**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-K/A**


**AMENDMENT
      NO. 1**





**x** **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**


**For
      the fiscal year ended October 31, 2007**


**or**


o
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT
                1934**


**From
      the transition period from_____to ________**


**Commission
      File Number 0-26670**





**NORTH
      AMERICAN SCIENTIFIC, INC.**


(Exact
      name of Registrant as specified in its charter)


**Delaware**
              (State
                or other jurisdiction of
              incorporation
                or organization)
            **51-0366422**
              (I.R.S.
                Employer
              Identification
                No.)





**20200
      Sunburst Street, Chatsworth, CA 91311**


(Address
      of principal executive offices)





**(818) 734-8600**


(Registrant's
      telephone number, including area code)





Securities
      registered pursuant to Section 12(b) of the Act:


**Title
                  of Each Class**
              **Name
                  of Each Exchange on Which
                  Registered****Common
                  Stock, par value $0.01 per
                  share**
              **The
                  NASDAQ Stock Market
                  LLC**





Securities
      registered pursuant to Section 12(g) of the Act: **None**





Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act.


o Yes x No


Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Act.


o Yes x No


Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
      during the preceding 12 months (or for such shorter period that the
      registrant was required to file such reports), and (2) has been subject to
      such filing requirements for the past 90 days. x Yes o No


Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein, and will not be contained, to the
      best of Registrant's knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any
      amendment to this Form 10-K. o


Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company.
      See
      definition of “accelerated filer” and “large accelerated filer” or “smaller
      reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934. o Large Accelerated Filer o Accelerated
      Filer o Non-Accelerated
      Filer x Smaller
      reporting company


Indicate
      by check mark whether registrant is a shell company (as defined in Rule 12b-2
      of
      the Act. o Yes x No


The
      aggregate market value of voting stock held by non-affiliates of the Registrant
      was approximately $33.8 million (based upon the price at which the common stock
      was last sold, as of April 30, 2007, the last business day of the Registrant’s
      most recently completed second fiscal quarter).


As
      of
      February 15, 2008, approximately 92,403,471 shares of the Registrant's Common
      Stock, $.01 par value per share, were outstanding.

















**NORTH
      AMERICAN SCIENTIFIC, INC.**





**Table
      of Contents**





**Form 10-K/A**





**Page****PART
                III**Item
                10.
            Directors,
                Executive Officers and Corporate Governance
            3Item
                11.
            Executive
                Compensation
            6Item
                12.
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            17Item
                13.
            Certain
                Relationships and Related Transactions, and Director
                Independence
            19Item
                14.
            Principal
                Accounting Fees and Services
            20**PART
                IV**Item
                15.
            Exhibits,
                Financial Statement Schedules
            21Signatures
            22





**Explanatory
      Note:**




North
      American Scientific, Inc. (the “Company”) is filing this Amendment No. 1 to its
      Annual Report on Form 10-K for the fiscal year ended October 31, 2007, as
      originally filed with the Securities and Exchange Commission on January 29,
      2008
      (the “Original Form 10-K”), to add information required in Part III of the
      Company’s Annual Report on the Original Form 10-K. There are no changes to the
      Company’s financial statements as originally filed. There are also no changes to
      the disclosures in the Original Form 10-K, except that this Amendment No. 1
      amends and restates, in their entirety, Items 10 through 14 of Part III of
      the
      Original Form 10-K. This Amendment No. 1 continues to speak as of the date
      of
      the Original Form 10-K, and the Company has not updated the disclosure contained
      herein to reflect any events that occurred at a later date.




2




**PART III**




**Item
      10.****DIRECTORS
      EXECUTIVE OFFICERS****AND
      CORPORATE GOVERNANCE**




**Name**
            
            **Position**
            
            **Age**Directors:Dr.
                Gary N. Wilner
            
            Chairman
                of the Board of Directors
            
            67John
                B. Rush
            
            President,
                Chief Executive Officer and Director
            
            49L.
                Michael Cutrer
            
            Executive
                Vice President, Chief Technology Officer and Director
            
            51Dr.
                Wilfred E. Jaeger
            
            Director
            
            51John
                M. Sabin
            
            Director
            
            53Richard
                A. Sandberg
            
            Director
            
            64Nancy
                J. Wysenski
            
            Director
            
            50Roderick
                A.Young
            
            Director
            
            64Non-Director
                Officers:Troy
                A. Barring
            
            Senior
                Vice-President & Chief Operating Officer
            
            48James
                W. Klingler
            
            Senior
                Vice-President & Chief Financial Officer
            
            60







The
      terms
      of all directors will expire at the next annual meeting of the stockholders,
      or
      when their successors are elected and qualified. Directors are elected each
      year, and all directors serve one-year terms. Officers serve at the pleasure
      of
      the Board of Directors. On June 6, 2006, we entered into a Securities Purchase
      Agreement with Three Arch Partners whereby we provided the right to Three Arch
      Partners to designate two nominees who are reasonably acceptable to us to serve
      on the Board of Directors. If at any time, Three Arch Partners owns less than
      3,500,000 shares (including shares of common stock issuable upon exercise of
      warrants, and as adjusted for stock splits, stock dividends and
      recapitalization), but more than 2,000,000 shares, Three Arch Partners would
      then have the right to designate one nominee who is reasonably acceptable to
      us
      to serve on the Board of Directors. In that case, one of the designees must
      resign from the Board effective immediately. Our obligations pursuant to the
      Securities Purchase Agreement terminates if at any time Three Arch Partners
      owns
      less than 2,000,000 shares. If Three Arch Partners owns less than 2,000,000
      shares at any time, any director previously nominated by Three Arch Partners
      is
      obligated to resign from the Board immediately. On June 13, 2006, the Board
      elected the two designees of Three Arch Partners, Dr. Jaeger and Mr. Young,
      both
      of whom continue to serve on the Board.




On
      December 12, 2007, we entered into a Securities Purchase Agreement with Three
      Arch Partners whereby, at or by the time of the our next annual stockholders
      meeting, we shall decrease the number of members of our Board of Directors
      from
      nine (9) members to seven (7) members and the Board of Directors shall include
      at least one (1) representative from Three Arch Partners (the “Three Arch
      Partners Board Member”) and two (2) new independent members (the “New
      Independent Board Members”) with relevant industry experience. The Three Arch
      Partners Board Member shall be reimbursed for all out-of-pocket expenses related
      to attending meetings of the Board of Directors. In addition if our Board
      members receive any additional fees or compensation, Three Arch Partners shall
      be entitled to equivalent payment. We further covenant and agree to use
      commercially reasonable efforts to place the Three Arch Partners Board Member
      on
      the slate of directors presented to its stockholders at each annual meeting
      at
      which directors are elected and to place the New Independent Board Members
      on
      the slate of directors presented to its stockholders at the next annual meeting
      at which directors are elected, in all cases subject to compliance with relevant
      Nasdaq rules and regulations and subject to the approval of such nominees by
      the
      Nominating and Corporate Governance Committee of the Board of Directors. If
      the
      Nominating and Corporate Governance Committee of the Board of Directors does
      not
      approve any proposed Three Arch Partners Board Member, Three Arch Partners
      shall
      be entitled to propose another candidate who shall be reasonably acceptable
      to
      us. Our obligations under the Securities Purchase Agreement with respect to
      the
      Three Arch Partners Board Member shall terminate in their entirety if at any
      time Three Arch Partners beneficially owns less than 5,000,000 shares of Common
      Stock (including shares of Common Stock issuable upon exercise of warrants,
      and
      as appropriately adjusted for stock splits, stock dividends and
      recapitalizations), in such case, the Three Arch Partners Board Member shall
      resign from the Board effective immediately.




3





There
      are
      no other arrangements or understandings between us and any other person pursuant
      to which such person was or is to be selected as a director, executive officer
      or nominee. We have, however, entered into employment agreements with three
      of
      our executive officers, which are described on page 14 below under the heading
      “Potential Payments Upon Termination or Change-in-Control.”




**Biographical
      Information**




**Dr.
      Gary N. Wilner** has served on our Board of Directors since December,
      2002 and Chairman of the Board of Directors since March 2006. He retired from
      the practice of medicine in January 2005, having been an academic and
      consultative cardiologist for the past 30 years. Dr. Wilner serves as a Trustee
      and Chairman of the Board of Trustees of the Oakmark Family of Funds. He has
      had
      prior service as a Director of the American Heart Association and the Albert
      Einstein Peace Prize Foundation.




**John
      B. Rush** has
      served as our President and Chief Executive Officer since April 2007, and became
      a Director in June, 2007. Previously, Mr. Rush has served since 2002 as
      President and Chief Executive Officer of Sanarus Medical, a leading developer
      of
      minimally invasive medical devices for diagnosing and treating breast disease.
      Prior to joining Sanarus, Mr. Rush was President and Chief Executive Officer of
      Micro Therapeutics, Inc. (now owned by ev3, Inc.), a publicly traded medical
      device company focused on the treatment of cerebral and peripheral vascular
      disorders worldwide. Mr. Rush has over twenty-four years of experience in the
      medical device sector, with a background in sales, marketing and management
      at
      such companies as Scimed Life Systems/Boston Scientific and
      Cilco/CooperVision/Alcon Surgical.




**L.
      Michael Cutrer** served
      as our President and Chief Executive Officer since 1990, and transitioned from
      those positions to become our Executive Vice President and Chief Technology
      Officer upon the appointment of Mr. Rush in April 2007. Previously,
      Mr. Cutrer was a Manager of Isotope Products Laboratory, Inc., a
      radioisotope manufacturing company, where he was responsible for industrial
      product manufacturing, research and development.




**Dr.
      Wilfred E. Jaeger** has
      served on our Board of Directors since June 2006. Dr. Jaeger is the cofounder
      of **** Three
      Arch Partners. Previously he was a general partner at Schroder Ventures. Dr.
      Jaeger began his medical career in private practice. He was subsequently
      recruited by Chec Medical, a venture capital backed ambulatory care startup
      in
      Seattle. He subsequently attended business school and began working in venture
      capital in 1989. He has since been an active early stage investor in numerous
      successful biotechnology, healthcare service, and medical device companies.
      Dr.
      Jaeger serves on the boards of many private healthcare companies, and he
      currently serves as a director of Threshold Pharmaceuticals, Inc.




**John
      M. Sabin** has
      served on our Board of Directors since August 2005. He has served as Chief
      Financial Officer and General Counsel of Phoenix Health Systems, a health care
      IT consulting and outsourcing firm, since October 2004.  From January 2000
      to October 2004, he served as Chief Financial Officer and General Counsel of
      NovaScreen Biosciences Corporation, a developer of biotechnology-based tools
      to
      accelerate drug discovery and development.  From September 1999 to January
      2000, he was a business consultant.  From May 1998 to September 1999, he
      served as Executive Vice President and Chief Financial Officer of Hudson Hotels
      Corporation, a limited service hotel development and management company. 
Prior to May 1998, he was an executive at Vistana, Inc., Choice Hotels
      International, Inc., Manor Care Inc. and Marriott International, Inc. Mr.
      Sabin has served as a Trustee of Hersha Hospitality Trust, a publicly
      traded hospitality real estate investment trust since 2003, and as a Trustee
      of
      Prime Group Realty Trust, a real estate investment trust since 2005.




**Richard
      A. Sandberg** has
      served on our Board of Directors since August 2005. He is currently the Chief
      Financial Officer of Oxford Immunotec, Ltd, a T-cell diagnostics company
      developing tests for tuberculosis and other infectious diseases. From 2002
      to
      2007, he served as Chief Financial Officer of MZT Holdings, Inc. (formerly
      Matritech, Inc.), a publicly traded developer and manufacturer of cancer
      diagnostic test products, and has also been on that company’s board of directors
      since 1999 (excluding the period from June to September 2002).  Mr.
      Sandberg has also served as Manager and Chief Financial Officer of Battery
      Asset
      Management, LLC, a firm specializing in foreign exchange transactions. 
From 1997 to 2001, Mr. Sandberg served as Chairman of the Board of Lifecodes
      Corporation, a manufacturer of DNA test kits and a provider of DNA testing
      services and from May 1997 to September 1998, as its Chief Financial
      Officer.  From 1983 to 1997, Mr. Sandberg held financial and operating
      positions at Dianon Systems, Inc., an anatomic pathology testing and
      genetic and clinical chemistry testing company he founded in 1983, including
      Chief Executive Officer and Chief Financial Officer.  Since 2003, Mr.
      Sandberg has been a director of Ethan Allen Interiors, Inc., a publicly traded
      home furnishings company.




4




**Nancy
      J. Wysenski** **** has
      served on our Board of Directors since May 2004. Ms. Wysenski has
      been
      the Chief Operating Officer of Endo Pharmaceuticals since September 2007. From
      August 1999 to October 2006 she was
      the
      President and a founding member of EMD Pharmaceuticals, Inc., a United States
      pharmaceutical company owned by Merck KGaA. Ms. Wysenski also served as a member
      of the Merck KGaA Ethical Pharmaceuticals Executive Committee and managed their
      ethical pharmaceutical product portfolio. Ms. Wysenski was also responsible
      for
      Dey Laboratories, a specialty pharmaceutical company owned by Merck KGaA focused
      on the development of drugs used in the treatment of respiratory diseases and
      allergies. Prior to joining and founding EMD Pharmaceuticals, Inc. in August
      1999, Ms. Wysenski was the Senior Vice President of Operations at NetGenics
      from
      1998 to 1999. Prior thereto, Ms. Wysenski held a number of positions at Astra
      Merck, culminating at Vice President of Field Sales. Prior to joining Astra
      Merck in 1990, Ms. Wysenski held a number of positions at Merck Human Health
      from 1984 to 1990.




**Roderick
      A. Young** has
      served on our Board of Directors since June 2006. Mr. Young has been a Venture
      Partner of Three Arch Partners since May 2006. From February 2003 to July 2005,
      Mr. Young was President and CEO of Vivant Medical, Inc., a venture-backed
      medical device company that was acquired by Tyco International, Ltd. Prior
      to
      his tenure at Vivant, Mr. Young was President and CEO of Targesome, Inc., a
      biotechnology company, from October 1998 to October 2002. Prior to Targesome,
      Mr. Young also served as Chairman and CEO of General Surgical Innovations,
      President & CEO of Focus Surgery, President of Toshiba America MRI and
      President and COO of Diasonics.




**Troy
      A. Barring** has
      served as our Senior Vice-President and Chief Operating Officer since September
      2007. Previously, Mr. Barring has served since 2001 in a number of positions
      with Biosense Webster, a Division of Johnson and Johnson, including Vice
      President, World Wide Services, Vice President of Operations, and Senior Vice
      President of Research and Development and Operations. Mr. Barring has over
      13
      years of management experience in the medical device sector, with a background
      in manufacturing, operations, and research and development at such companies
      as
      Scimed Life Systems, a Division of Boston Scientific, and Sorin
      Biomedical.





**James
      W. Klingler** has
      served as our Senior Vice President and Chief Financial Officer since July
      2004.
      Previously, he was Vice President-Finance and Chief Financial Officer of Troy
      Group, Inc., a provider of secure check printing products and wireless
      connectivity solutions, from January 2002 to July 2004. From
      February 2001 to November 2001, he served as Senior Vice President,
      Business Operations and Chief Financial Officer of Trinagy, Inc., a
      software company that was merged into Hewlett-Packard Company. In prior
      positions, Mr. Klingler was Vice President, Finance and Administration of
      Triconex Corporation, a supplier of products, systems and services for safety,
      critical control and turbomachinery applications and a subsidiary of Invensys
      plc, from February 1999 to February 2001, and Vice President and Chief
      Financial Officer of Wilshire Technologies Inc., a company that
      manufactures polyurethane products, from October 1994 to
      February 1999.




**Michael
      C. Ryan** served
      as the Senior Vice President and General Manager of our NOMOS Radiation Oncology
      Division from January 2006 until it was sold in September 2007.
 Previously, from 1992 through 2005, he served in a variety of positions
      with InterV (now known as Angiotech), originally as Vice President of Sales
      & Marketing, then as Senior Vice President of Sales & Marketing, and
      lastly as Executive Vice President of Business Development. 
InterV manufactures and sells image guided, interventional medical devices
      for radiology, oncology, cardiology, and endo-vascular surgery.  Prior to
      InterV, Mr. Ryan held senior management positions, in sales, marketing, business
      development, and general management, with several companies, including Johnson
      & Johnson, Medtronic, Healthdyne, NAMIC, and Coeur Laboratories.




5




**Section 16(a) Beneficial
      Ownership Reporting Compliance**




Section 16(a) of
      the Securities Exchange Act of 1934 (the “Act”) requires our officers, directors
      and persons who own more than 10% of any class of our securities registered
      under Section 12(g) of the Act to file reports of ownership and
      changes in ownership with the SEC. Officers, directors and greater than 10%
      stockholders are required by SEC regulation to furnish us with copies of all
      Section 16(a) forms they file.




Based
      solely on a review of copies of such reports furnished to us during the fiscal
      year ended October 31, 2007, we believe that all persons subject to the
      reporting requirements pursuant to Section 16(a) complied with all
      applicable reporting requirements.




**Board
      of Directors Meetings and Committees**




Our
      Board
      of Directors held 9 meetings during the fiscal year ended October 31, 2007,
      and acted by unanimous written consent on 3 occasions. All of the directors
      who
      were on the Board during fiscal year 2007 attended at least 75% of the total
      number of meetings of the Board of Directors and committees on which they
      served. The Board of Directors has three standing committees: the Audit
      Committee, the Compensation Committee, and the Nominating and Corporate
      Governance Committee.




*Audit
      Committee.* During
      the fiscal year ended October 31, 2007, the members of the Audit Committee
      were
      Mr. John Sabin (Chairman), Mr. Richard Sandberg, and Dr. Wilner, each of whom
      is
“independent” as defined under current Rule 4200(a)(15) of the Nasdaq
      listing standards. During the fiscal year ended October 31, 2007, the Audit
      Committee met on 10 occasions.




*Audit
      Committee Financial Experts.* ** The
      Board
      of Directors has determined that John M. Sabin and Richard A. Sandberg each
      qualify as an “audit committee financial expert” as defined under the applicable
      Securities and Exchange Commission rules.




*Compensation
      Committee.* ** From
      November 1, 2006 to June 4, 2007, the Compensation Committee consisted of Ms.
      Nancy Wysenski (Chairperson), Dr. Jonathan Gertler, and Mr. Richard Sandberg.
      From June 5, 2007 through October 31, 2007, the Compensation Committee consisted
      of Mr. Richard Sandberg (Chairman), Mr. John Friede, and Ms. Nancy Wysenski,
      all
      non-employee Directors who meet the Nasdaq listing standards for “independence”.
      The Compensation Committee oversees the Company’s executive compensation
      programs and policies and is responsible for determining grants of options
      to
      purchase common stock under the North American Scientific, Inc. 2006 Stock
      Plan. During the fiscal year October 31, 2007, the Compensation Committee met
      on
      6 occasions.




*Nominating
      and Corporate Governance Committee.* The
      Nominating and Corporate Governance Committee is responsible for recommending
      candidates for election to the Board of Directors and reviewing matters of
      corporate governance. The Nominating and Corporate Governance Committee will
      consider director nominees recommended by stockholders if properly submitted.
      This Committee currently consists of Ms. Wysenski (Chairperson), Mr. Sabin,
      and
      Dr. Wilner, each of whom is “independent” under current Nasdaq listing
      standards. During fiscal year 2007, the Committee met on 4
      occasions.




We
      have a
      written Code of Ethics that applies to all employees, including our Chief
      Executive Officer, Chief Financial Officer, and Corporate Controller. The full
      text of our Code of Ethics is published on our website at www.nasmedical.com under
      the “Investor Center-Corporate Governance” caption. We will disclose any future
      amendments to, or waivers from, certain provisions of the Code of Ethics
      applicable to our Chief Executive Officer, Chief Financial Officer and Corporate
      Controller on our website within four business days following the date of such
      amendment or waiver.




**Item
      11.**  **EXECUTIVE
      COMPENSATION**




**COMPENSATION
      DISCUSSION AND ANALYSIS**




**General**




The
      following discussion and analysis of compensation arrangements of our named
      executive officers for fiscal year 2007 should be read together with the
      compensation tables and related disclosures set forth below.




6




**Our
      Compensation Objectives**


n




The
      primary objective of our executive compensation program is to attract and retain
      talented executives to lead our company and create value for our stockholders.
      Executive compensation generally consists of a base salary, an annual short-term
      incentive payment based upon achievement of personal and/or corporate objectives
      and long-term equity-based incentive awards, which to date have generally been
      in the form of stock options. The equity component of our compensation is
      designed to align executive officers compensation with the goal of creation
      of
      long-term value for our stockholders. The current goal of our compensation
      program is to attract and provide incentives to a new management team to lead
      the process of creating a profitable company and rebuilding shareholder value.
      In light of the risks associated with these goals, we believe we must offer
      financial opportunities which, at a minimum, are competitive with other
      companies in the medical device industry.




**Role
      of Compensation Committee**




Our
      Compensation Committee was appointed by our Board of Directors, and consists
      entirely of directors who are independent directors under applicable Nasdaq
      regulations, “outside directors” for purposes of Section 162(m) of the
      Code, and “non-employee directors” for purposes of Rule 16b-3 under the
      Securities Exchange Act of 1934, as amended, or Exchange Act. Our Compensation
      Committee reviews and recommends to our Board of Directors our executive
      compensation and benefit policies. Our Compensation Committee is responsible
      for, among other things, analyzing individual and corporate achievements and
      recommending to our Board of Directors appropriate compensation packages for
      our
      named executive officers. In addition, the Compensation Committee administers
      our equity-based compensation plans.




Our
      Compensation Committee solicits input from our chief executive officer (“CEO”)
      in determining executive compensation, in particular with respect to salary
      and
      option grant awards to our executive officers other than the CEO. While the
      CEO
      discusses his recommendations for other executives with the Compensation
      Committee, he does not participate in deliberation or determination of his
      own
      compensation. None of our other executive officers participate in the
      Compensation Committee’s discussions regarding executive compensation. In fiscal
      2007, the Compensation Committee accepted the CEO’s recommendations for
      executive officer compensation in all material respects. The Compensation
      Committee does not delegate any of its functions to others in determining
      executive compensation, but is authorized to engage consultants to advise it
      with respect to compensation related matters as it deems appropriate. The
      compensation of our executive officers is ultimately approved by our Board
      of
      Directors, upon recommendation of the Compensation Committee. The CEO abstains
      from voting with respect to his compensation. In fiscal 2007, the Board of
      Directors approved the Compensation Committee’s recommendations for executive
      officer compensation without change.




We
      believe that in order to attract and retain executive talent needed to rebuild
      shareholder value, it may be necessary to compensate our executive officers
      at a
      level at least comparable to the compensation amounts provided to executives
      at
      comparable medical device companies. The Compensation Committee relies on their
      experience with other medical device companies and publicly available data
      relating to compensation of executives at other medical device companies to
      establish compensation for our executive officers. Some of the publicly traded
      companies used as comparable companies in the last year are set forth below
      under “Compensation Components — Base Salary.”




We
      believe the components of our current compensation program, which include cash
      salary, short-term cash incentive payments and long term equity awards are
      generally consistent with the compensation components of other comparable
      medical device companies, including those identified under “Compensation Components —
      Base Salary,” although we generally do not benchmark the type of compensation
      awards with those of other companies.




The
      compensation program is administered with guidelines and policies intended
      to
      provide adequate incentives from and consistent approaches to each element
      of
      compensation discussed above. The role of each element of compensation changes
      from time to time, and the Compensation Committee does not have any long-term
      policies or guidelines for allocating compensation between short-term and
      long-term incentive compensation, or between cash and non-cash compensation.
      In
      determining the amount and mix of compensation elements and whether each element
      provides the correct incentives and rewards for performance consistent with
      our
      short and long-term goals and objectives, our Compensation Committee relies
      on
      its judgment in establishing the appropriate balance between these elements
      in
      light of changes in the current business environment, and the Company’s present
      business financial circumstances, goals and objectives.




7




**Compensation
      Components**




Executive
      compensation currently consists of the following components:




***Base
      Salary***




We
      generally determine our executive officers’ salaries based on job
      responsibilities, individual experience and expected level of contribution
      and
      take into account salaries of executive officers at comparable companies within
      the medical device industry.




In
      fiscal
      2007, however, our goal was to rapidly attract a new management team to lead
      our
      company and, in that process, we focused more on attracting appropriately
      qualified individuals reflecting a willingness to pay such individuals amounts
      sufficient to convince them to join the Company, and less on how comparable
      their compensation was to executive officers at competitive companies. In
      recruiting executives other than the CEO, we negotiated base salaries by
      starting with compensation data of comparable officers’ salaries at other
      publicly traded medical device companies of similar size, including Theragenics,
      IsoRay, and Endocare. In addition, we also considered information regarding
      compensation at private medical device firms which is available to us. Because
      our goal was to rapidly attract a new management team, we also took into
      consideration other factors such as the executive officer’s experience level,
      the cost of living differences between the areas where our executives are
      located and the locations of the peer companies, the needs, risks and rewards
      of
      our current business strategy and financial structure, as well as our desire
      to
      attract and retain high quality individuals. The Compensation Committee
      recognized that its approach could result in executive base salaries that would
      be higher than the median level of base salaries at peer companies for
      comparable positions.




During
      the second quarter of fiscal 2007, we concluded a search for a new CEO with
      the
      hiring of Mr. John Rush. The compensation package offered to Mr. Rush was
      structured by taking into account similar factors to those discussed above.
      In
      particular, the equity compensation award was structured in a manner intended
      to
      tie its value to stockholder success, thereby aligning Mr. Rush’s interest with
      those of our stockholders. Mr. Rush’s final compensation, as reflected in the
      employment agreement entered into on March 22, 2007, was the result of
      arms-length negotiation between Mr. Rush and our Board of Directors. As part
      of
      Mr. Rush’s initial compensation package, he receives an annual base salary of
      $350,000.





Our
      Compensation Committee generally reviews the salaries of our executives annually
      at the beginning of each calendar year and recommends changes in salaries to
      our
      Board of Directors based primarily upon comparative market data, significant
      changes in responsibilities during the prior calendar year and individual
      performance.




***Short-Term
      Incentive Program***




Our
      Compensation Committee believes that cash-based annual incentive payments for
      achievement of defined objectives that create value in our Company align the
      executive’s compensation with the interests of our stockholders.




Our
      executive officers, including the CEO, are eligible to receive cash-based
      incentive payments based upon a target bonus percentage of salary (determined
      by
      the Compensation Committee or, in some instances, by a management contract
      with
      the employee). In fiscal 2007, half of the target bonus percentage was
      multiplied by a factor based upon the achievement of corporate objectives,
      and
      the other half was multiplied by a factor based upon the achievement of personal
      objectives. For example, if an executive with a 30% target bonus achieved 60%
      of
      his personal objectives and the Company achieved 80% of its corporate
      objectives, that executive would receive 30% of his target bonus (60% x 50%)
      for
      achievement of his personal objectives and would receive 40% of his target
      bonus
      (80% x 50%) as a result of the Company meeting its corporate objectives, for
      a
      total bonus of 21% ([30% + 40%] x 30%) of his base salary.





*Corporate
      Objectives*





Each
      year, the CEO recommends corporate objectives to our Compensation Committee,
      which are discussed and modified and then submitted to the Board of Directors
      for review and approval. The Compensation Committee and the CEO discuss and
      assign weights to the corporate objectives based on their level of importance
      to
      our operating plan and corporate development. In fiscal 2007, the Compensation
      Committee accepted the CEO’s recommendations, and the Board of Directors
      approved the Compensation Committee’s recommendations. In establishing the
      corporate objectives, particularly the financial objectives, the Compensation
      Committee believed that each of these objectives would enhance shareholder
      value
      if they were achieved.




8




In
      fiscal
      2007, the components of our corporate objectives (which, if entirely achieved,
      would entitle executive officers to at least 50% of their target bonus), along
      with their relative weight, were as follows:




Fiscal
                2007 Corporate Objectives
            
            
            **Weight**Annual
                revenue targets
            
            
            15
            %Operating
                loss targets
            
            
            10
            %Undertake
                strategic solution for NOMOS
            
            
            4
            %Raise
                targeted amounts of new equity
            
            
            3
            %Complete
                numerous ClearPath milestones
            
            
            18
            %Total
            
            
            50
            %





At
      the
      end of fiscal 2007, the Compensation Committee evaluated the performance against
      each of these objectives and determined that the performance of the management
      team in meeting those objectives would entitle each officer to receive 22%
      of
      his target bonus based upon achieving corporate objectives.





*Personal
      Objectives*





After
      the
      corporate objectives are approved by the Compensation Committee and reviewed
      by
      the Board of Directors, the Compensation Committee establishes personal
      objectives for the CEO, and the CEO establishes personal objectives for each
      officer of the Company for that fiscal year. The personal objectives are
      generally (but not exclusively) translations of the corporate objectives into
      more specific achievements related to that part of our business for which the
      officer has primary responsibility.




Historically,
      and in 2007, the performance of the CEO was reviewed by our Compensation
      Committee against his established personal objectives. The CEO’s personal
      objectives for his period of service in 2007 related to identifying and
      attracting both executives and directors with appropriate experience to lead
      the
      process of rebuilding the Company and its shareholder value, to accelerate
      the
      pace of new product development and to reduce the risks of such programs, to
      complete a strategic solution for our NOMOS subsidiary and to complete an equity
      financing. The Compensation Committee determined that the achievements of Mr.
      Rush entitled him to receive 44% of his target bonus with regard to achieving
      his personal objectives.




The
      performance of our other executive officers was reviewed by the CEO and by
      our
      Compensation Committee against the established personal objectives at the same
      time as that of our CEO. The CEO evaluates the degree of achievement of the
      other executive officer’s personal objectives, as well as a subjective
      determination of the officer’s overall contribution to our company, and then
      recommends a personal bonus achievement percentage for the other executive
      officers. In some instances involving outstanding performance or contribution
      by
      an individual, he has recommended a personal bonus achievement percentage of
      more than the 50% normally allocated for rewarding personal achievement. In
      2007, the Compensation Committee approved the CEO’s recommendations in all
      material respects and the Board of Directors approved the Compensation
      Committee’s recommendations without change.




Based
      upon the evaluation of the degree of achievement of the corporate and personal
      objectives, the Board of Directors approved, based upon the recommendation
      of
      the Compensation Committee, cash incentive payments for Messrs. Rush, Cutrer,
      Klingler and Ryan equal to 66% (22% corporate, 44% personal), 27% (22%
      corporate, 5% personal), 78% (22% corporate, 56% personal), and 50% (22%
      corporate, 28% personal) of their respective target bonus amounts, which equates
      to 40%, 7%, 16% and 12% of their respective annual salaries. Mr. David N. King
      was not eligible for a bonus in 2007 due to his resignation from the Company
      on
      May 31, 2007.




***Long-Term
      Equity-Based Incentive Awards***




We
      believe that equity ownership in our company is important to provide our
      executive officers with long-term incentives to build value for our
      stockholders. Long-term equity can be awarded to executives by the Board of
      Directors in the form of stock options or restricted stock. Equity grants or
      awards are made to our executives by our Board of Directors at regularly
      scheduled meetings. The exercise price of our options are set at the closing
      price of our common stock on the date of the individual’s commencing employment
      or the date of grant. Each executive officer was provided with an option grant
      when they joined our company based upon their position with us, expected level
      of contribution and relevant prior experience. Historically, initial grants
      typically vest over four years, and no shares vest before the one year
      anniversary of the option grant, except under the terms of the CEO’s initial
      option grant the shares vest monthly from the date of the grant. We spread
      the
      vesting of our options over four years to compensate executives for their
      contribution over a period of time and to more properly align the executive’s
      interest with our stockholders’ interests.




9




In
      addition to the initial option grants, our Board of Directors has from time
      to
      time granted additional options to retain and provide incentives to some of
      our
      executives who have been with us for a number of years. Options are granted
      based on a combination of individual contributions to our performance, and
      on
      expectations of general corporate achievements. Additional option grants are
      not
      communicated to executives in advance and generally vest over a period of four
      years. While our Compensation Committee may benchmark our executive officers’
equity ownership against our peer companies in establishing equity grants for
      new hires, it does not generally do so in approving additional equity grants
      for
      existing executives.




In
      2007,
      i n
      addition to his base compensation and bonus, as an inducement to join as our
      CEO, Mr. Rush received an initial grant of 1.8 million options to purchase
      stock, priced at the fair market value of our stock on the date Mr. Rush began
      employment as the CEO. In addition, we agreed that, in the event that within
      24
      months of the effective date of our employment agreement with Mr. Rush, we
      issue
      additional shares of common stock in connection with raising capital in a
      private placement transaction, we would be required to grant options to Mr.
      Rush
      to acquire an additional number of shares of common stock equal to 3% of the
      number of shares issued in connection with such transaction.




From
      time
      to time, our Compensation Committee intends to assess the contribution of
      individual executives and the expectation for future performance by each
      executive, and as a result we may provide additional awards in the form of
      stock
      options or restricted stock based upon this assessment. We expect that we will
      continue to provide new employees with initial stock option grants in 2008
      to
      provide long-term compensation incentives.




***Other
      Benefits***




We
      have a
      401(k) plan for the benefit of all of our eligible employees, including the
      named executive officers. We provide for matching contributions under the 401(k)
      plan of up to 3% of base salary. We also provide health, dental, vision and
      life
      insurance and other customary employee assistance plans to all full-time
      employees, including the named executive officers.




**Accounting
      and Tax Considerations**




Effective
      January 1, 2006, we adopted the fair value provisions of Financial
      Accounting Standards Board Statement No. 123(R) (revised 2004),
“Share-Based Payment,” or SFAS 123(R). Under SFAS 123(R), we are
      required to estimate and record an expense for each award of equity compensation
      (including stock options) over the vesting period of the award.




10




Section 162(m)
      of the Code limits the amount that we may deduct for compensation paid to our
      CEO and to each of our four most highly compensated officers to $1,000,000
      per
      person, unless certain exemption requirements are met. Exemptions to this
      deductibility limit may be made for various forms of “performance-based
      compensation.” In the past, annual cash compensation to our executive officers
      has not exceeded $1,000,000 per person, so the compensation has been deductible.
      In addition to salary and bonus compensation, upon the exercise of stock options
      that are not treated as incentive stock options, the excess of the current
      market price over the option price, or option spread, is treated as compensation
      and accordingly, in any year, such exercise may cause an officer’s total
      compensation to exceed $1,000,000.





**Summary
      Compensation Table**




**Name and Principal Position**
            
            **Year**
            
            **Salary ($)**
            
            **Bonus ($)**
            
            **Stock**
              **Awards
                ($)**
            
            **Option
                Awards ($)**
            
            **Non-Equity
                Incentive Plan Compensa-tion ($)**
            
            **All
                Other Compensa**
              **-tion
                ($)**
            
            **Total
                ($)**John
                B. Rush (2)
            
            
            2007
            
            
            175,000
            
            
            72,904
            
            
            —
            
            
            1,167,120
            
            
            —
            
            
            —
            
            
            1,415,024*President
                and Chief*
            
            
            2006
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —*Executive
                Officer*
            
            
            2005
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —James
                W. Klingler
            
            
            2007
            
            
            236,120
            
            
            46,466
            
            
            —
            
            
            —
            
            
            —
            
            
            5,479
            
            
            288,065*Senior
                Vice President and*
            
            
            2006
            
            
            229,500
            
            
            20,000
            
            
            —
            
            
            70,353
            
            
            —
            
            
            5,300
            
            
            325,153*Chief
                Financial Officer*
            
            
            2005
            
            
            225,000
            
            
            17,000
            
            
            —
            
            
            —
            
            
            —
            
            
            2,800
            
            
            244,800—L.
                Michael Cutrer (3)
            
            
            2007
            
            
            310,340
            
            
            15,400
            
            
            —
            
            
            —
            
            
            —
            
            
            7,212
            
            
            332,952*Executive
                Vice**President*
            
            
            2006
            
            
            340,700
            
            
            30,000
            
            
            —
            
            
            81,176
            
            
            —
            
            
            7,600
            
            
            459,476*and
                Chief**Technology*
            
            
            2005
            
            
            334,000
            
            
            30,000
            
            
            —
            
            
            —
            
            
            —
            
            
            2,300
            
            
            366,300*Officer*David
                N. King (4)
            
            
            2007
            
            
            123,231
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            2,873
            
            
            126,104*Vice
                President,*
            
            
            2006
            
            
            155,000
            
            
            13,000
            
            
            —
            
            
            54,118
            
            
            —
            
            
            3,400
            
            
            225,518*General
                Counsel and*
            
            
            2005
            
            
            147,000
            
            
            5,500
            
            
            —
            
            
            —
            
            
            —
            
            
            1,500
            
            
            280,104*Corporate
                Secretary*
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            —Michael
                C. Ryan (5)
            
            
            2007
            
            
            205,779
            
            
            24,047
            
            
            —
            
            
            —
            
            
            —
            
            
            59,488
            
            
            289,314*Senior
                Vice**President,*
            
            
            2006
            
            
            163,200
            
            
            18,000
            
            
            —
            
            
            86,588
            
            
            —
            
            
            53,092
            
            
            320,880*General
                Manager*
            
            
            2005
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —*NOMOS
                Division*




(1)
            All
                Other Compensation consists of the Company’s contribution to such
                executive officer’s 401(k) plan, Company paid life insurance
                premiums, relocation payments, and severance
                payments.




(2)
            Mr. Rush
                began his employment on April 23,
                2007.




(3)
            Mr.
                Cutrer served as the Company’s President and Chief Executive Officer until
                April 23, 2007.




(4)
            Mr.
                King resigned from the Company on May 31,
                2007.




(5)
            Mr.
                Ryan began his employment on January 16, 2006, and ended his employment
                with the sale of NOMOS on September 17, 2007. All Other Compensation
                for
                Mr. Ryan also includes $49,278 of relocation expense in 2006, and
                $54,687
                of severance expense in 2007.




11





**Grants
      of Plan-Based Awards**





The
      following table sets forth certain information with respect to the options
      granted and potential payments under the 2006 Stock Plan and under a stand-alone
      grant outside of our 2006 Stock Plan during or for the fiscal year ended
      October 31, 2007 to each of our named executive officers listed in the summary
      Compensation Table as shown under the caption “Executive
      Compensation.”




**Name**
            
            **Grant
                Date**
            
            
            **Estimated**
                    **Future
                      Payouts**
                    **Under
                      Non-Equity**
                    **Incentive
                      Plan Awards**
            
            
            **All
                    Other Awards:**
                  **Number
                    of Securities**
                  **Underlying
                    Options**
            
            
            **Exercise
                    or**
                  **Base
                    Price of**
                  **Option
                    Awards**
            
            
            **Grant
                    Date Fair**
                  **Value
                    of Stock and**
                  **Option
                    Awards**(1)John
                B. Rush
            
            
            4/23/07
            
            
            $
            210,000
            
            
            
            1,800,000
            
            
            $
            1.16
            
            
            $
            1,167,120




(1)
                Amounts represent the estimated total fair value of stock options
                granted
                in 2007 under SFAS 123(R).





**Outstanding
      Equity Awards Value at Fiscal Year-End**





The
      following table includes certain information with respect to the value of all
      unexercised options previously awarded to the executive officers named above
      at
      the fiscal year end, October 31, 2007. The number of options held at October
      31,
      2007 includes options granted under the
      1996
      Stock Option Plan,the 2006 Stock Plan,
      and a
      stand-alone grant outside of our 2006 Stock Plan.




**Option
                  Awards****Name**
              
              
              **Number
                  of**
                **Securities**
                **Underlying**
                **Unexercised**
                **Options**
                Exercisable
              
              
              **Number
                  of**
                **Securities**
                **Underlying**
                **Unexercised**
                **Options**
                  **Unexercisable**(1)
              
              **Option**
                  **Exercise
                    Price ($)**
              
              **Option**
                **Expiration**
                **Date**(1)John
                  B. Rush
              
              
              
              75,000
              
              
              
              525,000
              
              **(2)**
              
              1.16
              
              
              
              4/23/2017150,000
              
              
              
              1,050,000
              
              **(2)**
              
              1.16
              
              
              
              4/23/2017James
                  W. Klingler
              
              
              
              37,500
              
              
              
              12,500
              
              
              
              7.49
              
              
              
              7/26/20148,125
              
              
              
              24,375
              
              
              
              2.23
              
              
              
              3/16//2013—
              
              
              
              32,500
              
              **(3)**
              
              3.35
              
              
              
              3/16/2014David
                  N. King
              
              
              
              5,000
              
              
              
              —
              
              
              
              7.00
              
              
              
              11/30/20082,500
              
              
              
              —
              
              
              
              6.25
              
              
              
              5/6/20097,500
              
              
              
              —
              
              
              
              16.75
              
              
              
              5/26/20108,500
              
              
              
              —
              
              
              
              10.80
              
              
              
              9/28/20118,500
              
              
              
              —
              
              
              
              7.60
              
              
              
              9/20/20128,500
              
              
              
              —
              
              
              
              7.17
              
              
              
              10/31/20136,250
              
              
              
              18,750
              
              
              
              2.23
              
              
              
              3/16/2013—
              
              
              
              25,000
              
              **(3)**
              
              3.35
              
              
              
              3/16/2014Michael
                  C. Ryan
              
              
              
              10,000
              
              
              
              —
              
              
              
              2.23
              
              
              
              3/16/2013L.
                  Michael Cutrer
              
              
              
              30,000
              
              
              
              —
              
              
              
              23.50
              
              
              
              4/3/200870,000
              
              
              
              —
              
              
              
              6.125
              
              
              
              3/19/200955,000
              
              
              
              —
              
              
              
              6.25
              
              
              
              5/6/200996,000
              
              
              
              —
              
              
              
              7.938
              
              
              
              11/9/200975,000
              
              
              
              —
              
              
              
              16.75
              
              
              
              5/26/2010100,000
              
              
              
              —
              
              
              
              7.31
              
              
              
              3/2/200155,000
              
              
              
              —
              
              
              
              10.80
              
              
              
              9/28/201160,000
              
              
              
              —
              
              
              
              10.85
              
              
              
              3/11/201265,000
              
              
              
              —
              
              
              
              7.60
              
              
              
              9/20/2012100,000
              
              
              
              —
              
              
              
              7.17
              
              
              
              10/31/201336,000
              
              
              
              —
              
              
              
              10.01
              
              
              
              2/25/20149,375
              
              
              
              28,125
              
              
              
              2.23
              
              
              
              3/16/2013—
              
              
              
              37,500
              
              **(3)**
              
              3.35
              
              
              
              3/16/2014




(1)
            
            Except
                where otherwise noted, all options expire ten years from the date
                of grant
                and option shares vest at the rate of 25% on the first anniversary
                of the
                option grant and annually thereafter, such that options are fully
                vested
                upon the fourth anniversary of the option grant date. In addition,
                the
                vesting of options may accelerate upon a change in control of the
                Company.(2)
            
            Option
                shares vest at the rate of 1/48 per month, such that options are
                fully
                vested upon the fourth anniversary of
                the option grant date. In addition, the vesting of options may accelerate
                upon a change in control of the Company.(3)
            
            Option
                shares vest at the rate of 25% on the second anniversary of the option
                grant and 25% annually thereafter, only if certain market performance
                conditions are met.




12




**Option
      Exercises for 2007**




There
      were no options exercised by our named executive officers in fiscal 2007.




**Director
      Compensation**




Directors
      who also serve as our employees of the Company or of our subsidiaries receive
      no
      separate compensation for serving as Directors or as members of any committees
      of the Board of Directors. Each non-employee Director receives a quarterly
      payment of $5,000, and receives $1,250 per Board or committee meeting if he
      attends in person or $500 per meeting if he participates by telephone. Directors
      may be reimbursed for certain expenses incurred in connection with attending
      Board or committee meetings. In addition, the Chairman of the Board of Directors
      receives compensation of $40,000 per year (in lieu of the $5,000 quarterly
      payment); the Chairman of the Audit Committee receives $5,000 per year; the
      Chairman of the Compensation Committee receives $2,500 per year; and the
      Chairman of the Nominating and Corporate Governance Committees receives $2,500
      per year.




Each
      individual who is first elected or appointed as a non-employee director shall
      automatically be granted, on the date of such initial election or appointment,
      a
      non-statutory stock option to purchase 25,000 shares of Common Stock. On the
      date of each Annual Stockholders Meeting each individual who is re-elected
      to
      serve as a non-employee director is automatically granted a non-statutory stock
      option to purchase 15,000 shares of Common Stock, except for the Chairman of
      the
      Board, who is automatically granted a non-statutory stock option to purchase
      25,000 shares of Common Stock. The annual grant of non-statutory stock options
      is only given to those non-employee directors who have served at least six
      months. In lieu of receiving the non-statutory stock options, each non-employee
      director may elect to receive a grant of one share of restricted Common Stock
      for every three shares of Common Stock underlying such stock option. To date,
      no
      non-employee director has elected to receive restricted stock in lieu of stock
      options.




During
      the fiscal year ended October 31, 2007, Messrs. Friede, Jaeger, Sabin,
      Sandberg, and Young, and Ms. Wysenski each received an annual grant of ten-year
      non-statutory stock options to purchase 15,000 shares of our Common Stock,
      at a
      price of $1.23 per share, with one-third vesting each year for the next three
      years, as measured from the grant date of June 5, 2007. During the fiscal year
      ending October 31, 2007, Dr. Wilner received a grant of ten-year
      non-statutory stock options to purchase 25,000 shares of our Common Stock,
      at a
      price of $1.23 per share, with one-third vesting each year for the next three
      years, as measured from the grant date of June 5, 2007.




The
      following table and footnotes provide information regarding the compensation
      paid to our non-employee members of the Board of Directors in fiscal
      2007.





**Name**
            
            **Fees
                Earned or**
              **Paid
                in****Cash ($)**
            
            **Option**
              **Awards
                ($)**
            
            **Total
                ($)**Dr.
                Gary N. Wilner
            
            $
            56,750
            
            $
            17,188
            
            $
            73,938John
                A. Friede
            
            $
            24,500
            
            $
            10,313
            
            $
            34,813Dr.
                Jonathan P. Gertler
            
            $
            11,750
            
            $
            —
            
            $
            11,750Dr.
                Wilfred E. Jaeger
            
            $
            26,500
            
            $
            10,313
            
            $
            36,813John
                M. Sabin
            
            $
            34,750
            
            $
            10,313
            
            $
            45,063Richard
                A. Sandberg
            
            $
            42,750
            
            $
            10,313
            
            $
            53,063Nancy
                J. Wynsenski
            
            $
            31,625
            
            $
            10,313
            
            $
            41,938Roderick
                A. Young
            
            $
            28,250
            
            $
            10,313
            
            $
            38,563




13




**Potential
      Payments Upon Termination or Change-in-Control**




*John
      B. Rush*




On
      March
      22, 2007, we entered into an employment agreement (the “Agreement”) with John B.
      Rush in connection with his employment as our new President and Chief Executive
      Officer. Mr. Rush’s base salary is $350,000. Mr. Rush is also eligible to
      receive an annual bonus, if any, based upon performance goals approved by the
      Board or the Compensation Committee of the Board, in consultation with Mr.
      Rush,
      in an amount, not to exceed 60% of his base salary, to be determined by the
      Compensation Committee. For the period beginning on April 23, 2007 and ending
      the last day of our fiscal year, October 31, 2007, Mr. Rush will receive a
      guaranteed, minimum, pro-rated bonus of 30% of his base salary.





On
      April
      23, 2007, we granted stock options to Mr. Rush with respect to 1,800,000 shares
      of our common stock. The stock options have an exercise price of $1.16, which
      was equal to the fair market value per share of our common stock on the grant
      date. In addition, in the event that within 24 months of April 23, 2007, we
      issue additional shares of stock in connection with raising capital in a private
      placement transaction, we are required to grant options to Mr. Rush to acquire
      an additional number of shares of common stock equal to 3% of the number of
      shares issued in connection with such transaction.





All
      of
      the options have a term of ten years and vest monthly over a four-year period.
      The options remain exercisable until the earlier of the expiration of the term
      of the option or (i) three months following Mr. Rush’s date of termination in
      the case of termination for reasons other than cause, death or disability (as
      such terms are defined in the Agreement) or (ii) 12 months following Mr. Rush’s
      date of termination in the case of termination on account of death or
      disability. In the event that Mr. Rush is terminated for cause, all outstanding
      options, whether vested or not, will immediately lapse.




In
      the
      event (a) Mr. Rush’s employment is terminated by the Company at any time after
      April 23, 2007 for any reason other than Mr. Rush’s death, disability or cause
      or (b) Mr. Rush resigns for a “good reason” (as defined in the Agreement), Mr.
      Rush will receive his base salary in effect on the date of termination for
      a
      period ending 12 months following the date of termination paid in accordance
      with our standard payroll practices for salaried employees. If this event had
      occurred at the end of our fiscal year, Mr. Rush would have received $350,000
      in
      salary payments over the following 12 months.





In
      the
      event of a “Control Termination” (as defined in the Agreement), Mr. Rush will be
      entitled to receive his base salary in effect on the date of termination paid
      in
      accordance with our standard payroll practices for salaried employees and group
      health benefits for a period ending 12 months following the date of termination
      and, in addition, Mr. Rush shall, as of the date of the Control Termination,
      become fully vested in any unvested options previously granted to him. If this
      event had occurred at the end of our fiscal year, Mr. Rush would have received
      $350,000 in salary payments and approximately $15,185 in group health
      benefits over the
      following 12 months. At the end of our fiscal year, the exercise price per
      share
      of Mr. Rush’s stock options exceeded the closing market price per share of our
      common stock. As a result, no value is recognized for the acceleration of his
      unvested stock options.




The
      Agreement also provides that we will make a tax gross-up payment to Mr. Rush
      in
      the event that payments to Mr. Rush on account of a change in control constitute
      an excess parachute payment subject to an excise tax under Section 4999 of
      the
      Code. Similarly, we will make a tax gross-up payment to Mr. Rush for any excise
      tax in the event that amounts or benefits payable to Mr. Rush are determined
      to
      be subject to the excise tax on nonqualified deferred compensation under Section
      409A of the Code.





In
      the
      event that any amount payable upon Mr. Rush’s termination would be determined to
      be “non-qualified deferred compensation” subject to Section 409A of the Code, we
      may delay payment for six months, in order to comply with Section 409A of the
      Code.




14




*L.
      Michael Cutrer*




In
      April 2002, we entered into an employment agreement with L. Michael Cutrer
      in connection with his employment as our Chief Executive Officer.
      Mr. Cutrer’s initial annual salary was $302,000 with a bonus to be
      determined at the discretion of the Board of Directors in accordance with the
      agreement. We can terminate the employment agreement at any time with or without
      cause. If terminated without cause, the agreement provides, among other things,
      for immediate vesting of any unvested stock options and a severance payment
      equal to three times his current base salary paid as salary continuation over
      a
      three year period in accordance with our standard payroll practices for salaried
      employees. In the event of a change of control of the Company, the agreement
      also provides, among other things, for the immediate vesting of any unvested
      stock options and a severance payment equal to three times (a) base salary,
      (b) the highest bonus awarded in the three previous years and (c) the
      Black-Scholes value of any grant of options made during the prior year paid
      as
      salary continuation over a one year period in accordance with our standard
      payroll practices for salaried employees.




On
      December 21, 2006, as part of the transition from the position of President
      and
      Chief Executive Officer to become our Executive Vice President and Chief
      Technology Officer, we and Mr. Cutrer entered into a First Amended and Restated
      Employment Agreement (the “Amended Agreement”), which became effective with the
      employment of Mr. Rush on April 23, 2007 (the “Effective Date”). Under the
      Amended Agreement, Mr. Cutrer’s annual base salary is $280,000. In addition, Mr.
      Cutrer is eligible to receive an annual bonus, if any, based upon performance
      goals approved by the Compensation Committee or the Board in an amount to be
      determined in the sole discretion of the Compensation Committee or the Board.
      If
      Mr. Cutrer meets or exceeds the performance goals for a particular measuring
      year, the annual bonus may not be less than 25% of his base salary.




In
      the event Mr. Cutrer’s employment terminates at any time after the Effective
      Date for any reason, except for a “Control Termination” (as defined in the
      Amended Agreement), and in addition to any payment that may be due if he had
      been terminated on or before October 31, 2007 as noted above, Mr. Cutrer will
      be
      entitled to receive (a) severance pay equal to three times his highest base
      salary during his employment payable over a three year period in accordance
      with
      our standard payroll practices for salaried employees, and (b) any unvested
      stock options shall immediately vest as of the termination date. In addition,
      the exercise date of all stock options that, on the termination date, have
      an
      exercise price greater than the fair market value of our common stock will
      be
      extended to the later of (i) the last day of the year in which the stock option
      would otherwise have expired or (ii) two and a half months after the date on
      which the stock option would otherwise have expired (or such later date as
      may
      be permitted by final regulations issued pursuant to Section 409A of the Code,
      as amended (the “Code”), but in no event later than the date on which the stock
      option would have expired had Mr. Cutrer’s employment not been terminated). If
      this event had occurred at the end of our fiscal year, Mr. Cutrer would have
      received $1,022,040 in salary payments over the following 3 years. At the end
      of
      our fiscal year, the exercise price per share of Mr. Cutrer’s stock options
      exceeded the closing market price per share of our common stock. As a result,
      no
      value is recognized for the acceleration of his unvested stock
      options.




In
      the event of a Control Termination, Mr. Cutrer will be entitled to a “Control
      Severance Payment” in the gross amount equal to the total of: (a) three years’
base salary; (b) the highest annual bonus paid to Mr. Cutrer in the three years
      prior to such termination multiplied by three; (c) the Black-Scholes valuation
      of the stock options received by Mr. Cutrer during the one year prior to such
      termination multiplied by three (3); and (d) a tax gross-up payment if any
      severance payment constitutes an excess parachute payment subject to the excise
      tax imposed by Section 4999 of the Code. The Control Severance Payment will
      be
      paid as salary continuation ratably over a one year period in accordance with
      our standard payroll practices for salaried employees. In addition, any unvested
      stock options will immediately vest as of the termination date. If this event
      had occurred at the end of our fiscal year, Mr. Cutrer would have received
      $1,022,040 in salary payments, $90,000 in bonus payments, and $243,528 valuation
      of his stock options, based upon the Black-Scholes valuation of the stock
      options received by Mr. Cutrer during the one year prior to such event
      multiplied by three, all paid over the following 12 months. At the end of our
      fiscal year, the exercise price per share of Mr. Cutrer’s stock options exceeded
      the closing market price per share of our common stock. As a result, no value
      is
      recognized for the acceleration of his unvested stock options.




*James
      W. Klingler*




In
      July
      2004, we entered into a letter agreement with James W. Klingler in connection
      with his employment as our Chief Financial Officer. The letter agreement does
      not provide for a specific term of employment; however, the agreement does
      provide for a twelve month severance payment  if
      we
      terminate Mr. Klingler’s employment for any reason other than for cause, to
      be paid
      as
      salary continuation over a one year period in accordance with our standard
      payroll practices for salaried employees . If
      this
      event had occurred at the end of our fiscal year, Mr. Klingler would have
      received $236,120 in salary payments over the following 12 months.




15




*Michael
      J. Ryan*




In
      January 2006, we entered into a letter agreement with Michael J. Ryan in
      connection with his employment as Senior Vice President and General Manager
      of
      our NOMOS Radiation Oncology Division. The letter agreement does not provide
      for
      a specific term of employment; however, the agreement does provide for a six
      month severance payment if we terminate Mr. Ryan’s employment for any reason
      other than for cause to be paid in a lump sum or in salary continuation, at
      our
      option. If Mr. Ryan’s service as Senior Vice President and General Manager of
      our NOMOS Radiation Oncology Division (or any follow-on position of similar
      authority) continues for three years, the agreement will provide for a nine
      month severance payment if we terminate Mr. Ryan’s employment for any reason
      other than for cause to be paid in a lump sum or in salary continuation, at
      our
      option.




In
      April
      2007, we entered into an amended letter agreement, increasing Mr. Ryan’s
      severance payment to nine months if we terminate his employment for any reason
      other than for cause, and providing a guaranteed bonus of no less than 50%
      of
      his target bonus for fiscal 2007 (pro-rated in the event Mr. Ryan’s employment
      ends prior to the end of the fiscal year). Finally, the letter agreement
      provides for an additional bonus of three months’ salary in the event Mr. Ryan
      continues his employment until such time as a transaction or restructuring
      shall
      have occurred with respect to the NOMOS Radiation Oncology Division, but in
      no
      event shall such bonus be paid later than October 31, 2007. If this event had
      occurred at the end of our fiscal year, Mr. Ryan would have received $164,061
      in
      salary payments, and a minimum bonus payment of $27,344.




**Compensation
      Committee Interlocks and Insider Participation**




From
      November 1, 2006 to June 4, 2007, the Compensation Committee consisted of Ms.
      Nancy Wysenski (Chairperson), Dr. Jonathan Gertler, and Mr. Richard Sandberg.
      From June 5, 2007 through October 31, 2007, the Compensation Committee consisted
      of Mr. Richard Sandberg (Chairman), Mr. John Friede, and Ms. Nancy Wysenski,
      all
      non-employee Directors who meet the Nasdaq listing standards for “independence”.
      None of the members who served on the Compensation Committee during the last
      fiscal year was or has been an officer or employee of the Company or any of
      its
      subsidiaries. None of our executive officers serves on the board of directors
      or
      Compensation Committee of any entity that has one or more executive officers
      serving as a member of our Board of Directors or Compensation
      Committee.




**Compensation
      Committee Report**




The
      Compensation Committee of the Board of Directors has reviewed and discussed
      the
      Compensation Discussion and Analysis required by Item 402(b) of Regulation
      S-K
      with management and based on such review and discussions, the Compensation
      Committee recommended to the Board of Directors that the Compensation Discussion
      and Analysis be included in this Amendment No.1 to Form 10-K.




Compensation
      Committee:




Richard
      Sandberg (Chairman)


John
      Sabin


Nancy
      Wysenski




*The
      above Report of the Compensation Committee does not constitute soliciting
      material and should not be deemed filed or incorporated by reference into any
      other Company filing, whether under the Securities Act of 1933, as amended,
      or
      the Securities Exchange Act of 1934, as amended, whether made on, before or
      after the date of this Amendment No.1 to Form 10-K and irrespective of any
      general incorporation language in such filing, except to the extent the Company
      specifically incorporates this Report by reference therein.*




16


**Item
                12.**
            **SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT****AND RELATED STOCKHOLDER
                MATTERS**




Except
      as
      otherwise indicated below, the following table sets forth information known
      to
      the Company with respect to the beneficial ownership of the Company’s Common
      Stock as of February 15, 2008 by (i) all those known by the Company to
      own more than 5% of the Company’s outstanding Common Stock; (ii) each of
      the Company’s directors; (iii) each executive officer  named
      in
      the Summary Compensation Table; and (iv) all directors and executive
      officers named in the Summary Compensation Table as a group:




**Beneficial Ownership****Name and Address(1)**
            
            
            
            **Number of Shares(2)**
            
            **Percent of**
              **Class**John
                B. Rush
            
            
            412,500
            (3)
            
            
            
            *L.
                Michael Cutrer
            
            
            1,048,708
            (4)
            
            
            1.1Wilfred
                E. Jaeger
            
            
            49,366,852
            (5)
            
            
            51.4John
                M. Sabin
            
            
            23,667
            (6)
            
            
            
            *Richard
                A. Sandberg
            
            
            32,658
            (7)
            
            
            
            *Gary
                N. Wilner
            
            
            59,334
            (8)
            
            
            
            *Nancy
                J. Wysenski
            
            
            40,000
            (9)
            
            
            
            *Roderick
                A. Young
            
            
            8,334
            (10)
            
            
            
            *Troy
                A. Barring
            
            
            --
            
            
            
            
            *David
                N. King
            
            
            59,250
            (11)
            
            
            
            *James
                W. Klingler
            
            
            71,875
            (12)
            
            
            
            *Michael
                C. Ryan
            
            
            --
            (13)
            
            
            
            *All
                directors and executive officers as a group (12 persons)
            
            
            51,123,178
            (14)
            
            
            52.5Three
                Arch Partners
            
            
            49,358,518
            (15)
            
            
            51.4SF
                Capital Partners Ltd
            
            
            14,137,515
            (16)
            
            
            15.1CHL
                Medical Partners .
            
            
            12,195,120
            (17)
            
            
            13.2


*
            Denotes
                less than 1%




(1)
                    Unless
                        otherwise indicated, the business address of each stockholder
                        is c/o North
                        American Scientific, Inc., 20200 Sunburst Street, Chatsworth,
                        California
                        91311.


(2)
              This
                  table is based upon information supplied by officers, directors,
                  and
                  principal stockholders of the Company and by Schedules 13D and
                  13G filed
                  with the SEC. Except where indicated, by footnote, and subject
                  to
                  community property laws where applicable, the persons named in
                  this table
                  have sole voting and investment power with respect to all of their
                  shares
                  of Common Stock. Except with respect to 5% security holders, applicable
                  percentages are based on 92,435,855 shares of Company Common Stock
                  outstanding on February 15, 2008, adjusted as required. The
                  information known to the Company with respect to each of the following’s
                  beneficial ownership of the Company’s Common Stock is as of
                  February 15, 2008: John B. Rush, L. Michael Cutrer, Wilfred E.
                  Jaeger, John M. Sabin, Richard A. Sandberg, Gary N. Wilner, Nancy
                  J.
                  Wysenski, Roderick A. Young, David N. King, James W. Klingler,
                  and Michael
                  C. Ryan.




(3)
              Includes
                  412,500 shares subject to outstanding options that are exercisable
                  within
                  60 days of February 15, 2008.




(4)
                Includes
                    770,125 shares subject to outstanding options that are exercisable
                    within
                    60 days of February 15, 2008. Also includes 53,583 shares owned
                    by a trust
                    over which the reporting person has shared voting and dispositive
                    power
                    with his spouse. Also includes 2,508 shares held in a trust for
                    the
                    reporting person’s
                    sons.




(5)
            Includes
                45,772,058 shares and warrants to purchase 3,586,460 shares that
                are
                exercisable within 60 days of February 15, 2008 held of record by
                Three
                Arch Partners IV, L.P., Three Arch Associates IV, L.P., Three Arch
                Capital, L.P. and TAC Associates, L.P. and 8,334 shares subject to
                outstanding options that are exercisable within 60 days held by Dr.
                Jaeger. Dr. Jaeger, who serves as a member of the Board, is a managing
                member of Three Arch Management IV, L.L.C., or TAM IV, which is the
                general partner for Three Arch Partners IV, L.P. and Three Arch Associates
                IV, L.P. Dr. Jaeger is also a managing member of TAC Management,
                L.L.C.,
                or TAC MGT, which is the general partner for Three Arch Capital,
                L.P. and
                TAC Associates, L.P. TAM IV and TAC MGMT may be deemed to have sole
                power
                to vote these shares, Mark A. Wan, a managing member of TAM IV and
                TAC
                MGMT, may be deemed to have sole power to vote these shares, Dr.
                Jaeger, a
                managing member of TAM IV and TAC MGMT, may be deemed to have sole
                power
                to vote these shares, and Barclay Nicholson, a managing member of
                TAM IV
                and TAC MGMT, may be deemed to have sole power to vote these shares.
                Dr.
                Jaeger disclaims beneficial ownership of shares held by Three Arch
                Partners IV, L.P., Three Arch Associates IV, L.P., Three Arch Capital,
                L.P. and TAC Associates, L.P., except to the extent of his pecuniary
                interest therein.




17




(6)
            Includes
                21,667 shares subject to outstanding options that are exercisable
                within
                60 days of February 15, 2008.




(7)
            Includes
                21,667 shares subject to outstanding options that are exercisable
                within
                60 days of February 15, 2008.




(8)
                  Includes58,334
                      shares subject to outstanding options that are exercisable
                      within 60 days
                      of February 15,
                      2008.




(9)
                Includes
                    40,000 shares subject to outstanding options that are exercisable
                    within
                    60 days . of February 15,
                    2008.




(10)
            Includes
                8,334 shares subject to outstanding options that are exercisable
                within 60
                days of February 15, 2008.




(11)
            Includes
                59,250 shares subject to outstanding options that are exercisable
                within
                60 days of February 15, 2008. Mr. King’s employment terminated on
                May 31, 2007, and the exercise period of his options were extended
                subject to the terms of his consulting agreement with the Company.
                Based
                on the best information available to us for Mr. King, he did not hold
                any stock on May 31, 2007.




(12)
            Includes
                61,875 shares subject to outstanding options that are exercisable
                within
                60 days of February 15, 2008.




(13)
            Mr.
                Ryan’s employment terminated in September 17, 2007. Based on the best
                information available to us for Mr. Ryan, he did not hold any stock
                on September 17, 2007 other than stock options that have been cancelled
                without exercise.




(14)
            Includes
                options to purchase 1,462,086 shares subject to outstanding options
                and
                warrants to purchase 3,586,460 shares of our common stock, all of
                which
                are exercisable within 60 days of February 15,
                2008.




(15)
            Based
                on information set forth in a Schedule 13 D/A filed with the SEC
                on
                January 29, 2008. Includes 45,772,058shares
                and warrants to purchase 3,586,460 shares that are exercisable within
                60
                daysof
                February 15, 2008 held of record by Three Arch Partners IV, L.P.,
                Three
                Arch Associates IV, L.P., Three Arch Capital, L.P. and TAC Associates,
                L.P. and 8,334 shares subject to outstanding options that are exercisable
                within 60 days of February 15, 2008 held by Dr. Jaeger. Dr. Jaeger,
                who
                serves as a member of the Board, is a managing member of Three Arch
                Management IV, L.L.C., or TAM IV, which is the general partner for
                Three
                Arch Partners IV, L.P. and Three Arch Associates IV, L.P. Dr. Jaeger
                is
                also a managing member of TAC Management, L.L.C., or TAC MGT, which
                is the
                general partner for Three Arch Capital, L.P. and TAC Associates,
                L.P. TAM
                IV and TAC MGMT may be deemed to have sole power to vote these shares,
                Mark A. Wan, a managing member of TAM IV and TAC MGMT, may be deemed
                to
                have sole power to vote these shares, Dr. Jaeger, a managing member
                of TAM
                IV and TAC MGMT, may be deemed to have sole power to vote these shares,
                and Barclay Nicholson, a managing member of TAM IV and TAC MGMT,
                may be
                deemed to have sole power to vote these shares. Dr. Jaeger disclaims
                beneficial ownership of shares held by Three Arch Partners IV, L.P.,
                Three
                Arch Associates IV, L.P., Three Arch Capital, L.P. and TAC Associates,
                L.P., except to the extent of his pecuniary interest therein.The
                principal address for Three Arch Partners is 3200 Alpine Road, Portola
                Valley, California 94028.




(16)
            Based
                on information set forth in a Schedule 13 G/A filed with the SEC
                on
                February 14, 2008. Includes 12,857,104 shares and warrants to purchase
                1,280,409 shares that are exercisable within 60 daysof
                February 15, 2008 held of record by SF Capital Ltd. As of December
                31,
                2007 Michael A. Roth and Brian J. Stark have shared voting and investment
                power of 2,694,504 shares. The 2,694,504 shares are held directly
                by SF
                Capital Partners Ltd. or SF Capital. In addition, SF Capital Ltd.
                purchased 10,162,600 shares in the Private Placement in January 2008.
                Messrs Roth and Stark are the managing members of Stark Offshore
                Management LLC, or Stark Offshore, which acts as investment manager
                and
                has sole power to direct the management of SF Capital. Through Stark
                Offshore, Messrs. Roth and Stark possess voting and investment power
                over
                all of the shares. Messrs. Roth and Stark disclaim beneficial ownership
                of
                the shares. The principal address for SF Capital is 3600 South Lake
                Drive,
                St. Francis, Wisconsin 53235.




(17)
            Based
                on information set forth in a Schedule 13 G filed with the SEC on
                January
                28, 2008. Represents shares held by CHL Medical Partners III, L.P.
                and CHL
                Medical Partners III Side Fund, L.P. The principal address of CHL
                Medical
                Partners is 1055 Washington Boulevard, Stamford, Connecticut
                06901.




18




**Equity
      Compensation**




The
      following table sets forth information about the Company’s equity compensation
      plans as of October 31, 2007:




**Plan category**
            
            
            
            **(a)**
              **Number of Shares**
              **to be Issued Upon**
              **Exercise of**
              **Outstanding Options,**
              **Warrants and Rights**
            
            **(b)**
              **Weighted Average**
              **Exercise Price of**
              **Outstanding Options,**
              **Warrants and Rights**
            
            **(c)**
              **Number of Shares**
              **Remaining Available**
              **For Future Issuance Under**
              **Equity Compensation Plans**
              **(excluding securities reflected**
              **in column (a))**Equity
                compensation plans approved by
              stockholders(1)
            
            
            4,507,113
            
            
            
            $3.52
            
            
            
            2,221,562
            (2)Equity
                compensation plans not approved by stockholders
            
            
            —
            
            
            
            —
            
            
            
            —Total
            
            
            4,507,113
            
            
            
            $3.52
            
            
            
            2,221,562


(1)
            Consists
                of the 1996 Stock Option Plan, as amended (the “1996 Plan”), the 2003
                Non-Employee Directors’ Equity Compensation Plan (the “Directors Plan”),
                the 2006 Stock Plan (“2006 Plan”), the 2000 Employee Stock Purchase
                Plan (the “ESPP”) and a stand-alone grant outside of our 2006 Stock
                Plan.




(2)
            Includes
                shares available for issuance under the ESPP. As of October 31, 2007
                an aggregate of 219,757 shares of common stock were available for
                issuance
                under the ESPP.




**Item
              13.**
            **CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS****,
                AND DIRECTOR
                INDEPENDENCE**




**Transactions
      with Related Persons**




Dr.
      Wilfred E. Jaeger, a member of our Board of Directors, co founded Three Arch
      Partners, a holder of 49.5% of our common stock. In addition, Roderick A. Young,
      a member of our Board of Directors, has been a venture partner of Three Arch
      Partners since May 2006. In 2007, neither Dr. Jaeger nor Mr. Young received
      any
      compensation from Three Arch Partners that was directly or indirectly related
      to
      their service as a member of our Board of Directors. Dr. Jaeger is a managing
      member of Three Arch Management IV, L.L.C., or TAM IV, which is the general
      partner for Three Arch Partners IV, L.P. and Three Arch Associates IV, L.P.
      Dr.
      Jaeger is also a managing member of TAC Management, L.L.C., or TAC MGT, which
      is
      the general partner for Three Arch Capital, L.P. and TAC Associates, L.P. Dr.
      Jaeger, a managing member of TAM IV and TAC MGMT, may be deemed to have sole
      power to vote shares of our common stock.




**Review,
      Approval or Ratification of Transactions with Related
      Persons**




Our
      policy with regard to related party transactions is that all material
      transactions are to be reviewed by the Board of Directors for any possible
      conflicts of interest. In the event of a potential conflict of interest, the
      Board of Directors will generally evaluate the transaction in terms of: (i)
      the
      benefits to the Company; (ii) the impact on a director’s independence in the
      event the related person is a director, an immediate family member of a director
      or an entity in which a director is a partner, stockholder or executive officer;
      (iii) the availability of other sources for comparable products or services;
      (iv) the terms and conditions of the transaction; and (v) the terms available
      to
      unrelated third parties or to employees generally. The Board of Directors will
      then document its findings and conclusions in written minutes.





**Director
      Independence**




Our
      securities are listed on The Nasdaq Capital Market and are governed by its
      listing standards. Our Board of Directors has determined that the following
      four
      directors satisfy the current “independent director” standards established by
      Nasdaq Marketplace Rules: Mr. Sabin, Mr. Sandberg, Dr. Wilner, and Ms
      Wysenski.





The
      Board
      of Directors has established three standing committees: the Audit Committee,
      the
      Compensation Committee, and the Nominating and Corporate Governance Committee.
      Each member of the Audit Committee, Compensation Committee, and Nominating
      and
      Corporate Governance Committee, respectively, meets the independence standards
      set forth in Nasdaq Marketplace Rule 4200(a)(15).




19




**Item
      14.**  **PRINCIPAL
      ACCOUNTING FEES AND SERVICES**




**Principal
      Accountant Audit Fees and Services Fee****s**




The
      following table describes fees for professional audit services rendered by
      Singer Lewak Greenbaum & Goldstein LLP, our independent registered public
      accounting firm, for the audit of our annual financial statements for the fiscal
      years ended October 31, 2007 and 2006, respectively, and fees billed for
      other services rendered by Singer Lewak Greenbaum & Goldstein LLP and
      PricewaterhouseCoopers LLP during those periods.




**Type of Fee**
              
              
              **2007**
              
              **2006**Audit
                  Fees(1)
              
              
              $
              268,000
              
              $
              322,000Audit
                  Related Fees(2)
              
              
              
              56,000
              
              
              400,000Tax
                  Fees(3)
              
              
              
              119,000
              
              
              161,000All
                  Other Fees
              
              
              
              —
              
              
              —Total
              
              
              $
              443,000
              
              $
              883,000




(1)
            Audit
                Fees include fees for professional services rendered by Singer Lewak
                Greenbaum & Goldstein LLP for the audit of our annual financial
                statements in our Form 10-K and reviews of quarterly interim financial
                statements included in our Form 10-Q. This category also includes
                fees for
                services that generally only the independent registered public accounting
                firm reasonably can provide to a company, such as procedures related
                to
                consents and assistance with and review of documents filed with the
                Securities and Exchange Commission.




(2)
            Audit
                Related Fees include fees for professional services rendered by Singer
                Lewak Greenbaum & Goldstein LLP and PricewaterhouseCoopers LLP
                associated with assurance and related services traditionally performed
                by
                the independent registered public accounting firm and that are reasonably
                related to the performance of the audit or review of our financial
                statements. This category includes fees related to assistance in
                financial
                due diligence related to issuance of debt and common stock, accounting
                consultations, consultations concerning financial accounting and
                reporting
                standards, and an audit of our internal controls under the Sarbanes-Oxley
                Act of 2002.




(3)
            Tax
                Fees include the fees for professional services rendered byPricewaterhouseCoopers
                LLPfor
                tax compliance, tax advice and tax
                planning.




**Audit
      Committee Pre-Approval Policies and Procedures**




The
      Audit
      Committee on an annual basis reviews audit and non-audit services performed
      by
      the independent registered public accounting firm. All audit and non-audit
      services are pre-approved by the Audit Committee, which considers, among other
      things, the possible effect of the performance of such services on the auditors’
independence. The Audit Committee has considered the role of Singer Lewak
      Greenbaum & Goldstein LLP in providing services to us for the fiscal year
      ended October 31, 2007 and has concluded that such services are compatible
      with their independence as our auditors. The Audit Committee has established
      its
      pre-approval policies and procedures, pursuant to which the Audit Committee
      approved all of the foregoing audit and other services provided by Singer Lewak
      Greenbaum & Goldstein LLP in fiscal years 2007 and 2006,
      respectively.




20




**Item
      15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES**





**(b)**  **Exhibits**





**Exhibit
                No.**
            **Description**31.1*
            Certification
                of Chief Executive Officer Pursuant to Rule 13a-14(a)/15(d) of the
                Securities Exchange Act of 1934.31.2*
            Certification
                of Chief Financial Officer Pursuant to Rule 13a-14(a)/15(d) of the
                Securities Exchange Act of 1934.





*  Filed
      herewith




21




**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act
      of 1934, the Registrant has duly caused this report to be signed on its behalf
      by the undersigned, thereunto duly authorized.





NORTH
                AMERICAN SCIENTIFIC, INC./s/JOHN
                B. RUSHFebruary
                28, 2008
            By:
            John
                B. Rush
              *President
                and Chief Executive Officer*






22