##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For The Quarterly Period Ended September 30, 2005
 Commission File Number 000-50309
 
 Clearant, Inc.
  
 Delaware
(State or other jurisdiction of incorporation)
    
    91-2190195
(I.R.S. Employer Identification Number)
 11111 Santa Monica Boulevard, Suite 650, Los Angeles, California 90025
 (310) 479-4570
 þ o
 o þ
 o þ




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##### Table of Contents



INDEX
 PART I. FINANCIAL INFORMATIONItem 1. Financial Statements:Condensed Balance Sheets at September 30, 2005 (unaudited) and December 31, 2004Condensed Statements of Operations for the three and nine months ended September 30, 2005 and 2004 (unaudited)Condensed Statement of Stockholders Equity (Deficit) for the nine months ended September 30, 2005 (unaudited)Condensed Statements of Cash Flows for the three and nine months ended September 30, 2005 and 2004 (unaudited)Notes to Condensed Financial Statements (unaudited)Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures about Market RiskItem 4. Controls and ProceduresPART II. OTHER INFORMATIONItem 1. Legal ProceedingsItem 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 3. Defaults Upon Senior SecuritiesItem 4. Submission of Matters to a Vote of Securities HoldersItem 5. Other InformationItem 6. ExhibitsSignaturesExhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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CLEARANT, INC.
 
 CONDENSED BALANCE SHEETS
 (in thousands)
 September 30,
    
    
    December 31,2005
    
    
    2004(Unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    2,083
    
    
    $
    177Accounts receivable
    
    
    235
    
    
    
    127Prepaids and other assets
    
    
    386
    
    
    
    502Total current assets
    
    
    2,704
    
    
    
    806Property and equipment, net
    
    
    427
    
    
    
    595Identifiable intangibles, net
    
    
    1,427
    
    
    
    1,453Restricted cash  noncurrent
    
    
    189
    
    
    
    161Other assets
    
    
    48
    
    
    
    63Total assets
    
    $
    4,795
    
    
    $
    3,078Liabilities, Redeemable Preferred Stock
and Stockholders Equity (Deficit)Current liabilities:Accounts payable
    
    $
    1,543
    
    
    $
    1,847Accrued liabilities
    
    
    1,109
    
    
    
    3,061Deferred revenue
    
    
    60
    
    
    
    178Bridge loans, net
    
    
    97
    
    
    
    4,997Total current liabilities
    
    
    2,809
    
    
    
    10,083Deferred revenue  noncurrent
    
    
    75
    
    
    
    91Other liabilities
    
    
    26
    
    
    
    70Total liabilities
    
    
    2,910
    
    
    
    10,244Commitments and ContingenciesSeries A Redeemable Preferred stock:Series A redeemable convertible
preferred stock (50,000 shares
authorized; -0- and 6,454 shares
issued and outstanding at
September 30, 2005 and December
31, 2004, respectively)
    
    
    
    
    
    
    17,829Stockholders equity (deficit):Series B preferred stock (-0-
shares authorized; -0- and 6,630
shares issued and outstanding at
September 30, 2005 and December
31, 2004, respectively)
    
    
    
    
    
    
    16,386Series C junior preferred stock
(-0- shares authorized; -0- and
37 shares issued and outstanding
at September 30, 2005 and
December 31, 2004, respectively)
    
    
    
    
    
    
    86Common stock ($0.0001 par value;
200,000 shares authorized;
35,936 and 7,365 issued and
outstanding at September 30,
2005 and December 31, 2004,
respectively)
    
    
    4
    
    
    
    1Additional paid-in capital
    
    
    71,008
    
    
    
    17,398Accumulated deficit
    
    
    (69,068
    )
    
    
    (58,820
    )Other comprehensive loss
    
    
    (59
    )
    
    
    (46
    )Total stockholders equity (deficit)
    
    
    1,885
    
    
    
    (24,995
    )Total liabilities, redeemable
preferred stock and stockholders
equity (deficit)
    
    $
    4,795
    
    
    $
    3,078
 See accompanying notes to condensed financial statements.
 F-3




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CLEARANT, INC.
 
 CONDENSED STATEMENTS OF OPERATIONS
 (in thousands, except for per share data)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Revenues:Licensing
    
    $
    62
    
    
    $
    27
    
    
    $
    154
    
    
    $
    75Contract research and milestones
    
    
    72
    
    
    
    178
    
    
    
    223
    
    
    
    428Grants
    
    
    20
    
    
    
    64
    
    
    
    75
    
    
    
    186Total revenues
    
    
    154
    
    
    
    269
    
    
    
    452
    
    
    
    689Cost of sales
    
    
    4
    
    
    
    9
    
    
    
    13
    
    
    
    25Net revenues
    
    
    150
    
    
    
    260
    
    
    
    439
    
    
    
    664Operating expenses:Sales and marketing
    
    
    968
    
    
    
    911
    
    
    
    2,276
    
    
    
    3,163Research and development
    
    
    465
    
    
    
    1,282
    
    
    
    1,727
    
    
    
    3,996General and administrative
    
    
    1,326
    
    
    
    1,393
    
    
    
    3,563
    
    
    
    3,536Stock-based compensation
    
    
    51
    
    
    
    13
    
    
    
    503
    
    
    
    79Total operating expenses
    
    
    2,810
    
    
    
    3,599
    
    
    
    8,069
    
    
    
    10,774Loss from operations
    
    
    (2,660
    )
    
    
    (3,339
    )
    
    
    (7,630
    )
    
    
    (10,110
    )Other income (expense):Interest expense, net
    
    
    
    
    
    
    (98
    )
    
    
    (1,786
    )
    
    
    (174
    )Gain on extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    1,290
    
    
    
    Gain on settlement of debt for stock
    
    
    
    
    
    
    
    
    
    
    39
    
    
    
    Net loss
    
    
    (2,660
    )
    
    
    (3,437
    )
    
    
    (8,087
    )
    
    
    (10,284
    )Add: Preferred stock dividend and financing
costs
    
    
    
    
    
    
    (413
    )
    
    
    (2,161
    )
    
    
    (1,215
    )Net loss attributable to common stock
    
    $
    (2,660
    )
    
    $
    (3,850
    )
    
    $
    (10,248
    )
    
    $
    (11,499
    )Net loss per share:Basic and diluted
    
    $
    (0.07
    )
    
    $
    (0.52
    )
    
    $
    (0.39
    )
    
    $
    (1.56
    )Number of shares used in per share calculation:Basic and diluted
    
    
    35,923
    
    
    
    7,367
    
    
    
    26,599
    
    
    
    7,366
 See accompanying notes to condensed financial statements.
 F-4




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CLEARANT, INC.
 
 CONDENSED STATEMENT OF STOCKHOLDERS EQUITY
 (in thousands)
 Series B Preferred
    
    
    Series C Preferred
    
    
    Common Stock,
    
    
    Additional
    
    
    
    
    
    
    OtherStock
    
    
    Stock
    
    
    $0.0001 par value
    
    
    Paid-in
    
    
    Accumulated
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    Loss
    
    
    TotalsBalance, December 31, 2004
    
    
    6,630
    
    
    $
    16,386
    
    
    
    37
    
    
    $
    86
    
    
    
    7,372
    
    
    $
    1
    
    
    $
    17,398
    
    
    $
    (58,820
    )
    
    $
    (46
    )
    
    $
    (24,995
    )Issuance of warrants to
January 2005 Bridge
Holders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93
    
    
    
    
    
    
    
    
    
    
    
    93Settlement of debt for
common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31
    
    
    
    
    
    
    
    64
    
    
    
    
    
    
    
    
    
    
    
    64Exchange of warrants for
common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    77
    
    
    
    
    
    
    
    158
    
    
    
    
    
    
    
    
    
    
    
    158Beneficial return to
preferred shareholders
from allocation of
shares from common to
preferred stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,100
    
    
    
    
    
    
    
    
    
    
    
    2,100Conversion of preferred
stock into common stock
    
    
    (6,630
    )
    
    
    (16,386
    )
    
    
    (37
    )
    
    
    (86
    )
    
    
    11,542
    
    
    
    1
    
    
    
    30,566
    
    
    
    
    
    
    
    
    
    
    
    14,095Exchange of bridge loan
warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,349
    )
    
    
    
    
    
    
    
    
    
    
    (1,349
    )Conversion of Series A
Preferred dividend
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,141
    
    
    
    
    
    
    
    3,794
    
    
    
    
    
    
    
    
    
    
    
    3,794Conversion of Series C
Preferred dividend
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    5Conversion of 2004 bridge
loans into common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,834
    
    
    
    1
    
    
    
    6,724
    
    
    
    
    
    
    
    
    
    
    
    6,725Bliss Essential, Corp.
shares issued in
connection with the
merger transaction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,136
    
    
    
    1
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    17Issuance of common stock
in conjunction with
Private Placement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,910
    
    
    
    
    
    
    
    8,413
    
    
    
    
    
    
    
    
    
    
    
    8,413Conversion of Publico
Bridge Loans into common
stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    783
    
    
    
    
    
    
    
    2,373
    
    
    
    
    
    
    
    
    
    
    
    2,373Exercise of common stock
options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49
    
    
    
    
    
    
    
    32
    
    
    
    
    
    
    
    
    
    
    
    32Issuance of common stock
to consultants for
services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58
    
    
    
    
    
    
    
    235
    
    
    
    
    
    
    
    
    
    
    
    235Compensation expenses
incurred in connection
with issuance of options
and warrants to
non-employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    386
    
    
    
    
    
    
    
    
    
    
    
    386Comprehensive loss:Net Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,087
    )
    
    
    
    
    
    
    (8,087
    )Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13
    )
    
    
    (13
    )Total Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,087
    )
    
    
    (13
    )
    
    
    (8,100
    )Preferred stock dividend
and financing costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,161
    )
    
    
    
    
    
    
    (2,161
    )Balance at September 30,
2005 (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,936
    
    
    $
    4
    
    
    $
    71,008
    
    
    $
    (69,068
    )
    
    $
    (59
    )
    
    $
    1,885
 See accompanying notes to condensed financial statements.
 F-5




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CLEARANT, INC.
 
 CONDENSED STATEMENTS OF CASH FLOWS
 (in thousands)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Operating activitiesNet loss
    
    $
    (2,660
    )
    
    $
    (3,437
    )
    
    $
    (8,087
    )
    
    $
    (10,284
    )Adjustments to reconcile net loss to net cash used
in operating activities:Depreciation and amortization
    
    
    133
    
    
    
    98
    
    
    
    380
    
    
    
    295Stock-based compensation
    
    
    51
    
    
    
    13
    
    
    
    503
    
    
    
    79Non-cash interest expense associated with
convertible debt financings (Note 6)
    
    
    
    
    
    
    98
    
    
    
    1,786
    
    
    
    180Gain on extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    (1,290
    )
    
    
    Gain on settlement of debt for stock
    
    
    
    
    
    
    
    
    
    
    (39
    )
    
    
    Warrant exchange for common stock
    
    
    
    
    
    
    
    
    
    
    158
    
    
    
    Changes in operating assets and liabilities:Receivables and prepaids
    
    
    47
    
    
    
    159
    
    
    
    68
    
    
    
    177Accounts payable
    
    
    30
    
    
    
    919
    
    
    
    (304
    )
    
    
    1,798Accrued liabilities
    
    
    (539
    )
    
    
    220
    
    
    
    (1,923
    )
    
    
    45Deferred revenue
    
    
    (30
    )
    
    
    14
    
    
    
    (134
    )
    
    
    137Other assets and liabilities
    
    
    91
    
    
    
    9
    
    
    
    34
    
    
    
    21Net cash used in operating activities
    
    
    (2,877
    )
    
    
    (1,907
    )
    
    
    (8,848
    )
    
    
    (7,552
    )Investing activitiesCost of identified intangibles
    
    
    (29
    )
    
    
    (135
    )
    
    
    (130
    )
    
    
    (463
    )Capital expenditures
    
    
    (16
    )
    
    
    2
    
    
    
    (51
    )
    
    
    (53
    )Cash received in 2005 merger activities
    
    
    
    
    
    
    
    
    
    
    17
    
    
    
    Proceeds from disposals of marketable securities
    
    
    
    
    
    
    412
    
    
    
    
    
    
    
    3,500Net cash provided by (used in) investing activities
    
    
    (45
    )
    
    
    279
    
    
    
    (164
    )
    
    
    2,984Financing activitiesIssuance of common stock, net of costs
    
    
    
    
    
    
    
    
    
    
    8,455
    
    
    
    Issuance of Series C preferred stock, net of costs
    
    
    
    
    
    
    85
    
    
    
    
    
    
    
    85Issuance of convertible notes payable, net of costs
    
    
    
    
    
    
    3,345
    
    
    
    2,811
    
    
    
    5,925Exercise of common stock options
    
    
    13
    
    
    
    1
    
    
    
    32
    
    
    
    1Principal payments on bridge loans
    
    
    
    
    
    
    
    
    
    
    (366
    )
    
    
    Principal payments on capital lease obligations
    
    
    
    
    
    
    (5
    )
    
    
    (1
    )
    
    
    (18
    )Net cash provided by (used in) financing activities
    
    
    13
    
    
    
    3,426
    
    
    
    10,931
    
    
    
    5,993Effect of translation adjustments on cash and cash
equivalents
    
    
    (7
    )
    
    
    (19
    )
    
    
    (13
    )
    
    
    (21
    )Change in cash and cash equivalents
    
    
    (2,916
    )
    
    
    1,779
    
    
    
    1,906
    
    
    
    1,404Cash and cash equivalents, beginning of period
    
    
    4,999
    
    
    
    799
    
    
    
    177
    
    
    
    1,174Cash and cash equivalents, end of period
    
    $
    2,083
    
    
    $
    2,578
    
    
    $
    2,083
    
    
    $
    2,578
 See accompanying notes to condensed financial statements.
 F-6




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CLEARANT, INC.
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 (in thousands, except for share and per share data)
 NOTE 1  BASIS OF PRESENTATION
     NOTE 2  NEW ACCOUNTING PRONOUNCEMENTS
 Share-Based Payment Accounting for Stock Issued to Employees
 Exchanges of Nonmonetary Assets Accounting for Nonmonetary Transactions
 F-7




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CLEARANT, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(in thousands, except for share and per share data)
 NOTE 2  NEW ACCOUNTING PRONOUNCEMENTS (Continued)
  Accounting for Conditional
Asset Retirement Obligations conditional asset
retirement obligation Accounting for Asset Retirement Obligations
 Accounting Changes and Error Corrections Accounting Changes Reporting Accounting
Changes in Interim Financial Statements
 NOTE 3  NET LOSS PER SHARE
 Earnings Per Share .
  Nine Months EndedSeptember 30,2005
    
    
    2004Convertible preferred stock (and related accrued
dividends)
and convertible bridge loans
    
    
    
    
    
    
    18,210,000Stock Options
    
    
    2,686,000
    
    
    
    4,999,000Warrants
    
    
    3,417,000
    
    
    
    4,119,000
 F-8




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CLEARANT, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(in thousands, except for share and per share data)
 NOTE 3  NET LOSS PER SHARE (Continued)
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Basic and diluted net loss per share:Numerator:Net loss attributable to common stock
    
    $
    (2,660
    )
    
    $
    (3,850
    )
    
    $
    (10,248
    )
    
    $
    (11,499
    )Denominator:Weighted average common stock shares
outstanding (in thousands)
    
    
    35,923
    
    
    
    7,367
    
    
    
    26,599
    
    
    
    7,366Net loss per share, basic and diluted
    
    $
    (0.07
    )
    
    $
    (0.52
    )
    
    $
    (0.39
    )
    
    $
    (1.56
    )
 NOTE 4  STOCK OPTIONS AND STOCK-BASED COMPENSATION
      Risk-free interest rate
    
    
    3.0%5.5
    %Expected life in years
    
    
    5Dividend yield
    
    
    0
    %Expected volatility
    
    
    70%75
    %
 F-9




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CLEARANT, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(in thousands, except for share and per share data)
 NOTE 4  STOCK OPTIONS AND STOCK-BASED COMPENSATION (Continued)
 :
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net loss attributable to common stock, as reported
    
    $
    (2,660
    )
    
    $
    (3,850
    )
    
    $
    (10,248
    )
    
    $
    (11,499
    )Add: stock-based compensation expense included in
reported net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deduct: stock-based compensation expense
determined under the fair value method for all
awards
    
    
    (868
    )
    
    
    (395
    )
    
    
    (1,034
    )
    
    
    (1,525
    )Net loss attributable to common stock  pro forma
    
    $
    (3,528
    )
    
    $
    (4,245
    )
    
    $
    (11,282
    )
    
    $
    (13,024
    )Net loss per share:As reported, basic and diluted
    
    $
    (0.07
    )
    
    $
    (0.52
    )
    
    $
    (0.39
    )
    
    $
    (1.56
    )Pro forma, basic and diluted
    
    $
    (0.10
    )
    
    $
    (0.58
    )
    
    $
    (0.42
    )
    
    $
    (1.77
    )
     NOTE 5  REVERSE MERGER TRANSACTION
  F-10




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CLEARANT, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(in thousands, except for share and per share data)
 NOTE 5  REVERSE MERGER TRANSACTION (Continued)
  NOTE 6  COMMON STOCK
 Common Stock Transactions and Non-cash Financing Activities
     Lock-up Period
  NOTE 7  SUBSEQUENT EVENTS
 Clearant
Process ®
 F-11




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CLEARANT, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(in thousands, except for share and per share data)
 NOTE 7  SUBSEQUENT EVENTS (Continued)
  F-12




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ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion of our financial condition and results of operations should be read
in conjunction with our financial statements and the related notes, and the other financial
information included in this report.
 Forward-Looking Statements
 The forward-looking comments contained in this report involve risks and uncertainties. Our
actual results may differ materially from those discussed here due to factors such as, among
others, limited operating history, difficulty in developing, exploiting and protecting proprietary
technologies, intense competition and substantial regulation in the healthcare industry. Additional
factors that could cause or contribute to such differences can be found in the following discussion
and in the Risks Factors set forth in Item 5 of our Quarterly Report for the quarter ended June
30, 2005.
 Overview
 Clearant
Process ®
 
    
    Tissue allograft implants
    
    Recombinant products
    
    Plasma therapeutics
    
    Blood and blood-related products
 The Merger
  Our Business
 Clearant
Process ® Clearant
Process ®
 
    
    Inactivate a broad range of known pathogens irrespective of size, origin or structure;
    
    Achieve sterility, in some cases with margins of safety greater than four to thirteen
logs of pathogen reduction;
    
    Be used in both intermediate and final stages of production;
    
    Protect the mechanical and biological properties of the tissue being treated; and
    
    Be applied to a product after it has been sealed into its final package.
 Clearant Process ® Clearant
Process ®
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Clearant Process ®
 Clearant Process ® Clearant Process ®
 Clearant Process ® Clearant Process ®
 Clearant Process ® Clearant
Process ® Clearant Process ® Clearant Process ®
 Results of Operations
 Three Months Ended September 30, 2005 Compared to Three Months Ended September 30, 2004
 Revenues
 Clearant Process ® Clearant Process ®
 Sales, General and Administrative Expenses
 Clearant Process ®
 Research and Development Expenses
  2




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Clearant Process ®
 Stock-based Compensation
  Net Interest Expense
  Preferred Stock Dividend and Financing Costs
  Nine Months Ended September 30, 2005 Compared to Nine Months Ended September 30, 2004
 Revenues
 Clearant Process ® Clearant
Process ®
 Sales, General and Administrative Expenses
 Clearant
Process ®
 Research and Development Expenses
 Clearant Process ®
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Stock-based Compensation
  Net Interest Expense
  Preferred Stock Dividend and Financing Costs
  Liquidity and Capital Resources
      4




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##### Table of Contents



Contractual Obligations and Commercial Commitments
  Less than
    
    
    
    
    
    
    
    
    
    
    More thanContractual Obligations
    
    Total
    
    
    1 year
    
    
    1  3 years
    
    
    3  5 years
    
    
    5 yearsOperating lease obligations
    
    $
    655
    
    
    $
    560
    
    
    $
    95
    
    
    
    
    
    
    
    $
    655
    
    
    $
    560
    
    
    $
    95
    
    
    
    
    
    
    
    
 Off-Balance Sheet Arrangements
  Critical Accounting Policies and Estimates
   Revenue Recognition and Deferred Revenue
 Revenue Recognition
 ® ®
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®
 Identifiable Intangibles
  Recent Accounting Pronouncements
 Share-Based Payment
  Accounting for Conditional
Asset Retirement Obligations conditional asset
retirement obligation Accounting for Asset Retirement Obligations
 Accounting Changes and Error Corrections Accounting Changes Reporting
Accounting Changes in Interim Financial Statements
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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
   
 ITEM 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Internal Control over Financial Reporting
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PART II  OTHER INFORMATION
 
 ITEM 1. Legal Proceedings
  
 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 ITEM 3. Defaults Upon Senior Securities
  
 ITEM 4. Submission of Matters to a Vote of Securities Holders
  
 ITEM 5. Other Information
 CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
   
    
    general economic conditions,
    
    the effectiveness of our planned advertising, marketing and promotional campaigns,
    
    physician and patient acceptance of our products and services, including newly introduced products,
    
    competition among addiction treatment centers,
    
    anticipated trends and conditions in the industry in which we operate, including regulatory changes,
    
    development of new treatment modalities,
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
    
    our future capital needs and our ability to obtain financing, and
    
    other risks and uncertainties as may be detailed from time to time in our public announcements and
filings with the SEC.
  
 ITEM 6. Exhibits
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SIGNATURES
  CLEARANT, INC.Date: November 14, 2005
    By:
    /s/ ALAIN DELONGCHAMPAlain DelongchampChief Executive Officer Date: November 14, 2005
    By:
    /s/ JON GARFIELDJon GarfieldChief Financial Officer 10