
|
0
|
1,706
|
6,824
|
*
|
|||||||||||||||
UBS
Financial Services IRA FBO Robert R Kauffman
(6)
|
32,851
|
*
|
32,851
|
0
|
32,851
|
0
|
*
|
|||||||||||||||
Van
Benthem, Heather
|
12,034
|
*
|
0
|
12,034
|
12,034
|
0
|
*
|
|||||||||||||||
Van
Leeuwen, John E. and Christine
|
7,220
|
*
|
0
|
7,220
|
7,220
|
0
|
*
|
|||||||||||||||
Vencore
LLC
|
5,692
|
*
|
0
|
5,692
|
5,692
|
0
|
*
|
|||||||||||||||
Viereck,
Wayne R. and Patricia A.
|
4,814
|
*
|
0
|
4,814
|
4,814
|
0
|
*
|
|||||||||||||||
Charles
Schwab & Company, Inc., Custodian, Vista Mortgage IRA Services,
Inc.
401(k) FBO James Scannell
|
6,980
|
*
|
0
|
6,980
|
6,980
|
0
|
*
|
|||||||||||||||
Waters,
Bryan
|
18,051
|
*
|
0
|
18,051
|
18,051
|
0
|
*
|
|||||||||||||||
Weber,
Ronald
|
4,211
|
*
|
842
|
0
|
842
|
3,369
|
*
|
|||||||||||||||
Weinstein
Inter-Vivos Trust Agreement Lawrence and Gloria Weinstein
|
24,067
|
*
|
0
|
24,067
|
24,067
|
0
|
*
|
|||||||||||||||
Weinstein,
Ronald A 2004 Living Trust
|
9,479
|
*
|
0
|
1,896
|
1,896
|
7,583
|
*
|
|||||||||||||||
Weinstein,
Ronald Alan and Cathy Lynn
|
61,799
|
*
|
0
|
21,987
|
21,987
|
39,812
|
*
|
|||||||||||||||
West,
Ron H.
|
4,211
|
*
|
842
|
0
|
842
|
3,369
|
*
|
|||||||||||||||
Whalen,
Ryan and Jennifer
|
1,052
|
*
|
210
|
0
|
210
|
842
|
*
|
|||||||||||||||
Whitehead,
David L and Donna F.
|
39,672
|
*
|
21,900
|
3,554
|
25,454
|
14,218
|
*
|
|||||||||||||||
Wilkie,
David J
|
8,423
|
*
|
1,685
|
0
|
1,685
|
6,738
|
*
|
|||||||||||||||
Wynnjam
Corp.
|
107,057
|
1.11
|
%
|
10,950
|
96,107
|
107,057
|
0
|
*
|
||||||||||||||
Zaragosa,
Ernesto
|
16,847
|
*
|
16,847
|
16,847
|
0
|
*
|
||||||||||||||||
Zielke,
David C. and Diane M.
|
34,123
|
*
|
6,825
|
0
|
6,825
|
27,298
|
*
|
|||||||||||||||
Zimmerman,
Paul
|
21,327
|
*
|
4,265
|
0
|
4,265
|
17,062
|
*
|
|||||||||||||||
Totals
|
12,215,151
|
86.73
|
%
|
3,701,028
|
1,754,141
|
5,441,022
|
6,774,129
|
61.37
|
%
|
*
|
Less
than one percent.
|
(1) |
The
number and percentage of shares beneficially owned is determined
in
accordance with Rule 13d-3 of the Securities Exchange Act
of 1934, as
amended, and the information is not necessarily indicative
of beneficial
ownership for any other purpose. Under such rule, beneficial
ownership
includes any shares as to which the selling shareholder
has sole or shared
voting power or investment power and also any shares that
the selling
shareholder has the right to acquire within 60 days.
|
(2)
|
The
actual number of shares of common stock offered in this prospectus,
and
included in the registration statement of which this prospectus
is a part,
includes such additional number of shares of common stock as
may be issued
or issuable upon conversion of the convertible debentures by
reason of any
stock split, stock dividend or similar transaction involving
the common
stock, in accordance with Rule 416 under the Securities Act
of 1933, as
amended.
|
(3) |
This
column includes all shares of common stock issuable upon conversion
of
preferred stock and convertible debentures and exercise of
options and
warrants, as applicable, held by the named selling shareholder.
|
(4) |
Assumes
that all securities registered will be sold.
|
(5) |
These
selling shareholders are our executive officers and directors,
or are
entities controlled by our executive officers and
directors.
|
(6) |
These
selling shareholders are executive officers and directors of
our
subsidiary, or are entities controlled by the executive officers
and
directors of our subsidiary.
|
(7) |
Indicates
shares subject to lock-up through July 28, 2006.
|
(8) |
233,333
of these shares are subject to lock-up through July 28, 2006.
|
(9) |
These
selling shareholders are our former executive officers and
directors.
|
· |
ordinary
brokers’ transactions,
|
· |
through
brokers, dealers, or underwriters who may act solely as agents,
|
· |
“at
the market” into an existing market for the common stock,
|
· |
in
other ways not involving market makers or established trading
markets,
including direct sales to purchasers or sales effected through
agents,
|
· |
in
privately negotiated transactions, and
|
· |
any
combination of the foregoing.
|
Page | |||
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-3
|
|
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-4
|
|
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-5
|
|
Statements
of Cash Flows
|
|
||
for
the nine months ended June 30, 2005 and
|
|
||
for
the years ended September 30, 2004 and 2003
|
|
F-6
|
|
Notes
to Financial Statements
|
|
F-7
|
|
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)
|
$
|
274,372
|
$
|
75,757
|
$
|
(60,027
|
)
|
|||
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
J
une
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
|
$
|
-
|
$
|
-
|
$
|
-
|
Page
|
|
Report of Independent Auditor |
F-20
|
Financial Statements | |
Combined
Balance Sheets as of June 30, 2005 and
2004
|
F-21
|
Combined
Statements of Operations for the years ended June 30, 2005
and 2004
|
F-22
|
Combined
Statement of Changes in Shareholders’ Equity (Deficit) for
the years ended June 30, 2005 and 2004
|
F-23
|
Combined
Statements of Cash Flows for the years ended June 30, 2005
and 2004
|
F-24
|
Notes
to Combined Financial Statements
|
F-25
|
Combined
Balance Sheets
June
30, 2005 and 2004
|
||||||||||
2005
|
2004
|
|||||||||
ASSETS
|
|
|||||||||
Current
assets:
|
|
|||||||||
Cash
and cash equivalents (Note 2)
|
$
|
1,653,144
|
$
|
470,439
|
||||||
Accounts
receivable, net of allowance for doubtful
|
||||||||||
accounts
of $17,075
|
49,969
|
-
|
||||||||
Inventory
(Note 5)
|
81,926
|
19,726
|
||||||||
Prepaid
expenses (Note 6)
|
181,266
|
77,133
|
||||||||
Total
current assets
|
1,966,305
|
567,298
|
||||||||
Fixed
assets, net of accumulated depreciation and amortization (Note
7)
|
842,323
|
297,181
|
||||||||
Other
assets, net of accumulated amortization (Note 8)
|
793,756
|
96,295
|
||||||||
Total
assets
|
$
|
3,602,384
|
$
|
960,774
|
||||||
LIABILITIES
AND SHAREHOLDERS' EQUITY (DEFICIT)
|
||||||||||
Current
liabilities:
|
||||||||||
Accounts
payable
|
$
|
695,588
|
$
|
129,021
|
||||||
Accrued
payroll and related taxes
|
157,924
|
58,010
|
||||||||
Accrued
interest payable
|
41,325
|
8,235
|
||||||||
Other
current liabilities (Note 4)
|
-
|
91,765
|
||||||||
Notes
payable, due within one year (Note 10)
|
43,116
|
10,000
|
||||||||
Capital
lease obligations, due within one year (Note 11)
|
9,604
|
-
|
||||||||
Total
current liabilities
|
947,557
|
297,031
|
||||||||
Notes
payable, due after one year (Note 10)
|
562,224
|
350,000
|
||||||||
Capital
lease obligations, due after one year (Note 11)
|
19,584
|
-
|
||||||||
Convertible
debentures payable, due after one year (Note 12)
|
3,587,875
|
-
|
||||||||
Total
liabilities
|
5,117,240
|
647,031
|
||||||||
Commitments
and contingencies (Notes 16 and 17)
|
||||||||||
Shareholders'
equity (deficit) (Notes 1, 4 and 13):
|
||||||||||
Preferred
stock, $.001 par value, 10,000,000 shares authorized:
|
||||||||||
Series
A: No shares issued and outstanding
|
-
|
-
|
||||||||
Series
B: 1,588,589 and no shares issued and outstanding
|
1,589
|
-
|
||||||||
IsoRay
Medical, Inc. common stock, $.001 par value; 100,000,000 shares
|
||||||||||
authorized;
7,317,073 and 10,000 shares issued and outstanding
|
7,317
|
10
|
||||||||
IsoRay,
Inc. common stock , $.001 par value; 20,000,000 shares authorized;
|
||||||||||
no
shares and 2,767,700 shares issued and outstanding
|
-
|
2,768
|
||||||||
Additional
paid-in capital
|
3,804,369
|
1,369,908
|
||||||||
Accumulated
deficit
|
(5,328,131
|
)
|
(1,058,943
|
)
|
||||||
Total
shareholders' equity (deficit)
|
(1,514,856
|
)
|
313,743
|
|||||||
Total
liabilities and shareholders' equity (deficit)
|
$
|
3,602,384
|
$
|
960,774
|
IsoRay
Medical, Inc.
Combined
Statements of Operations
Years
Ended June 30, 2005 and 2004
|
||||||||||
2005
|
2004
|
|||||||||
Product
sales
|
$
|
201,731
|
$
|
-
|
||||||
Cost
of product sales (Note 5)
|
1,474,251
|
-
|
||||||||
Gross
profit (loss)
|
(1,272,520
|
)
|
-
|
|||||||
Operating
expenses:
|
||||||||||
Research
and development
|
137,532
|
42,326
|
||||||||
Sales
and marketing expenses
|
701,822
|
81,486
|
||||||||
General
and administrative expenses
|
1,871,325
|
650,161
|
||||||||
Total
operating expenses
|
2,710,679
|
773,973
|
||||||||
Operating
loss
|
(3,983,199
|
)
|
(773,973
|
)
|
||||||
Non-operating
income (expense):
|
||||||||||
Interest
income
|
2,394
|
1,898
|
||||||||
Financing
expense (Note 8)
|
(167,493
|
)
|
(23,470
|
)
|
||||||
Loss
on disposal of fixed assets
|
(120,890
|
)
|
-
|
|||||||
Non-operating
income (expense), net
|
(285,989
|
)
|
(21,572
|
)
|
||||||
Net
loss
|
$
|
(4,269,188
|
)
|
$
|
(795,545
|
)
|
||||
Net
loss per share of common stock
|
$
|
(0.66
|
)
|
$
|
(0.15
|
)
|
||||
Basic
weighted average shares outstanding (Note 2)
|
6,493,700
|
5,174,346
|
Combined
Statement of Changes in Shareholders' Equity
(Deficit)
Years
Ended June 30, 2005 and 2004
|
||||||||||||||||||||||||||||
IsoRay,
Inc.
|
IsoRay
Medical, Inc.
|
Additional
|
||||||||||||||||||||||||||
Common
Stock
|
Series
B Preferred Stock
|
Common
Stock
|
Paid-in
|
Accumulated
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
||||||||||||||||||||
Balances
at June 30, 2003
|
2,607,700
|
$
|
2,608
|
-
|
$
|
-
|
-
|
$
|
-
|
$
|
181,642
|
$
|
(263,398
|
)
|
$
|
(79,148
|
)
|
|||||||||||
Issuance
of IsoRay, Inc. common shares as payment
for
prototype laser welding station (Note 13)
|
80,000
|
80
|
79,920
|
80,000
|
||||||||||||||||||||||||
Issuance
of IsoRay, Inc. common shares for cash
|
80,000
|
80
|
79,920
|
80,000
|
||||||||||||||||||||||||
Issuance
of IsoRay Products LLC member shares
for
cash, net of offering costs (Note 4)
|
1,060,201
|
1,060,201
|
||||||||||||||||||||||||||
Accrual
of dividends payable to IsoRay Products LLC
members
(Note 4)
|
(91,765
|
)
|
(91,765
|
)
|
||||||||||||||||||||||||
Issuance
of IsoRay Products LLC member shares and
IsoRay
Medical, Inc. common shares to related
party
for cash and compensation (Note 15)
|
10,000
|
10
|
59,990
|
60,000
|
||||||||||||||||||||||||
Net
loss for the year ended June 30, 2004
|
(795,545
|
)
|
(795,545
|
)
|
||||||||||||||||||||||||
Balances
at June 30, 2004
|
2,767,700
|
2,768
|
-
|
-
|
10,000
|
10
|
1,369,908
|
(1,058,943
|
)
|
313,743
|
||||||||||||||||||
Issuance
of IsoRay, Inc. common shares pursuant to
exercise
of options (Note 13)
|
71,580
|
71
|
71,509
|
71,580
|
||||||||||||||||||||||||
Issuance
of IsoRay, Inc. common shares as
compensation
(Note 13)
|
57,025
|
57
|
56,968
|
57,025
|
||||||||||||||||||||||||
Issuance
of IsoRay Products LLC member shares for
cash,
net of offering costs (Note 4)
|
303,743
|
303,743
|
||||||||||||||||||||||||||
Merger
transaction (Note 1)
|
(2,896,305
|
)
|
(2,896
|
)
|
1,483,723
|
1,484
|
6,167,426
|
6,167
|
(4,755
|
)
|
-
|
|||||||||||||||||
Reversal
of dividends accrued by IsoRay
Products
LLC (Note 4)
|
91,765
|
91,765
|
||||||||||||||||||||||||||
Issuance
of IsoRay Medical, Inc. common shares for
cash
pursuant to private placement, net of offering
costs
(Note 4)
|
765,500
|
766
|
1,355,812
|
1,356,578
|
||||||||||||||||||||||||
Issuance
of IsoRay Medical, Inc. common shares
pursuant
to exercise of warrants granted in connection
with
private placement (Note 13)
|
129,750
|
130
|
64,745
|
64,875
|
||||||||||||||||||||||||
Issuance
of IsoRay Medical, Inc. common shares as
inducement
for guarantee of debt (Note 13)
|
211,140
|
211
|
348,170
|
348,381
|
||||||||||||||||||||||||
Issuance
of IsoRay Medical, Inc. common shares as
partial
payment for laser welding stations (Note 13)
|
30,303
|
30
|
49,970
|
50,000
|
||||||||||||||||||||||||
Issuance
of Series B preferred shares pursuant
to
exercise of warrants (Note 13)
|
107,820
|
108
|
96,634
|
96,742
|
||||||||||||||||||||||||
Exchange
of Series B preferred shares for IsoRay
Medical,
Inc. common shares
|
(2,954
|
)
|
(3
|
)
|
2,954
|
3
|
-
|
|||||||||||||||||||||
Payments
to common shareholders in lieu of issuing
fractional
shares (Note 13)
|
(100
|
)
|
(100
|
)
|
||||||||||||||||||||||||
Net
loss for the year ended June 30, 2005
|
(4,269,188
|
)
|
(4,269,188
|
)
|
||||||||||||||||||||||||
Balances
at June 30, 2005
|
-
|
$
|
-
|
1,588,589
|
$
|
1,589
|
7,317,073
|
$
|
7,317
|
$
|
3,804,369
|
$
|
(5,328,131
|
)
|
$
|
(1,514,856
|
)
|
Combined
Statements of Cash Flows
Years
Ended June 30, 2005 and 2004
|
||||||||||
2005
|
2004
|
|||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|||||||||
Net
loss
|
$
|
(4,269,188
|
)
|
$
|
(795,545
|
)
|
||||
Adjustments
to reconcile net loss to net cash used by operating
|
||||||||||
activities:
|
||||||||||
Depreciation
and amortization of fixed assets
|
140,099
|
23,233
|
||||||||
Amortization
of deferred financing costs and other assets
|
82,358
|
5,200
|
||||||||
Loss
on disposal of fixed assets
|
120,890
|
-
|
||||||||
Compensation
recorded in connection with issuance of common stock
|
57,025
|
59,900
|
||||||||
Changes
in operating assets and liabilities:
|
||||||||||
Accounts
receivable, net
|
(49,969
|
)
|
-
|
|||||||
Inventory
|
(62,200
|
)
|
(19,726
|
)
|
||||||
Prepaid
expenses
|
(104,133
|
)
|
(72,439
|
)
|
||||||
Accounts
payable
|
566,567
|
114,958
|
||||||||
Accrued
payroll and related taxes
|
99,914
|
58,010
|
||||||||
Accrued
interest payable
|
33,090
|
107
|
||||||||
Net
cash used by operating activities
|
(3,385,547
|
)
|
(626,302
|
)
|
||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||
Purchases
of fixed assets
|
(724,029
|
)
|
(167,875
|
)
|
||||||
Additions
to other assets
|
(431,438
|
)
|
(70,117
|
)
|
||||||
Net
cash used by investing activities
|
(1,155,467
|
)
|
(237,992
|
)
|
||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||
Borrowings
under notes payable
|
315,000
|
330,000
|
||||||||
Proceeds
from sales of convertible debentures payable
|
3,587,875
|
-
|
||||||||
Principal
payments on notes payable
|
(23,653
|
)
|
(139,803
|
)
|
||||||
Principal
payments on capital lease obligations
|
(2,914
|
)
|
-
|
|||||||
Issuance
of common shares and LLC member shares for cash, net of
|
||||||||||
offering
costs
|
1,847,511
|
1,140,301
|
||||||||
Payments
to common and Series B preferred shareholders in lieu of
|
||||||||||
issuing
fractional shares
|
(100
|
)
|
-
|
|||||||
Net
cash provided by financing activities
|
5,723,719
|
1,330,498
|
||||||||
Net
increase in cash and cash equivalents
|
1,182,705
|
466,204
|
||||||||
Cash
and cash equivalents, beginning of period
|
470,439
|
4,235
|
||||||||
CASH
AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
1,653,144
|
$
|
470,439
|
||||||
Supplemental
disclosures of cash flow information:
|
||||||||||
Cash
paid for interest
|
$
|
57,657
|
$
|
23,577
|
||||||
Non-cash
investing and financing activities:
|
||||||||||
Fixed
assets acquired by capital lease obligations
|
$
|
32,102
|
$
|
-
|
||||||
Issuance
of IsoRay Medical, Inc. preferred shares for debt reduction
|
$
|
46,007
|
||||||||
Issuance
of common shares as compensation for guarantee of debt
|
$
|
348,381
|
||||||||
Accrual
(reversal) of dividends payable to IsoRay Products LLC members
|
$
|
(91,765
|
)
|
$
|
91,765
|
|||||
Issuance
of common shares for laser welding stations purchases
|
$
|
50,000
|
$
|
80,000
|
2005
|
2004
|
||||||
Raw
materials
|
$
|
27,659
|
$
|
19,726
|
|||
Work
in process
|
54,267
|
—
|
|||||
$
|
81,926
|
$
|
19,726
|
2005
|
2004
|
||||||
Prepaid
contract work
|
$
|
65,328
|
$
|
69,063
|
|||
Prepaid
insurance
|
15,853
|
5,350
|
|||||
Other
prepaid expenses
|
100,085
|
2,720
|
|||||
$
|
181,266
|
$
|
77,133
|
2005
|
2004
|
||||||
Production
equipment
|
$
|
399,448
|
$
|
290,864
|
|||
Office
equipment
|
65,077
|
17,339
|
|||||
Furniture
and fixtures
|
7,736
|
7,736
|
|||||
Leasehold
improvements
|
138,692
|
38,368
|
|||||
610,953
|
354,307
|
||||||
Less
accumulated depreciation and amortization
|
(134,664
|
)
|
(57,126
|
)
|
|||
476,289
|
297,181
|
||||||
Construction
in progress (Note 16)
|
366,034
|
--
|
|||||
$
|
842,323
|
$
|
297,181
|
2005
|
2004
|
||||||
Deferred
financing costs, net of accumulated
amortization
of $76,746
|
$
|
548,837
|
$
|
--
|
|||
Deferred
charges
|
204,649
|
84,683
|
|||||
Patents
and trademarks, net of accumulated
amortization
of $12,318 and $9,380
|
21,614
|
9,425
|
|||||
Licenses,
net of accumulated amortization of
$2,674
and $-0-
|
18,656
|
2,187
|
|||||
$
|
793,756
|
$
|
96,295
|
Year
ending June 30,
|
||||
2006
|
$
|
13,524
|
||
2007
|
13,238
|
|||
2008
|
9,819
|
|||
Total
future minimum lease payments
|
36,581
|
|||
Less
amount due within one year
|
(7,393
|
)
|
||
Present
value of net minimum lease payments
|
29,188
|
|||
Less
amount due within one year
|
(9,604
|
)
|
||
Amount
due after one year
|
$
|
19,584
|
Number
of
Shares
|
Exercise
Price
|
Expiration
Date
|
||
7,385
|
$.59
|
July
1, 2005
|
||
67,520
|
$.59
|
October
30, 2006
|
||
33,760
|
$.59
|
January
31, 2007
|
||
7,385
|
$.59
|
February
28, 2007
|
||
67,520
|
$.59
|
March
30, 2007
|
||
90,096
|
$.89
|
July
1, 2005
|
||
90,096
|
$.89
|
February
28, 2007
|
||
10,339
|
$1.18
|
July
1, 2005
|
||
10,339
|
$1.18
|
February
28, 2007
|
||
384,440
|
$.59
to $1.18
|
Number
of
Shares
|
Exercise
Price
|
Expiration
Date
|
||
7,385
|
$.59
|
July
1, 2005
|
||
90,096
|
$.89
|
July
1, 2005
|
||
10,339
|
$1.18
|
July
1, 2005
|
||
107,820
|
$.59
to $1.18
|
Number
of
Shares
|
Exercise
Price
|
Expiration
Date
|
||
67,520
|
$.59
|
October
30, 2006
|
||
33,760
|
$.59
|
January
31, 2007
|
||
7,385
|
$.59
|
February
28, 2007
|
||
67,520
|
$.59
|
March
30, 2007
|
||
90,096
|
$.89
|
February
28, 2007
|
||
10,339
|
$1.18
|
February
28, 2007
|
||
276,620
|
$.59
to $1.18
|
Net
loss as reported for the year ended June 30, 2005$
|
$
|
4,375,904
|
||
SFAS
No. 123 stock option expense
|
771,365
|
|||
Pro
forma net loss for the year ended June 30, 2005
|
$
|
5,147,269
|
Risk-free
interest rate
|
3.50
|
%
|
||
Expected
dividend yield
|
0.00
|
%
|
Year
ending June 30,
|
||
2006
|
$
5,400
|
|
2007
|
5,400
|
|
2008
|
5,400
|
|
2009
|
5,400
|
|
2010
|
2,700
|
Item 24.
|
Indemnification
of Directors and Officers
|
Item 25.
|
Other
Expenses of Issuance and Distribution
|
Securities
and Exchange Commission registration fee
|
$
|
3,445
|
||
Transfer
agent fees
|
$
|
2,000
|
||
Accounting
fees and expenses
|
$
|
5,000
|
||
Legal
fees and expenses
|
$
|
75,000
|
||
Blue
sky fees and expenses
|
$
|
10,000
|
||
|
||||
Total
|
$
|
95,445
|
Item 26.
|
Recent
Sales of Unregistered Securities
|
· |
In
April 2005, the Registrant sold an aggregate of 2,500,000 shares
(prior to
the Registrant's April 29, 2005 30:1 reverse stock split) for cash
proceeds of $85,000. These shares were sold to three purchasers
- Andrew
Ecclestone (1,470,000 shares), Gary Boster (882,000 shares) and
Philip and
Stephanie Rogers (148,000 shares) - in reliance on the exemption
from
registration provided by Section 4(2) of the Securities Act.
|
· |
On
December 3, 2003, the Registrant issued 787,100 pre-30:1 reverse
stock
split shares of restricted stock to Thomas Scallen, its former
CEO, as
compensation valued at $7,871, in reliance on the exemption from
registration provided by Section 4(2) of the Securities
Act.
|
· |
On
December 3, 2003, the Registrant issued 8,675,800 pre-30:1 reverse
stock
split shares of restricted stock to Mark Rosenberg in redemption
of two
notes payable of approximately $36,758, pursuant to the conversion
terms
of the two notes and in reliance on the exemption from registration
provided by Section 4(2) of the Securities
Act.
|
· |
On
June 23, 2003, the Registrant issued an aggregate 53,783,500 pre-30:1
reverse stock split shares of restricted common stock in redemption
of
various outstanding notes payable in the face amount of approximately
$300,000 and accrued interest payable of approximately $237,835,
pursuant
to the conversion terms of the respective notes and in reliance
on the
exemption from registration provided by Section 4(2) of the Securities
Act.
|
Item 27.
|
Exhibits.
|
Exhibit #
|
|
Description
|
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 incorporated by reference
to the
Form 10-KSB filed on October 11, 2005.
|
|
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.
|
|
4.9
|
Form
of Registration Right Agreement among IsoRay Medical, Inc., Meyers
Associates, L.P. and the other signatories thereto, dated October
15,
2004, filed herewith.
|
5.1
|
Opinion
of Keller Rohrback, P.L.C., filed herewith.
|
|
10.2
|
Universal
License Agreement, dated November 26, 1997 between Donald C.
Lawrence and
William J. Stokes of Pacific Management Associates Corporation,
filed
herewith.
|
|
10.3
|
Royalty
Agreement of Invention and Patent Application, dated July 12,
1999 between
Lane A. Bray and IsoRay LLC, filed herewith.
|
|
10.4
|
Tri-City
Industrial Development Council Promissory Note, dated July
22, 2002, to be
filed by amendment.
|
|
10.5
|
Section
510(k) Clearance from the Food and Drug Administration to market
Lawrence
CSERION Model CS-1, dated March 28, 2003, filed
herewith.
|
|
10.6
|
Battelle
Project No. 45836 dated June 20, 2003, to be filed by
amendment.
|
|
10.7
|
Applied
Process Engineering Laboratory Apel Tenant Lease Agreement,
dated November
17, 2003 between Energy Northwest and IsoRay, LLC, to be filed
by
amendment.
|
|
10.8
|
Work
for Others Agreement No. 45658, R2, dated April 27, 2004 between
Battelle
Memorial Institute, Pacific Northwest Division and IsoRay Products
LLC, to
be filed by amendment.
|
|
10.9
|
Development
Loan Agreement for $230,000, dated September 15, 2004 between
Benton-Franklin Economic Development District and IsoRay Medical,
Inc., to
be filed by amendment.
|
|
10.10
|
Registry
of Radioactive Sealed Sources and Devices Safety Evaluation
of Sealed
Source, dated September 17, 2004, to be filed by
amendment.
|
|
10.11
|
CRADA
PNNL/245, “Y-90 Process Testing for IsoRay”, dated December 22, 2004
between Pacific Northwest National Laboratory and IsoRay Medical
Inc., to
be filed by amendment.
|
|
10.12
|
Amendment
1 to CRADA PNNL/245, dated February 14, 2005, to be filed by
amendment.
|
|
10.13
|
Amendment
1 to Agreement 45658, dated February 23, 2005 between Battelle
Memorial
Institute Pacific Northwest Division and IsoRay Medical, Inc.,
to be filed
by amendment.
|
|
10.14
|
Equipment
Lease Agreement dated April 14, 2005 between IsoRay Medical,
Inc. and
Nationwide Funding, LLC, to be filed by amendment.
|
|
10.15
|
Lease
Agreement, Rev. 1, dated May 5, 2005 between Pacific EcoSolutions,
Inc.
and IsoRay Medical, Inc., to be filed by amendment.
|
|
10.16
|
Master
Lease Agreement Number 5209, dated May 7, 2005 between VenCore
Solutions
LLC and IsoRay Medical, Inc., to be filed by amendment.
|
|
10.17
|
Contract
#840/08624332/04031 dated August 25, 2005 between IsoRay, Inc.
and the
Federal State Unitary Enterprise << Institute of Nuclear Materials
>>, Russia, filed herewith.
|
|
10.18
|
State
of Washington Radioactive Materials License dated October 6,
2005, filed
herewith.
|
|
10.19
|
Girard
Employment Agreement, dated October 6, 2005 between Roger E.
Girard and
IsoRay, Inc., to be filed by amendment.
|
|
10.20
|
Express
Pricing Agreement Number 219889, dated October 5, 2005 between
FedEx and
IsoRay Medical, Inc., to be filed by
amendment.
|
10.21
|
Agreement
dated October 12, 2005 between the Curators of the University
of Missouri
and IsoRay Medical, Inc., to be filed by amendment.
|
|
10.22
|
Contract
Modification Quality Class G, dated October 25, 2005 to Contract
Number
X40224 between Energy Northwest and IsoRay, Inc., to be filed
by
amendment.
|
|
21.1
|
Subsidiaries
of the Registrant, incorporated by reference to the Form 10-KSB
filed on
October 11, 2005.
|
|
23.1
|
Consent
of Keller Rohrback, P.L.C. (included in Exhibit 5.1)
|
|
23.2
|
Consent
of S.W. Hatfield, CPA, filed herewith.
|
|
23.3
|
Consent
of DeCoria, Maichel & Teague, P.S., filed
herewith.
|
Item 28.
|
Undertakings.
|
ISORAY, INC. | ||
|
|
|
By: | /s/ Roger E. Girard | |
Roger
E. Girard, Chairman and Chief Executive Officer
|
||
Signature
|
Title
|
Date
|
||
/s/
Roger E. Girard
Roger
E. Girard
|
Chief
Executive Officer and Chairman
|
November
9, 2005
|
||
/s/
Michael K. Dunlop
Michael
K. Dunlop
|
Chief
Financial Officer and Principal Accounting Officer
|
November
9, 2005
|
||
/s/
Stephen R. Boatwright
Stephen
R. Boatwright
|
Director
|
November
9, 2005
|
||
/s/
Robert R. Kauffman
Robert
R. Kauffman
|
Director
|
November
9, 2005
|
||
/s/
Thomas C. Lavoy
Thomas
C. LaVoy
|
Director
|
November
9, 2005
|
||
/s/
David J. Swanberg
David
J. Swanberg
|
Director
|
November
9, 2005
|
Address:
45
Broadway Avenue, 2
nd
Floor
New
York, NY 10006
|
Address:
350
Hills Street,
Suite
106
Richland,
WA 99354
|
Very truly yours, | ||
KELLER ROHRBACK, PLC | ||
/s/
Keller Rohrback, PLC
|
1. |
Parties,
Terms, and Summary
:
|
Summary: Royalty Rate (%): 2% |
%
x
Est. 1
st
Yr’s Sales (units):
5,000
x
|
Estimated Unit Price $20.00 = |
Resulting
Licensing Fee
$2,000.00
|
Type of License: x Exclusive |
o
Nonexclusive
|
Patent Application Ser. Nr.: N/A |
Filing
Date: In Process
|
x Option Granted: Premium: $200 |
For
Term of (months):
18
|
2. |
EffectiveDate
:
This Agreement shall be effective as of the latter of the signature
dates
below written and shall be referred to as the Agreement of such
date.
|
3. |
Recitals
:
|
A. |
LICENSOR
has
developed an invention having the above title and warrants that
LICENSOR
has filed a patent application on such invention in the U.S. Patent
and
Trademark Office, which patent application is identified by the
above
title, Serial Number, and Filing Date. LICENSOR warrants that LICENSOR
has
full and exclusive right to grant this license on this invention
and
LICENSOR’S patent application. If the “Know-How Licensed” box above is
checked, LICENSOR has also developed know-how in connection with
said
invention and warrants that LICENSOR owns and has the right to
license
said know-how.
|
B.
|
LICENSEE
desires,
if the “Option Granted” box above is checked, to exclusively investigate
LICENSOR’S above invention for the term indicated. If said “Option
Granted” box is not checked, or if said box is checked and LICENSEE
investigates LICENSOR’S invention for the term indicated and such
investigation is favorable, LICENSEE desires to make, use and sell
the
products embodying such invention and covered by the claims of
LICENSOR’S
patent application and any patent(s) issuing thereon (hereinafter
“Licensed Product”).
|
4. |
If
Option Granted:
If
the “Option Granted” box above is checked, then (A) the patent license
grant of Part 5 below shall not take effect except as defined in
this
part, and (B) LICENSOR hereby grants LICENSEE, for the option premium
stated above, an exclusive option to investigate LICENSOR’S invention for
the term indicated above, such term to commence from the date of
this
Agreement. LICENSOR will furnish LICENSEE with all information
and
know-how (if any) concerning LICENSOR’S invention in LICENSOR’S
possession. LICENSEE will investigate LICENSOR’S invention for
operability, costing, marketing, etc. LICENSEE shall report the
results of
its investigation to LICENSOR at any time before the end of the
option
term. If LICENSEE’S determination is favorable, it may thereupon exercise
this option and the patent license grant of Part 5 below shall
become
effective. If LICENSEE’S determination is unfavorable, then said option
shall not be exercised and no patent license grant shall take effect
and
all rights hereunder shall revert to LICENSOR and LICENSEE shall
deliver
to LICENSOR all results of its investigations for LICENSOR’S benefit.
|
5. |
Patent
License if Option Exercised or if Option Not Granted:
If
the “Option Granted” box above is checked and LICENSEE has investigated
LICENSOR’S invention and such investigation is favorable and LICENSEE has
exercised its option, or if said box is not checked, then LICENSOR
hereby
grants to LICENSEE, subject to the terms and conditions herein,
a patent
license of the type (Exclusive or Nonexclusive) checked above.
Such patent
license shall include the right to grant sublicenses, to make,
have made,
use, and sell the Licensed Product throughout the United States,
its
territories, and possessions. Such patent license shall be under
LICENSOR’S patent application, any continuations, divisions,
continuations-in-part, substitutes, reissues of any patent from
any of
such applications (hereinafter and hereinbefore LICENSOR’S patent
application), any patent(s) issuing thereon, and if the “Know-How
Licensed” box is checked above,
any
know-how transferred to LICENSEE
.
|
6. |
If
Know-How Licensed
:
If the “Know-How” box above is checked, LICENSOR shall communicate to
LICENSEE all of LICENSOR’S know-how in respect of LICENSOR’S invention
within one month after the date of this Agreement and shall be
available
to consult with LICENSEE, for up to 80 hours, with respect to the
licensed
invention and know-how. All travel and other expenses of LICENSOR
for such
consultation shall be reimbursed by LICENSEE within one month after
LICENSOR
submits its voucher therefor
.
LICENSOR makes no warranty regarding the value, suitability, or
workability of such know-how. The royalty applicable for such know-how
shall be paid,
at
the rate indicated above, for a minimum of three years from the
date of
this Agreement if no option is granted
,
N/A
or
for
three years from the date of exercise if an option is granted and
exercised by LICENSOR
,
and thereafter for so long as LICENSEE makes, uses, or sells Licensed
Products and has a share in the United States for or at least 15%
of the
competitive market for Licensed Products.
A
pplicable
|
7.
|
Royalties
:
|
A. |
Licensing
Fee
:
Unless the “Option Granted” box above is checked, LICENSEE shall pay to
LICENSOR, upon execution of this Agreement, a nonrefundable Licensing
Fee.
This Licensing Fee shall also serve as an advance against future
royalties. Such Licensing Fee shall be computed as follows: (A)
Take the
Running Royal Rate in percent, as stated above. (B) Multiply by
LICENSEE’S
Estimate of its First Year’s Sales, in units of Licensed Product, as
stated above. (C) Multiply by LICENSEE’S Estimated Unit Price of Licensed
Product, in dollars, as stated above. (D) The combined product
shall be
the Resultant Licensing Fee, in dollars, as stated above. When
LICENSEE
begins actual sales of the Licensed Product, it shall certify its
Actual
Net Factory Sales Price of Licensed Product to LICENSOR in writing
and
shall either (1) simultaneously pay LICENSOR any difference due
if the
Actual Net Factory Sales Price of Licensed Product is more than
the
Estimated Unit Price, stated above, or (2) advise LICENSOR of any
credit
to which LICENSEE is entitled if the Actual Net Factory Sales Price
of
Licensed Product is less than the above Estimated Unit Price. In
the
latter case, LICENSEE may deduct such credit from its first royalty
remittance to LICENSOR, under subpart B below. If an option is
granted and
exercised under Part 4 above, then Licensee shall pay this Resultant
Licensing Fee to LICENSOR if and when LICENSEE exercises its option.
|
B. |
Running
Royalty:
If
the “Option Granted” box above is not checked, or is said box is checked
and LICENSEE has exercised its option under Part 4, LICENSEE shall
also
pay to LICENSOR a Running Royalty at the rate stated above. Such
royalty
shall be at the Patent Royalty Rate stated in Part 1 above, plus,
if the
“Know-How Licensed” box above is checked, a Know-How Royalty at the
Know-How Royalty Rate stated above. Said Running Royalty shall
be computed
on LICENSEE’S Net Factory Sales Price of Licensed Product. Such Running
Royalty shall accrue when the Licensed Products are first sold
or disposed
of by LICENSEE, or by any sublicensee of LICENSEE. LICENSEE shall
pay the
Running Royalty due to LICENSOR within one month after the end
of each
calendar quarter, together with a written report to LICENSOR of
the number
of units, respective sales prices, and total sales made in such
quarter,
together with a full itemization of any adjustments made pursuant
to
subpart F below. LICENSEE’S first report and payment shall be made within
one month after the end of the first calendar quarter following
the
execution of this Agreement. No royalties shall be paid by LICENSEE
to
LICENSOR until after the Licensing Fee under subpart A above has
been
earned, but LICENSEE shall make a quarterly report hereunder for
every
calendar quarter after the execution hereof, whether or not any
royalty
payment is due for such quarter, except that if an option is granted,
LICENSEE shall not make any royalty reports until and if LICENSEE
exercises its option.
|
C. |
Minimum
Annual Royalties:
If
the “Exclusive” box above is checked, so that this is an exclusive
license, then this subpart C and subpart D shall be applicable.
But if the
“Nonexclusive” box is checked above, then these subparts C and D shall be
inapplicable. There shall be no minimum annual royalties due under
this
Agreement until the “Year Commencing,” as identified in Part 1 above. For
the exclusivity privilege of the patent license grant under Part
5 above,
a minimum annual royalty shall be due beginning with such royalty
year and
for each royalty year ending on the anniversary of such royalty
year
thereafter. Such minimum annual royalty shall be equal to the royalty
which would have been due if the “Minimum Number of Units (of Licensed
Product) to Be Sold to Compute Minimum Annual Royalty” identified in Part
1 above were sold during such royalty year. If less than such number
of
units of Licensed Product are sold in any royalty year, then the
royalty
payable for the fourth quarter of such year shall be increased
so as to
cause the royalty payments for such year to equal said minimum
annual
royalty. If an option is granted under Parts 1 and 4,
Exercised
May 1999.
then no minimum annual royalties shall be due in any case until
and if
LICENSEE exercises its option.
If
the U.S. Food & Drug Administration requires human trials before
allowing this concept to be implemented into general practice,
Running
Royalty shall not apply until FDA approve the product of this License
Agreement.
WJS
|
D. |
*
If
Minimum Not Paid
:
If this part is applicable and if sales of Licensed Product in
any royalty
year do not equal or exceed the minimum number of units identified
in Part
1 above, LICENSEE may choose not to pay the minimum annual royalty
under
subpart C above. In this case, LICENSEE shall so notify LICENSOR
by the
date on which the last royalty for such year is due, i.e., within
one
month after any anniversary of the date identified in Part 1 above.
Thereupon the license grant under Part 4 above shall be converted
to a
nonexclusive grant, and LICENSOR may immediately license others
under the
above patent.
|
E. |
Most
Favored Licensee
:
If this License is nonexclusive, or if it becomes nonexclusive
under
subpart D above, then (a) LICENSOR shall not grant any other license
under
the above patent to any other party under any terms which are more
favorable than those which LICENSEE pays or enjoys under this Agreement,
and (b) LICENSOR shall promptly advise LICENSEE of any such other
grant
and the terms thereof.
|
F. |
When
No Royalties Due
:
No Patent Royalties shall be due under this Agreement after the
above
patent expires or if it is declared invalid by a court of competent
jurisdiction from which no appeal can be taken.
*
Also,
if LICENSOR’S patent application becomes finally abandoned without any
patent issuing, then the Patent Royalty under this Agreement shall
be
terminated as of the date of abandonment. Any Know-How Royalties
under
Part 6 above shall continue after any Patent Royalties terminate,
provided
such Know-How Royalties are otherwise due under such Part
6
.
|
G. |
Late
Payments
:
If any payment due under this Agreement is not timely paid, then
the
unpaid balance shall bear interest until paid at an annual rate
of 10%
until the delinquent balance is paid. Such interest shall be compounded
monthly.
|
H. |
Net
Factory Sales Price
:
“Net Factory Sales Price” is defined as the gross factory selling price of
Licensed Product, or the U.S. importer’s gross selling price if Licensed
Product is made abroad, less usual trade discounts actually allowed,
but
not including advertising allowances or fees or commissions paid
to
employees or agents of LICENSEE. The Net Factory Sales Price shall
not
include (1) packing costs, if itemized separately, (2) import and
export
taxes, excise and other sales taxes, and custom duties, and (3)
costs of
insurance and transportation, if separately billed, from the place
of
manufacture if in the U.S., or from the place of importation if
manufactured abroad, to the customer’s premises or next point of
distribution or sale. Bona fide returns may be deducted from units
shipped
in computing the royalty payable after such returns are made.
|
8.
|
Records
:
LICENSEE and any of its sublicensees shall keep full, clear, and
accurate
records with respect to sales subject to royalty under this Agreement.
The
records shall be made in a manner such that the royalty reports
made
pursuant to Part 7B can be verified. LICENSOR, or its authorized
agent,
shall have the right to examine and audit such records upon reasonable
notice during normal business hours, but not more than twice per
year. In
case of any dispute as to the sufficiency or accuracy of such records.
LICENSOR may have any independent auditor examine and certify such
records. LICENSEE shall make prompt adjustment to compensate for
any
errors or omissions disclosed by any such examination and certification
of
LICENSEE’S records. If LICENSOR does not examine LICENSEE’S records or
question any royalty report within two years from the date thereof,
then
such report shall be considered final and LICENSOR shall have no
further
right to contest such report.
|
9. |
Sublicensees
:
If LICENSEE grants any sublicenses hereunder, it shall notify LICENSOR
within one month from any such grant and shall provide LICENSOR
with a
true copy of any sublicense agreement. Any sublicensee of LICENSEE
under
this Agreement shall be bound by all of the terms applying to LICENSEE
hereunder and LICENSEE shall be responsible for the obligations
and duties
of any of its sublicensees.
|
10. |
Patent
Prosecution
:
|
A. |
Domestic:
LICENSOR
shall, at LICENSOR’S own expense, prosecute its above U.S. patent
application, and any continuations, divisions, continuations in-part,
substitutes, and reissues of such patent application or any patent
thereon, at its own expense, until all applicable patents issue
or any
patent application becomes finally abandoned. LICENSOR shall also
pay any
maintenance fees which are due on any patent(s) which issue on
said patent
application. If for any reason LICENSOR intends to abandon any
patent
application hereunder, it shall notify LICENSEE at least two months
in
advance of any such abandonment so as to give LICENSEE the opportunity
to
take over prosecution of any such application and maintenance of
any
patent. If LICENSEE takes over prosecution, LICENSOR shall cooperate
with
LICENSEE in any manner LICENSEE requires, at LICENSEE’S expense.
|
B. |
Foreign:
LICENSOR shall have the opportunity, but not the obligation, to
file
corresponding foreign patent applications to any patent application
under
subpart A above. If LICENSOR files any such foreign patent applications,
LICENSOR may license, sell, or otherwise exploit the invention,
Licensed
Product, or any such foreign application in any countries foreign
to the
United States as it chooses, provided that LICENSOR must give LICENSEE
a
right of first refusal and at least one month to exercise this
right
before undertaking any such foreign exploitation. If LICENSOR chooses
not
to file any corresponding foreign applications under this part,
it shall
notify LICENSEE at least one month prior to the first anniversary
of the
above patent application so as to give LICENSEE the opportunity
to file
corresponding foreign patent applications if it so chooses.
|
C.
|
If
Licensee Acts:
If
LICENSEE takes over prosecution of any U.S. patent application
under
subpart A above, and LICENSEE is successful so that a patent issues,
then
LICENSEE shall pay LICENSOR royalties thereafter at a rate of 75%
of the
royalty rate and any applicable minimum under Part 7C above and
LICENSEE
shall be entitled to deduct prosecution and maintenance expenses
from its
royalty payments. If LICENSEE elects to prosecute any foreign patent
applications under subpart B above, then LICENSEE shall pay LICENSOR
royalties of 50% of the royalty rate under Part 7 above for any
applicable
foreign sales, less all foreign prosecution and maintenance expenses
incurred by LICENSEE.
|
11. |
Marking:
LICENSEE
shall mark all units of Licensed Product, or its container if direct
marking is not leasible, with the legend “Patent Pending” until any
patent(s) issue from the above patent application. When any patent(s)
issue, LICENSOR shall promptly notify LICENSEE and thereafter LICENSEE
shall mark all units of Licensed Product which it sells with proper
notice
of patent marking under 35 U.S.C. Section 287.
|
12. |
If
Infringement Occurs
:
If either party discovers that the above patent is infringed, it
shall
communicate the details to the other party. LICENSOR shall thereupon
have
the right, but not the obligation, to take whatever action it deems
necessary, including the filing of lawsuits, to protect the rights
of the
parties to this Agreement and to terminate such infringement. LICENSEE
shall cooperate with LICENSOR if LICENSOR takes any such action,
but all
expenses of LICENSOR shall be borne by LICENSOR. If LICENSOR recovers
any
damages or compensation for any action it takes hereunder, LICENSOR
shall
retain 100% of such damages. If LICENSOR does not wish to take
any action
hereunder, LICENSEE shall also have the right, but not the obligation,
to
take any such action, in which case LICENSOR shall cooperate with
LICENSEE, but all of LICENSEE’S expenses shall be borne by LICENSEE.
LICENSEE shall receive 75% of any damages or compensation it recovers
for
any such infringement and shall pay 25% of such damages or compensation
to
LICENSOR, after deducting its costs, including attorney fees.
|
13. |
Disclaimer
and Hold Harmless
:
|
A. |
Disclaimer
of Warranty
:
Nothing herein shall be construed as a warranty or representation
by
LICENSOR as to the scope or validity of the above patent application
or
any patent issuing thereon.
|
B. |
Product
Liability
:
LICENSEE shall hold LICENSOR harmless from any product liability
actions
involving Licensed Product.
|
14. |
Term:
The term of this Agreement shall end with the expiration of the
last of
any patent(s) which issues on LICENSOR’S patent application, unless
terminated sooner for any reason provided herein, or unless know-how
is
licensed, in which case the terms of Part 6 shall cover the term
of this
Agreement.
|
15.
|
Termination
:
This Agreement may be terminated under and according to any of
the
following contingencies:
|
A. |
Default:
If
LICENSEE fails to make any payment on the date such payment is
due under
this Agreement, or if LICENSEE makes any other default under or
breach of
this Agreement, LICENSOR shall have the right to terminate this
Agreement
upon giving three months’ written Notice of Intent to Terminate,
specifying such failure, breach, or default to LICENSEE. If LICENSEE
fails
to make any payment in arrears, or otherwise fails to cure the
breach or
default within such three-month period, then LICENSOR may then
send a
written Notice of Termination to LICENSEE, whereupon this Agreement
shall
terminate in one month from the date of such Notice of Termination.
If
this Agreement is terminated hereunder, LICENSEE shall not be relieved
of
any of its obligations to the date of termination and LICENSOR
may act to
enforce LICENSEE’S obligations after any such termination.
|
B. |
Bankruptcy,
Etc.
If
LICENSEE shall go into receivership, bankruptcy, or insolvency,
or make an
assignment for the benefit of creditors, or go out of business,
this
Agreement shall be immediately terminable by LICENSOR by written
notice,
but without prejudice to any rights of LICENSOR hereunder.
|
C. |
Antishelving:
If
LICENSEE discontinues its sales or manufacture of Licensed Product
without
intent to resume, it shall so notify LICENSOR within one month
of such
discontinuance whereupon LICENSOR shall have the right to terminate
this
agreement upon one months’ written notice, even if this Agreement has been
converted to a nonexclusive grant under Part 7D above. If LICENSEE
does
not begin manufacture or sales of Licensed Product within one and
one-half
years from the date of this Agreement or the date of its option
exercise
if an option is granted, or, after commencing manufacture and sales
of
Licensed Product, discontinues its manufacturer and sales of Licensed
Product for one and one-half years, LICENSOR shall have the right
to
terminate this Agreement upon one months’ written notice, unless LICENSEE
can show that it in good faith intends and is actually working
to resume
or begin manufacture or sales, and has a reasonable basis to justify
its
delay. In such case LICENSEE shall advise LICENSOR in writing,
before the
end of such one-and one-half year period, of the circumstances
involved
and LICENSEE shall thereupon have up to an additional year to resume
or
begin manufacture or sales. It is the intent of the parties hereto
that
LICENSOR shall not be deprived of the opportunity, for an unreasonable
length of time, to exclusively license its patent if LICENSEE has
discontinued or has not commenced manufacture or sales of Licensed
Product. In no case shall LICENSOR have the right to terminate
this
Agreement if and so long as LICENSEE is paying LICENSOR minimum
annual
royalties under Part 7C above.
|
16. |
Notices:
All
notices, payments, or statements under this Agreement shall be
in writing
and shall be sent by first-class certified mail, return receipt
requested,
postage prepaid to the party concerned at the above address, or
to any
substituted address given by notice hereunder. Any such notice,
payment,
or statement shall be considered sent or made on the day deposited
in the
mails. Payments and statements may be sent by ordinary mail.
|
17.
|
Mediation
and Arbitration:
If
any dispute arises under this Agreement, the parties shall negotiate
in
good faith to settle such dispute. If the parties cannot resolve
such
dispute themselves, then either party may submit the dispute to
mediation
by a mediator approved by both parties. The parties shall both
cooperate
with the mediator. If the parties cannot agree to any mediator,
or if
either party does not wish to abide by any decision of the mediator,
then
they shall submit the dispute to arbitration by any mutually acceptable
arbitrator. If no arbitrator is mutually acceptable, then they
shall
submit the matter to arbitration under the rules of the American
Arbitration Associate (AAA). Under any arbitration, both parties
shall
cooperate with and agree to abide finally by any decision of the
arbitration proceeding. If the AAA is selected, the arbitration
shall take
place under the auspices of the nearest branch of the AAA to the
other
party. The costs of the arbitration proceeding shall be borne according
to
the decision of the arbitrator, who may apportion costs equally,
or in
accordance with any finding of fault of lack of good faith of either
party. The arbitrator’s award shall be non-appealable and enforceable in
any court of competent jurisdiction.
|
18. |
Assignment.
The rights of LICENSOR under this Agreement shall be assignable
or
otherwise transferable, in whole or in part, by LICENSOR and shall
vest
LICENSOR’S assigns or transferees with the same rights and obligations as
were held by LICENSOR. This Agreement shall be assignable by LICENSEE
to
any entity that succeeds to the business of LICENSEE to which Licensed
Products relate or to any other entity if LICENSOR’S permission is first
obtained in writing.
|
19. |
Jurisdiction
and Venue:
This Agreement shall be interpreted under the laws of LICENSOR’S state, as
given in Part 1 above. Any action related to this Agreement shall
be
brought in the county of LICENSOR’S above address; LICENSEE hereby
consents to such venue.
|
20. |
Non-
Frustration:
Neither party to this Agreement shall commit any act or take any
action
which frustrates or hampers the rights of the other party under
this
Agreement. Each party shall act in good faith and engage in fair
dealing
when taking any action under or related to this Agreement.
|
21. |
Rectification:
In
case of any mistake in this Agreement, including any error, ambiguity,
illegality, contradiction, or omission, this Agreement shall be
interpreted as if such mistake were rectified in a manner which
implements
the intent of the parties as nearly as possible and effects substantial
fairness, considering all pertinent circumstances.
|
22. |
Entire
Agreement:
This Agreement sets forth the entire understanding between the
parties and
supersedes any prior or contemporaneous oral understandings and
any prior
written agreements.
|
23. |
Signatures:
The parties, having carefully read this Agreement and having consulted
or
have been given an opportunity to consult counsel, have indicated
their
agreement to all of the above terms by signing this Agreement on
the
respective dates below indicated. LICENSEE and LICENSOR have each
received
a copy of this Agreement with both LICENSEE’S and LICENSOR’S original ink
signatures thereon.
|
Licensor:
/s/ Donald C. Lawrence
|
Date:
10/31/97
|
Licensee:
/s/
William J. Stokes
|
Date:
11/26/97
|
(A)
|
ASSIGNOR’S
right, title and interest in and to the invention entitled “METHOD OF
SEPARATION OF CESIUM-131 FROM BARIUM” invented by ASSIGNOR;
|
(B)
|
the
application for United States patent therefor, signed by ASSIGNOR
on
04/28/99, U.S. Patent and Trademark Office Application Number 09/301,640,
filed 04/28/99;
|
(C) |
any
patent or reissues of any patent that may be granted thereon; and
|
(D)
|
any
applications which are continuations, continuations-in-part, substitutes,
or divisions of said application. ASSIGNOR authorizes ASSIGNEE
to enter
the date of signature and/or Serial Number and Filing Date in the
spaces
above. ASSIGNOR also authorizes and requests the Assistant Commissioner
for Patents to issue any resulting patent(s) as follows: 0% to
ASSIGNOR
and 100% to ASSIGNEE.
|
(A)
|
IsoRay,
LLC shall pay all attorneys’ fees and filing fees associated with said
patent.
|
(B)
|
Seed
Royalty: IsoRay, LLC shall pay a royalty of 1% of Gross Profit
of seed
wherein the process described in aforesaid patent is used, in whole
or in
part. Gross Profit per seed shall be calculated as Gross Seed Sales
Price
minus Direct Production Cost which includes seed material cost,
direct
production processing including irradiation charges, and direct
production
labor cost per seed. All indirect costs including marketing/sales
costs
shall be excluded from Gross Profit.
|
(C)
|
Non-Seed
Product Royalty: IsoRay, LLC shall pay a royalty of 1% of Gross
Profit for
use of said process, in whole or in part, for production of any
non-seed
product. Gross Profit for use of said process shall be calculated
as Gross
Product Unit Sales Price minus Direct Production Cost which includes
direct material cost, direct production processing including irradiation
charges, and direct production labor cost per unit of production.
All
indirect costs including marketing/sales costs shall be excluded
from
Gross Profit.
|
(D)
|
Sub-assignment
Royalty: IsoRay, LLC shall pay a royalty of 2% of Gross Sales for
sub-assignment of the aforesaid patented process by IsoRay LLC
to any
SUB-ASSIGNEE(S). Gross Sales shall be Assignee’s net invoiced price to
Sub-assignee (Gross invoice price less taxes, discounts, or credits).
|
(E)
|
Royalty
shall be payable to LANE A. AND GWEN M. BRAY TRUST within 30 days
after
the end of each calendar quarter in which invoiced payments for
sales of
said seeds, non seed products, or subassignments were made.
|
(A)
|
DOMESTIC
.
Assignee shall, at ASSIGNEE’S expense, prosecute it above U.S. patent
application assignment, and any continuations, division,
continuations-in-part, substitutes, and reissues of such patent
application or any patent thereon until all applicable patents
issue or
any patent application becomes finally abandoned. ASSIGNEE shall
also pay
any maintenance fees which are due on any patent(s) which issue
on said
patent application. If for any reason, ASSIGNEE intends to abandon
any
patent application, hereunder, it shall notify ASSIGNOR at least
two
months in advance of any such abandonment so as to give ASSIGNOR
the
opportunity to take over prosecution of any such application and
maintenance of any patent. If ASSIGNOR takes over prosecution,
ASSIGNEE
shall cooperate with ASSIGNOR in any manner ASSIGNOR requires at
ASSIGNOR’S expense.
|
(B)
|
FOREIGN
.
ASSIGNEE shall have the opportunity, but not the obligation, to
file
corresponding foreign patent applications to the aforesaid patent.
If
ASSIGNEE files any such foreign patent applications, ASSIGNEE may
license,
sell, or otherwise exploit the invention and pay royalties in accordance
with the aforesaid terms.
|
(C)
|
INFRINGEMENT
.
If either party discovers that the above patent is infringed, it
shall
communicate the details to the other party. ASSIGNEE shall thereupon
have
the right, but not the obligation, to take whatever action it deems
necessary, including the filing of lawsuits, to protect the rights
of the
parties to this Agreement and to terminate such infringement. ASSIGNOR
shall cooperate with ASSIGNEE if ASSIGNEE takes any such action,
but all
expenses of ASSIGNOR shall be borne by ASSIGNEE. If ASSIGNEE recovers
any
damages or compensation for any action hereunder, ASSIGNEE shall
retain
100% of such damages. If ASSIGNEE does not wish to take any action
hereunder, ASSIGNOR shall also have the right, but not the obligation,
to
take any such action, in which case ASSIGNEE shall cooperate with
ASSIGNOR, but all of ASSIGNOR’S expenses shall be borne by ASSIGNOR.
ASSIGNOR shall receive 100% of any damages or compensation awarded.
|
(A)
|
DEFAULT
.
If ASSIGNEE fails to make any payment on the date such payment
is due
under this Agreement, or if ASSIGNEE makes any other default under
or
breach of this Agreement, ASSIGNOR shall have the right to terminate
this
Agreement upon giving three month’s written Notice of Intent to Terminate,
specifying such failure, breach, or default to ASSIGNEE. If ASSIGNEE
fails
to make any payment in arrears, or otherwise fails to cure the
breach or
default within such three-month period, then ASSIGNOR may then
send a
written Notice of Termination to ASSIGNEE, whereupon this Agreement
shall
terminate in one month from the date of such Notice of Termination.
If
this Agreement is terminated hereunder, ASSIGNEE shall not be relieved
of
any of its obligations to the date of termination and ASSIGNOR
may act to
enforce ASSIGNEE’S obligations after any such termination.
|
(B)
|
BANKRUPTCY
,
etc. If ASSIGNEE shall go into receivership, bankruptcy, or insolvency,
or
make an assignment for the benefit of creditors, or go out of business,
this Agreement shall be immediately terminable by ASSIGNOR by written
notice, but without prejudice to any rights of ASSIGNOR hereunder.
|
(C)
|
ANTISHELVING
.
If ASSIGNEE discontinues its sales or manufacture of product(s)
using the
invention, without intent to resume, it shall so notify ASSIGNOR
within
one month of such discontinuance, whereupon ASSIGNOR shall have
the right
to terminate this Agreement upon one month’s written notice. If ASSIGNEE
does not begin manufacture or sales of said product(s) within one
and
one-half years from the date of this Agreement or, after commencing
manufacture and sales of product(s), discontinues its manufacture
and
sales of product(s) for one and one-half years, ASSIGNOR shall
have the
right to terminate this Agreement upon one month’s written notice, unless
ASSIGNEE can show that it in good faith intends and is actually
working to
resume or begin manufacture or sales, and has a reasonable basis
to
justify its delay. In such case ASSIGNEE shall advise ASSIGNOR
in writing,
before the end of such one-and-one-half year period, of the circumstances
involved and ASSIGNEE shall thereupon have up to an additional
year to
resume or begin manufacture or sales. It is the intent of the parties
hereto that ASSIGNOR shall not be deprived of the opportunity,
for an
unreasonable length of time, to exclusively license its patent
if ASSIGNEE
has discontinued or has not commenced manufacture or sales of said
product(s). In no case shall ASSIGNOR have the right to terminate
this
Agreement if and so long as ASSIGNEE is paying ASSIGNOR royalties
under
Part 1 above.
|
(D)
|
If
a patent is not issued by the U.S. Patents and Trademarks Office
pursuant
to this License Application, this Agreement shall be null and void.
|
(A)
|
DISCLAIMER
OF WARRANTY
.
Nothing herein shall be construed as a warranty of representation
by
ASSIGNOR as to the scope or validity of the above patent application
or
any patent issuing thereon.
|
(B)
|
PRODUCT
LIABILITY
.
ASSIGNEE shall hold ASSIGNOR harmless from any product liability
actions
involving product using the invention.
|
ASSIGNOR:
/s/
Lane A. Bray
Lane
A. Bray
|
Date: July 12, 1999 |
ASSIGNEE:
/s/
James L. Madsen
James
L. Madsen
General
Manager
IsoRay
LLC
|
Date: 07/12/99 |
DEPARTMENT OF HEALTH & HUMAN SERVICES |
Public
Health
Service
|
Food
and Drug Adminstration
9200
Corporate Boulevard
Rockville
MD 20850
|
Mr. David J. Swanberg
Chief Operations Officer IsoRay, Inc. 350 Hills Street, Suite 106 RICHLAND WA 99352 |
Re:
K030162
Trade/Device
Name: Lawrence CSERION
Model
CS-1
Regulation
Number: 21 CFR 892.5730
Regulation
Name: Radionuclide
brachytherapy
source
Regulatory
Class: II
Product
Code: 90 KXK
Dated:
January 13, 2003
Received:
January 16,
2003
|
8xx.1xxx
876.2xxx, 3xxx, 4xxx, 5xxx
884.2xxx, 3xxx, 4xxx, 5xxx, 6xxx
892.2xxx, 3xxx, 4xxx, 5xxx
Other
|
(301)
594-4591
(301) 594-4616
(301) 594-4616
(301)
594-4654
(301)
594-4692
|
Sincerely yours, | ||
/s/ Nancy C. Brogdon
Director, Division of Reproductive,
Abdominal and Radiological Devices
Office of Device Evaluation
Center for Devices and Radiological
Health
|
1. |
SUBJECT
.
|
2. |
PURCHASE
PRICE AND CONTRACT VALUE.
|
3. |
DELIVERY
DATES AND ARRANGEMENTS.
|
·
|
Contract
number;
|
·
|
Goods
purchase date,
|
·
|
Amount
of Goods for the date of purchase, and the quality requirements
for the
date of delivery,
|
·
|
The
Goods delivery date to the designated airport,
|
·
|
The
designated airport,
|
·
|
Other
additional information required by the Buyer.
|
4. |
QUALITY
AND QUANTITY OF THE GOODS.
|
5.
|
SPECIFIC
CONDITIONS.
|
·
|
The
Buyer transfers the above mentioned technology to the
Seller;
|
·
|
The
amount of the purchase order is no less than two thousand (2000)
Ci per
year starting from the year 2007;
|
·
|
If
the Buyer does not begin marketing Cs-131 medical product in
Russia within
four years from the date of this Contract the Seller shall have
the right
to sell CS-131 in Russia produced with the application of technology
which
is different from the Buyer’s
technology.
|
6.
|
PACKING
AND LABELLING
.
|
7. |
PAYMENT
TERMS.
|
8. |
DELIVERY
AND ACCEPTANCE
.
|
9. |
INSURANCE
.
|
10. |
CLAIMS.
|
·
|
the
number and the date of the Contract, Purchase order, AWB,
Packing list and
the Certificate of
Compliance.
|
·
|
an
information on integrity of the transport package and overpack;
|
·
|
the
place, date and time of the examination by experts, the name
of the
material and a quantity of the sampling,
|
·
|
the
investigation method applied,
|
·
|
the
name and address of competent independent expert(s) a description
of an
examination procedure in writing shall include the following:
|
·
|
true
numerical and/or graphic data;
|
·
|
the
Buyer’s judgment on the Seller and the Forwarder responsibilities
for
noncompliance of the quality and/or quantity of the
Goods delivered;
|
·
|
the
cost calculation of a missing quantity and suggested
options of
compensations.
|
11. |
RESPONSIBILITIES
OF THE PARTIES
|
12. |
FORCE
MAJEURE.
|
13. |
ARBITRATION.
|
14. |
OTHER
CONDITIONS.
|
15. |
LEGAL
ADDRESSES OF THE PARTIES
.
|
Element
|
Maximum
concentration
(ppm)
|
Element
|
Maximum
concentration
(ppm)
|
Ag
|
1
|
Na
|
1
|
Al
|
1
|
Ni
|
5
|
As
|
100
|
P
|
300
|
Au
|
2
|
PB
|
2
|
B
|
2
|
Rb
|
100
|
Bi
|
1
|
Sb
|
20
|
Ca
|
1
|
Si
|
7
|
Cd
|
1
|
Sn
|
2
|
Co
|
1
|
Sr
|
10
|
Cr
|
3
|
Te
|
30
|
Cs
|
100
|
Ti
|
10
|
Cu
|
1
|
Tl
|
3
|
Fu
|
1
|
V
|
3
|
Mg
|
1
|
W
|
100
|
Mn
|
1
|
Zn
|
100
|
Mo
|
3
|
Zr
|
30
|
Note:
Cs-131/Cs-132 = 0.001
|
1.
Licensee Name:
ISORAY
|
3.
License Number:
WN-L0213-1
AMENDMENT
NO. 5
(AMENDMENT
IN ENTIRETY)
|
2.
Address:
350
Hills Street Suite 106
Richland
Washington
99354
|
Expiration
Date:
31
July 2009
__________________________________
5.
Reference Number(s):
04-04-66;
04-07-27; 04-07-39; 04-08-37; 04-08-62; 05-02-44; 05-04-42; 05-04-45;
05-05-42; 05-05-33; 05-05-55; 05-05-62; 05-05-63; 05-07-01; 05-07-15;
05-05-55; 05-08-73;
05-09-46;
05-09-47; 05-09-56; 05-10-01.
Fee
Code 5, Large Manufacturer
|
6.
Radioactive
Material
(element and mass number).
|
7.
Chemical
and/or Physical
Form.
|
8.
Maximum
quantity licensee may possess
at
any one time.
|
A.
Cesium
131.
|
A.
Any.
|
A.
740
gigabecquerels
(20
curies)
|
Annual
Possession Quantity
not
to exceed
37.37
terabecquerels
(1010.12
curies).*
|
||
B.
Radioactive
material,
atomic
numbers 3 to
83,
inclusive.
|
B.
Any.
|
B.
Total
activity of material not to
exceed
740
megabecquerels
(20
millicuries).
|
Total
Annual Possession Quantity
not
to exceed
2.05
gigabecquerels
(55.4
millicuries).*
|
||
C.
Barium
131.
|
C.
Liquid
and/or solid.
|
C.
2.22
terabecquerels
(60
curies).
|
Annual
Possession Quantity
not
to exceed
37
terabecquerels
(1000
curies).*
|
D.
Barium
133.
|
D.
Liquid
and/or solid.
|
D.
185
gigabecquerels
(5
curies).
|
Annual Possession
Quantity
not
to exceed
185
gigabecquerels
(5
curies).*
|
||
E.
Barium
133m.
|
E.
Liquid
and/or solid.
|
E.
37
gigabecquerels
(1
curie).
|
Annual
Possession Quantity
not
to exceed
1.85
terabecquerels
(50
curies).*
|
||
F.
Barium
135m.
|
F.
Liquid
and/or solid.
|
F.
185
gigabecquerels
(5
curies).
|
Annual
Possession Quantity
not
to exceed
9.25
terabecquerels
(250
curies).*
|
||
G.
Barium
140.
|
G.
Liquid
and/or solid.
|
G.
185
megabecquerels
(5
millicuries).
|
Annual
Possession Quantity
not
to exceed
7.4
gigabecquerels
(200
millicuries).*
|
||
H.
Cesium
132.
|
H.
Any.
|
H.
740
megabecquerels
(20
millicuries).
|
Annual
Possession Quantity
not
to exceed
37.37
gigabecquerels
(1.01
curies).*
|
I.
Lanthanum-140.
|
I.
Liquid
and/or
solid.
|
I.
7.4
gigabecquerels
(200
millicuries).
|
Annual
Possession Quantity
not
to exceed
462.5
gigabecquerels
(12.5
curies).*
|
||
J.
Cesium
131.
|
J.
Sealed
Source:
Sealed
source &
Device
Registry
WA-1220-S-101-S.
|
J.
No
single source to exceed
2.41
gigabecquerels
(65
millicuries). **
|
K.
Radioactive
material,
atomic
numbers 3 to
83,
inclusive.
|
K.
Sealed
source
(manufactured
or
distributed
under a
specific
license
issued
by a
Licensing
State or
an
Agreement
State).
|
K.
No
single source to exceed
11.1
megabecquerels
(300
microcuries).
Total
activity shall not exceed
185
megabecquerels
(5
millicuries).
|
L.
Cobalt
57.
|
L.
Sealed
source
(manufactured
or
distributed
under a
specific
license
issued
by a
Licensing
State or
an
Agreement
State).
|
L.
No
single source to exceed
222
megabecquerels
(6
millicuries);
Total
activity shall not exceed
1.11
gigabecquerels
(30
millicuries).
|
M.
Cesium
137
|
M.
Sealed
source
(J.L.
Shepherd
model
6810)
|
M.
1.48
gigabecquerels
(40
millicuries)
|
9. |
Authorized
Use.
|
A-J.
|
Research
and development; processing
and
processing byproducts
,
manufacturing and distribution of sealed sources; storage and
waste.
|
B.
|
Residual
contaminants of the elution process and leak test
samples.
|
K
-
M
.
|
To
be used for quality assurance and calibration of radiation detection
instrumentation and/or dose
calibrators.
|
10.
|
A.
|
Subitems
A, B and J
ONLY
of
License Items 6, 7 and 8, shall be stored and/or
used
at the Radiochemical Processing Laboratory, Building 325 in the Hanford
Site
300 area, Redwood Street, Richland,
Washington.
|
B.
|
Subitems
A - M of License Items 6, 7 and 8 shall be stored and/or used in
Building
13, Bay-3, of the Pacific EcoSystems (PECOS) facility, 2025 Battelle
Boulevard,
Richland, Washington
99354.
|
11.
|
The
licensee shall comply with the provisions of chapter 246-220 WAC
"Radiation Protection -
General
Provisions"; chapter 246-221 WAC "Radiation Protection Standards";
chapter
246-222
WAC
"Radiation Protection - Worker Rights"; chapter 246-231 WAC “Packaging and
Transportation
of Radioactive Material”; chapter 246-232 WAC "Radioactive Material
-
Licensing
Applicability"; chapter 246-235 WAC "Radioactive Materials - Specified
Licenses";
chapter
246-247 WAC "Radiation Protection - Air Emissions"; and chapter 246-249
WAC
"Radioactive
Waste - Use of the Commercial Disposal
Site".
|
12.
|
The
Radiation Safety Officer for this program shall be Garrett N. Brown,
Ph.D.
|
13.
|
Radioactive
material, as described in Subitems below, shall be used by, or under
the
supervision of:
|
A. Garrett N. Grown, Ph.D. |
Subitems
A - M of Items 6, 7, and
8.
|
B. David J. Swanberg, P.E. |
Subitems
A - J of Items 6, 7, and 8.
|
C. Lemuel Matthews |
Subitems
A - M of Items 6, 7, and 8.
|
D. Dale E. Boyce |
Subitems
A - M of Items 6, 7, and 8.
|
E. Matthew J. Bales |
Subitems
A - L of Items 6, 7, and 8.
|
14.
|
The
licensee is authorized to transport and/or ship licensed material
only in
accordance with the provisions of chapter 246-231 WAC, “Packaging and
Transportation of Radioactive
Material”.
|
15.
|
The
licensee shall conduct a bioassay program in accordance with the
criteria
set forth in WAC 246-221-040 and WAC
246-221-100.
|
16.
|
Personnel
dosimetry for external exposure:
|
A.
|
Extremity
monitoring (finger rings) shall be provided to individuals work
with
:
|
1.
|
Any
radioactive materials inside hot cells or glove boxes,
or
|
2.
|
Greater
than 37 megabecquerels (1 millicurie) at a time or 370 megabecquerels
(10
millicuries)
per month of high-energy beta or gamma emitters such as Phosphorus-32,
or
Iodine-131.
|
B.
|
Whole
body dosimeters shall be provided to individuals working with more
than
370
megabecquerels
(10 millicuries) per month of high-energy beta emitters or more than
37
megabecquerels
(1 millicurie) per month of gamma emitters with energies greater
than 200
keV.
|
C.
|
Whole
body dosimeters shall be provided to declared pregnant workers working
with
more
than 370 megabecquerels (10 millicuries) per month of high-energy
beta
emitters or
more
than 3.7 megabecquerels (0.1 millicurie) per month of gamma emitters
with
energies
greater
than 200 keV.
|
17.
|
The
licensee's emergency procedures shall conform to procedures outlined
in
the Washington State Radiation Emergency Handbook revised November
1991,
or subsequent revisions.
|
18.
|
A.
|
1.
|
Each
sealed source, except for subitem 6.J, containing licensed material
shall
be
tested
for leakage and/or contamination at intervals not to exceed six months.
In
the
absence
of a certificate from a transferor indicating that a test has been
made
within
six
months prior to transfer, a sealed source received from another person
shall
not
be put into use until
tested.
|
2.
|
Notwithstanding
the periodic leak test required by this condition, any licensed sealed
source
is exempt from such leak tests when the source contains 3.7 megabecquerels
(100
microcuries) or less of beta and/or gamma emitting material or 370
kilobecquerels
(10 microcuries) or less of alpha emitting
material.
|
18.
|
A.
|
3.
|
Notwithstanding
the periodic leak test required by this Condition, any licensed sealed
source
is exempt from such leak tests when the source is in permanent storage.
In
lieu
of leak tests, the storage area shall be surveyed every six months
and the
sources
shall
be leak tested prior to any handling or removal from
storage.
|
B.
|
The
test shall be capable of detecting the presence of 185 becquerels
(0.005
microcurie) of
radioactive
material on the test sample. The test sample shall be taken from
the
sealed
source
or from the surfaces of the device in which the sealed source is
permanently
mounted
or stored on which one might expect contamination to accumulate.
Records
of
leak
test results shall be kept in units of becquerels (or microcuries)
and
maintained for
inspection
by the department.
|
C.
|
If
the test reveals the presence of 185 becquerels (0.005 microcurie)
or more
of removable
contamination,
the licensee shall immediately withdraw the sealed source from use
and
shall
cause it to be decontaminated and repaired or to be disposed in accordance
with
department
regulations. A report shall be filed within five (5) days of the
test with
the
department
describing the equipment involved, the test results, and the corrective
action
taken.
|
D.
|
The
licensee is authorized to perform leak test sampling in accordance
with
their
Radioactive
Materials License Application. The analysis shall be performed by
persons
specifically
authorized by the department, the U.S. Nuclear Regulatory Commission,
an
Agreement
State, or a Licensing State to perform such services. Alternatively,
leak
test
samples
may be collected and/or analyzed by other persons specifically authorized
by the
department,
the U.S. Nuclear Regulatory Commission, an Agreement State, or a
Licensing
State
to perform such services. Licensing State Authorization applies to
naturally
occurring
and accelerator produced radioactive material (NARM)
only.
|
19.
|
The
licensee shall maintain security and control of all radioactive materials
received and possessed under the
license.
|
A.
|
The
licensee shall conduct a physical inventory every six months to account
for all sealed
sources
received and possessed under the license. The inventory shall include
activities,
radionuclides,
source descriptions, serial numbers, locations, name of the person
conducting
the inventory, and the date of the
inventory.
|
B.
|
The
licensee shall maintain a documented running inventory of all unsealed
radioactive
materials
received, possessed, used, transferred and disposed of under the
license.
The
records
shall include, radionuclides, activities, and disposition. Records
shall
be
maintained
for inspection by the
department.
|
20.
|
All
hoods used for storage, use and/or control of radioactive material
shall
have a flow rate
that
meets the manufacturer’s specifications, with the hood sash at the
specified working
height.
Hood flow rates shall be annually checked and adjusted as necessary
. A
record of
the
annual flow-rate check shall be maintained for inspection by the
department.
|
21.
|
Operations
involving License Conditions 9.A - 9.J, at the use location in Building
13,
Bay-3,
of the Pacific EcoSystems (PEcoS) facility, 2025 Battelle Boulevard,
Richland,
Washington
99354 shall be conducted in accordance with of RP-110, “Radiological
Environmental
Monitoring Plan” dated 1 October 2005, approved by the Department of
Health.
|
22.
|
Surveys
for contamination at the use location in Building 13, Bay-3, of the
Pacific
EcoSystems
(PEcoS) facility, 2025 Battelle Boulevard, Richland, Washington 99354
shall
be performed and recorded in accordance with procedure RP-402,
“Radiological
Survey
of Work Areas and Equipment” dated 1 July 2005 and RP-110, “Radiological
Environmental
Monitoring Plan”, dated 1 October
2005.
|
23.
|
Full
and current copies of the facility’s Emergency and Standard Operating
Procedures shall be
maintained
onsite. The licensee may make minor changes to the Emergency and
Standard
Operating
Procedures that do not affect or compromise radiation safety, or
cause a
potential or
actual
increase in exposure to workers or the
public.
|
24.
|
Survey
instruments and instruments used for the required environmental monitoring
plan shall
be
calibrated annually by persons specifically authorized by the department,
the U.S. Nuclear
Regulatory
Commission, or an Agreement State to perform such
services.
|
25.
|
The
licensee shall comply with the conditions outlined in Attachment
One -
Radioactive Air Emissions.
|
26.
|
In
the event the licensee chooses to terminate their Radioactive Materials
License, or vacate
authorized
use locations the licensee shall follow the applicable requirements
listed
in chapter
246-221
WAC; chapter 246-232 WAC and/or chapter 246-246
WAC.
|
27.
|
All
individuals working directly with radioactive materials or frequenting
radioactive materials
use
areas shall receive training commensurate with their duties and
responsibilities before
beginning
work or frequenting the area and at least annually thereafter. At
a
minimum training
shall
include; health protection considerations for individuals and potential
offspring;
procedures
to minimize exposure; purposes and functions of protective devices;
company
radioactive
material work procedures; applicable state Regulations (Title 246
WAC) and
the
conditions
of this license. Documentation indicating who was trained, subjects
and
dates shall
be
maintained for inspection by the
department.
|
28.
|
The
licensee is authorized to hold radioactive material with a physical
half-life of less than 100
days
for decay-in-storage before disposal in ordinary trash provided the
following conditions are
met:
1) Radioactive waste shall be held for a minimum of 10 half-lives;
2)
Before disposal as
ordinary
trash radioactive waste must be surveyed with an appropriate survey
meter,
without any
shielding
on the meter or package, to determine that it is not distinguishable
from
background
and
all radiation labels are removed or obliterated; 3) A record of each
disposal shall be made.
Records
shall include: date material (container) was put into storage,
radionuclides disposed,
date
of disposal, survey instrument used, measured count rate (in counts
per
minute) on the
surface
of each waste container, background (in counts per minute) radiation
level
and name of
individual
performing survey.
|
29.
|
The
licensee shall distribute only sealed sources and/or devices for
which a
Sealed Source and
Device
Registry Certificate has been issued by the Washington Department
of
Health, the U. S.
Nuclear
Regulatory Commission, or other Agreement/Licensing State. Sealed
sources
and/or
devices
distributed must adhere to the design specifications described in
the
Sealed Sources and
Device
Registry Certificate. Any changes in the design or specifications
of these
sealed sources
and/or
devices require the manufacturer to apply for and receive an amendment
to
the Sealed
Source
and Device Registry Certificate prior to
distribution.
|
30.
|
A.
|
Each
sealed source fabricated by the licensee shall be inspected and tested
for
construction
defects,
leakage, and /or contamination prior to use or transfer as a sealed
source. If the
inspection
or test reveals any construction defects or the presence of 185 becquerels
(0.005
microcurie)
or more of removable contamination, the licensee shall immediately
withdraw
the
sealed source from use and shall cause it to be decontaminated, repaired
and re-tested,
or
disposed in accordance with department
regulations.
|
B.
|
Records
of leak test results shall be kept in units of becquerels (or microcuries)
and
maintained
for inspection by the
department.
|
C.
|
The
following events require the licensee to file a written report with
the
department
within
five (5) days, describing the deviation, failure, or leakage, and
the
corrective action
taken:
|
1.
|
A
significant deviation from or failure of the quality control/assurance
program such
that
product failure occurs during shipping or use in a
patient.
|
2.
|
Product
structural design defects resulting in or causing product
failure.
|
3.
|
The
presence of 185 becquerels (0.005 microcurie) or more of removable
contamination) is discovered by a user of the
product.
|
30.
|
D.
|
The
licensee shall provide a certificate of origin for the recipient
showing
the sealed
source
leak test results, in units of becquerels or microcuries, for each
lot of
sources
transferred.
The document shall certify that less than 185 becquerels or 0.005
microcurie
or
more of removable contamination is
present.
|
E.
|
The
licensee is authorized to collect and analyze leak test samples,
for their
own sources
(not
as a commercial service), in accordance with procedures described
in their
Radioactive
Materials License Application. Alternatively, leak test samples may
be
collected
and/or analyzed by other persons specifically authorized by the
department, the
U.S.
Nuclear Regulatory Commission, an Agreement State, or a Licensing
State to
perform
such services. Licensing State authorization applies to naturally
occurring and
accelerator
produced radioactive material (NARM) only.
The
Radiation Safety Officer shall maintain a list of persons trained
and
authorized to
perform
the analysis of sealed source leak test
samples.
|
31.
|
The
licensee shall manufacture, label, and distribute sealed sources
and/or
devices in accordance
with
WAC 246-235-102, “Manufacture and Distribution of Sources or Devices
Containing
Radioactive
Materials For Medical Use” and NUREG-1556, Volume 12, “Consolidated
Guidance
About Materials Licenses: Program-Specific Guidance about Possession
Licenses for
Manufacturing
and Distribution”.
|
32.
|
Medical
brachytherapy sources (i.e. seeds) shall only be distributed to users
authorized under a specific radioactive materials
license.
|
33.
|
The
Radiation Safety Officer shall perform an annual review of the radiation
safety program for
adherence
to the conditions of the license, Title 246 WAC and ALARA concepts.
A
record of
this
audit shall be maintained for inspection by the
department.
|
34.
|
Contamination
levels in hot cells and glove boxes shall be maintained
ALARA.
|
35.
|
In
addition to the possession limits in Item 8, the licensee shall further
restrict the
possession
of licensed material to quantities below the minimum limit specified
in
WAC
246-235-075
for establishing decommissioning financial
assurance,
OR,
The
licensee shall maintain a decommissioning funding plan in accordance
with
WAC
246-235-075
and Nuclear Regulatory Commission NUREG
1757.
|
A.
|
The
decommissioning funding plan shall be updated and resubmitted during
each
license renewal.
|
35.
|
B.
|
Financial
Surety to cover the decommissioning funding plan shall be maintained
as
required by WAC
246-235-075.
|
36.
|
The
licensee shall respond in the manner, and within the time frame,
specified
to any and all
department
correspondence necessary to keep the license and related information
current.
Where
the licensee has submitted proposed corrective action, such action
shall
be fully
implemented
in a timely manner, unless the department has subsequently modified
the
licensee’s
proposed corrective action.
|
37.
|
In
accordance with WAC 246-249-020 “Site Use Permits”, each licensee shall
possess a valid
and
unencumbered site use permit prior to the transfer of radioactive
waste,
directly to or
through
an authorized licensed broker, for disposal of such waste at any
commercial disposal
facility
in the state of Washington. In addition the licensee shall comply
with the
permit
requirements
of the Washington Department of Ecology.
The
Licensee shall retain the valid and unencumbered site use permit
until
provided
documentation,
from the disposal facility or broker, that the radioactive waste
has been
accepted
by the disposal facility. The licensee shall retain the records of
disposal for
inspection
by the Department.
|
38.
|
Except
as specifically provided by this license, the licensee shall possess
and
use radioactive
material
described in Items 6, 7, and 8 of this license in accordance with
statements,
representations
and procedures contained in the documents listed below. The department's
"Rules
and Regulations for Radiation Protection" shall govern the licensee's
statements in
applications
or letters, unless the statements are more restrictive than the
regulations.
|
A.
|
Application
and attachments dated 9 April 2004.
|
B.
|
Letter
with attachments dated 13 July 2004; RE: Initial application and
Building
Emergency Procedure, Radiochemical Processing Laboratory (RPL)
Building.
|
C.
|
Email
dated 19 July 2004; RE: clarification of isotope
limits.
|
D.
|
Sealed
source and device registration
WA-1220-S-101-S.
|
E.
|
Letter
dated 15 February 2005 and attachments; RE: Procedure
updates.
|
38.
|
F.
|
Letter
dated 14 April 2005 and attachments; RE: Copy of Benton County NOC,
Application
for Installation of an Air Pollution Source regarding WSB-3; Letter
dated
15
February 2005 (received 19 April 2005) and attachments; RE: New facility
proposal;
Attachment
L 18 April 2005 and; RE: air emissions questionnaire; Letter dated
11 May
2005
and attachments; RE: NOC air license application for WSB-3; Letter
dated
11 May
2005;
RE: Request to add new facility; Memorandum of Understanding dated
24 May
2005;
RE: signed by PECOS and IsoRay; and Letter dated 25 May 2005; RE:
Authorization
from PECOS to occupy building and
construct.
|
G.
|
Email
dated 20 April 2005; RE: distances to various members of the public;
letter and
attachments
dated 11 May 2005; RE: Notice of Construction for Air Emissions Unit;
letter
and attachments dated 28 June
2005.
|
H.
|
Letter
dated 28 June 05 and attachments on CD-R; RE: Updated Application
for new
facility
operations, new authorized user, additional isotopes; updated procedures
small
business
certificate, etc.
|
I.
|
Letter
dated 23 August 2005; RE: new sealed source for instrument calibration
and
QA and
increase
Ba 131 activity limit.
|
J.
|
RP-110,
“Radiological Environmental Monitoring Plan” received 23 September
2005.
|
K.
|
Letter
and Attachments dated 26 September 2005; RE: add new AUR and calibration
sources.
|
L.
|
Revision
of RP Procedures, 201, 202, 203, 204, 206, 207, 208, 301, 302, 303,
501,
502,
503,
504, 601, 602, 603 and various forms; received 30 September
2005.
|
M.
|
Revision
of “RP 110, Radiological Environmental Monitoring Plan” and RP
Procedures
100, 106, 107, 404, and 801; received 3 October 2005 and RP Procedures
108
and 901 received 6 October
2005.
|
FOR THE STATE OF WASHINGTON DEPARTMENT OF HEALTH | ||
|
|
|
Date: 6 October 2005 | By: | /s/ Anine Grumbles |
Anine Grumbles |
||
Radioactive Materials Licensing |