##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended December 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from to
 COMMISSION FILE NO.: 000-30326
 TRI-ISTHMUS GROUP, INC.
  Delaware
(State or Other Jurisdiction of
Incorporation 
or Organization)
    
    77-0557617
(I.R.S. Employer
Identification No.)149 South Barrington Avenue, Suite 808
Los Angeles, California
(Address of Principal Executive Offices)
    
    90049
(Zip Code)
 (818) 887-6659
  þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ




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##### 



TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1.
    
    Financial Statements
    
    3Condensed Consolidated Balance Sheets
    
    3December 31, 2007 (Unaudited) and September 30, 2007Condensed Consolidated Statements of Operations
    
    5Three months ended December 31, 2007 and January 31, 2007 (Unaudited)Condensed Consolidated Statements of Cash Flows
    
    6Three months ended December 31, 2007 and January 31, 2007 (Unaudited)Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    19Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    24Item 4.
    
    Controls and Procedures
    
    24PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    25Item 1A.
    
    Risk Factors
    
    25Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    25Item 3.
    
    Defaults upon Senior Securities
    
    26Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    26Item 5.
    
    Other Information
    
    26Item 6.
    
    Exhibits
    
    27Signatures
    
    28Exhibit Index
    
    29Certification Pursuant to Rule 13a-14(d)Certification Pursuant to Rule 13a-14(d)Certification Pursuant to Rule 18 U.S.C. 1350Certification Pursuant to Rule 18 U.S.C. 1350
  2




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##### Table of Contents



PART I
FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 TRI-ISTHMUS GROUP, INC.
 
 
 December 31,
    
    
    September 30,2007
    
    
    2007(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    1,244
    
    
    $
    733Accounts receivable, net of allowance for uncollectible accounts
    
    
    6,027
    
    
    
    1,418Advance to affiliated entity (note 6)
    
    
    239
    
    
    
    273Prepaid expenses
    
    
    182
    
    
    
    23Other current assets
    
    
    1,183
    
    
    
    135Total current assets
    
    
    8,875
    
    
    
    2,582Property and equipment, net
    
    
    6,083
    
    
    
    1,163Goodwill (Note 7)
    
    
    759
    
    
    
    759Total assets
    

$
    15,717
    
    

$
    4,504LIABILITIES, PREFERRED STOCK AND SHAREHOLDERS EQUITYAccounts payable
    
    $
    886
    
    
    $
    678Accrued expenses
    
    
    1,826
    
    
    
    792Staff accruals
    
    
    634
    
    
    
    154Notes payable
    
    
    6,360
    
    
    
    Total current liabilities
    
    
    9,706
    
    
    
    1,624Notes payable (Note 8)
    
    
    512
    
    
    
    Commitments and contingencies (Note 9)
    
    
    
    
    
    
    Minority interest (Note 10)
    
    
    2,384
    
    
    
    920
 See
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TRI-ISTHMUS GROUP, INC.
 December 31, 2007
    
    September 30, 2007(Unaudited)Non-redeemable Preferred Stock:Preferred stock Series 1-A ($0.01 par value, 67,600 shares
authorized; 67,600 shares issued and outstanding as of
December 31 and September 30, 2007)(Aggregate liquidation value is $169 as of December 31 and
September 30, 2007)
    
    
    166
    
    
    
    166Preferred stock Series 2-A ($0.01 par value, 3,900 shares
authorized; 3,900 shares issued and outstanding as of
December 31 and September 30, 2007)(Aggregate liquidation value is $25 as of December 31 and
September 30, 2007)
    
    
    25
    
    
    
    25Total non-redeemable preferred stock
    
    
    191
    
    
    
    191Redeemable preferred stock:Preferred stock Series 5-A ($0.01 par value, 9,000 shares
authorized; 2,852 shares and 2,717 shares issued and
outstanding as of December 31 and September 30, 2007,
respectively)
    
    
    2,325
    
    
    
    2,519(Aggregate liquidation value is $2,852 and $2,717 as of
December 31 and September 30, 2007, respectively)(Aggregate redemption value is $2,995 and $2,853 as of
December 31 and September 30, 2007, respectively)Preferred stock Series B issued by subsidiary (note 8)
($0.01 per value, 38,250 shares authorized, 19,990 shares
issued and outstanding as of December 31 and September 30,
2007)
    
    
    2,500
    
    
    
    2,500Total redeemable stock
    
    
    4,825
    
    
    
    5,019Common stock ($0.01 par value, 100,000,000 shares
authorized; 8,229,132 and 3,828,739 shares issued and
outstanding as of December 31 and September 30, 2007
respectively
    
    
    82
    
    
    
    38Additional paid-in capital
    
    
    67,075
    
    
    
    65,355Accumulated deficit
    
    
    (69,006
    )
    
    
    (68,591
    )Other comprehensive loss
    
    
    (52
    )
    
    
    (52
    )Total shareholders equity
    
    
    (1,901
    )
    
    
    (3,250
    )Total liabilities, preferred stock and shareholders equity
    
    $
    15,717
    
    
    $
    4,504
 See
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TRI-ISTHMUS GROUP, INC.
 
 
 Three months endedDecember 31,
    
    
    January 31,2007
    
    
    2007Revenue from services
    
    $
    4,744
    
    
    $
    702Costs and expenses:Selling, general and
administrative expenses
    
    
    4,891
    
    
    
    1,434Amortization of
stock-based
compensation
    
    
    18
    
    
    
    57Total costs and expenses, net
    
    
    4,609
    
    
    
    1,491Operating loss
    
    
    (165
    )
    
    
    (789
    )Interest income
    
    
    23
    
    
    
    1Interest expense
    
    
    (193
    )
    
    
    Minority interest
    
    
    (80
    )
    
    
    168Net loss from operations before taxation
    
    $
    (415
    )
    
    $
    (620
    )Taxation
    
    
    
    
    
    
    Net loss
    
    
    (415
    )
    
    
    (620
    )Net loss available to common shareholders
(Note 2)
    
    $
    (415
    )
    
    $
    (620
    )Net loss per common share:Basic
    
    
    (0.08
    )
    
    
    (0.17
    )Diluted
    
    
    N/A
    
    
    
    N/A
 See
 5




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##### Table of Contents



TRI-ISTHMUS GROUP, INC.
 
 
 Three months ended,December 31,
    
    
    January 31,2007
    
    
    2007Cash flows from operating activities:Net loss
    
    $
    (415
    )
    
    $
    (620
    )Adjustments to reconcile net loss to net cash used in operating activities:Minority interest
    
    
    80
    
    
    
    (168
    )Depreciation and amortization
    
    
    65
    
    
    
    29Amortization of stock based compensation
    
    
    18
    
    
    
    57Amortization
of debt discount
    
    
    93
    
    
    
    Bad debt provision
    
    
    166
    
    
    
    Changes in working capital components:Accounts receivable
    
    
    (1,184
    )
    
    
    101Accounts payable
    
    
    (189
    )
    
    
    15Others
    
    
    (72
    )
    
    
    316Net cash used in operating activities
    
    
    (1,436
    )
    
    
    (270
    )Cash flows from investing activities:Purchase of property and equipment
    
    
    (6
    )
    
    
    Acquisition of subsidiaries, net of cash acquired
    
    
    283
    
    
    
    163Repayment of advance
    
    
    33
    
    
    
    Net cash provided by investing activities
    
    
    310
    
    
    
    163Cash flows from financing activities:Issuance of promissory Notes
    
    
    1,650
    
    
    
    Repayment of notes
    
    
    (11
    )
    
    
    Net cash provided by financing activities
    
    
    1,639
    
    
    
    Effect of exchange rates on cash
    
    
    
    
    
    
    3Net increase/(decrease) in cash and cash equivalents
    
    
    511
    
    
    
    (104
    )Cash and cash equivalents at beginning of period
    
    
    733
    
    
    
    390Cash and cash equivalents at end of period
    
    $
    1,244
    
    
    $
    286Cash paid
for interest
    
    $
    97
    
    
    
    
 See
 6




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1. Summary of Significant Accounting Policies
 Basis of Presentation
 Company we us
    Change in Fiscal Year
 Board
 Cash and Cash Equivalents
  Future Funding
 San Diego ASCs
   RHA
 7




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Use of Estimates
  Income Taxes
  Functional Currency
  Stock-Based Compensation
 Purchase Plan
  Loss Per Share
  8




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2. Net (Loss)/Profit Available to Common Shareholders
  Three months endedDecember 31,
    
    
    January 31,2007
    
    
    2007(in thousands)Net loss
    
    $
    (415
    )
    
    $
    (620
    )Less: Deemed non-cash dividend to preferred shareholders
    
    
    
    
    
    
    Net loss available to common shareholders
    
    $
    (415
    )
    
    $
    (620
    )
 3. Net Loss Per Share
  Three months endedDecember 31,
    
    
    January 31,2007
    
    
    2007(in thousands, except for numberof shares and per share data)Numerator for basic and diluted loss per share:Net loss
    
    $
    (415
    )
    
    $
    (620
    )Denominator for basic (loss)/profit per share 
weighted average shares
    
    
    5,495,799
    
    
    
    3,674,029Effect of dilutive securities:Employee stock options
    
    
    N/A
    
    
    
    N/APreferred stock
    
    
    N/A
    
    
    
    N/AWarrants
    
    
    N/A
    
    
    
    N/ADenominator for diluted profit/(loss) per common
share  adjusted weighted average shares
    
    
    N/A
    
    
    
    N/ANet (loss)/profit per common share:Basic
    
    $
    (0.08
    )
    
    $
    (0.17
    )Diluted
    
    
    N/A
    
    
    
    N/A
  4. Amortization of Stock-based Compensation
  9




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5 Consolidated Balance Sheet Details
 December 31,
    
    
    September 30,2007
    
    
    2007(in thousands)Other current assets:Deposits
    
    $
    105
    
    
    $
    24Stocks
    
    
    387
    
    
    
    Other receivables
    
    
    691
    
    
    
    111$
    1,183
    
    
    $
    135Property and equipment:Computer hardware
    
    
    76
    
    
    
    74
 10




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December 31,
    
    
    September 30,2007
    
    
    2007(in thousands)Leasehold improvements
    
    
    3,618
    
    
    
    30Medical equipment
    
    
    2,207
    
    
    
    1,164Land
    
    
    353
    
    
    
    Accumulated depreciation
    
    
    (171
    )
    
    
    (105
    )Property and equipment, net
    
    $
    6,083
    
    
    $
    1,163
 6 Advance to CSA II, LLC
 Cross Shore RPS
 7 Acquisitions
 Del Mar Point Loma
 Point Loma
    
    Del Mar
    
    TotalCash and cash equivalents
    
    $
    109
    
    
    $
    55
    
    
    $
    164Accounts receivable, net
    
    
    950
    
    
    
    569
    
    
    
    1,519Other current assets
    
    
    91
    
    
    
    145
    
    
    
    236Property and equipment, net
    
    
    428
    
    
    
    742
    
    
    
    1,170Accounts payable
    
    
    (51
    )
    
    
    (46
    )
    
    
    (97
    )Total
    
    
    1,527
    
    
    
    1,465
    
    
    
    2,992Less: Minority interest  49%
    
    
    (748
    )
    
    
    (731
    )
    
    
    (1,479
    )Share of net assets
    
    $
    779
    
    
    $
    734
    
    
    $
    1,513Purchase consideration
    
    
    1,250
    
    
    
    1,250
    
    
    
    2,500Goodwill
    
    
    471
    
    
    
    516
    
    
    
    987Impairment of goodwill
    
    
    (228
    )
    
    
    
    
    
    
    (228
    )As at December 31, 2007
    
    $
    293
    
    
    $
    516
    
    
    $
    759
  11




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Cash and cash equivalents
    
    $
    348Accounts receivable, net
    
    
    3,591Other current assets
    
    
    550Property and equipment, net
    
    
    4,978Accounts payable
    
    
    (397
    )Accrued expenses
    
    
    (1,106
    )Notes payable
    
    
    (5,420
    )Total
    
    $
    2,544Less: Minority interest  49%
    
    
    (1,246
    )Share of net assets
    
    
    1,298Purchase consideration
Issuance of restricted shares
    
    
    (1,233
    )Incidental costs
    
    
    (65
    )
  8. Promissory notes
 SMP Ciabattoni Waveland Spector
 Maturity Date
     12




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9. Commitments and Contingencies
  10. Minority Interest
   11. Warrants
     13




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14




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Weighted-AverageNumber of Shares of Common Stock
    
    
    Exercise Price Per ShareDecember 31,
    
    
    September 30,
    
    
    December 31,
    
    
    September 30,2007
    
    
    2007
    
    
    2007
    
    
    2007Warrants outstanding at beginning of the
period
    
    
    2,898,700
    
    
    
    1,724,300
    
    
    $
    0.45
    
    
    $
    0.43Granted
    
    
    3,328,500
    
    
    
    1,174,400
    
    
    
    0.39
    
    
    
    0.48Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cancelled or Expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Converted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Warrants outstanding at end of the period
    
    
    6,227,200
    
    
    
    2,898,700
    
    
    $
    0.42
    
    
    $
    0.45Warrants exercisable at end of the period
    
    
    5,895,950
    
    
    
    2,671,617
    
    
    $
    0.42
    
    
    $
    0.45
 12. Issuance of Series B Preferred Stock by Subsidiary
  Exhibits 10.1 10.2
 13. Preferred Stock
  Series 1-A Preferred Stock
  15




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Series 2-A Preferred Stock
  Series 5-A Preferred Stock
      16




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14. Litigation
 HI
 Put Option HI-Owned Shares
 15. Subsequent Events
 Purchase Agreement Exhibit
10.1 Investors Series 5-A
Preferred Stock Common Stock Securities
Act Exhibit 10.2
 17




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Warrants
 Waveland Exhibit 10.2
 18




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##### Table of Contents



Item 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
  FORWARD LOOKING STATEMENTS
  OVERVIEW
 RECENT DEVELOPMENTS
    SUBSEQUENT EVENTS
 Purchase Agreement Exhibit
10.1 Investors Series 5-A
Preferred Stock Common Stock Securities
Act Exhibit 10.2 Warrants
 Waveland
 19




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Exhibit 10.2
 CURRENT OPERATIONS
 TIGroup
  RHA
 STRATEGY
   20




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##### Table of Contents



RESULTS OF OPERATIONS (All amounts in thousands)
 Three months endedDecember 31,
    
    
    January 31,2007
    
    
    2007Revenue from services
    
    $
    4,744
    
    
    $
    702Costs and expenses:Selling, general and administrative expenses
    
    
    4,891
    
    
    
    1,434Amortization of stock-based compensation
    
    
    18
    
    
    
    57Total costs and expenses, net
    
    
    4,909
    
    
    
    1,491Operating loss
    
    
    (165
    )
    
    
    (789
    )Investment income
    
    
    23
    
    
    
    Interest expense
    
    
    (193
    )
    
    
    Minority interest
    
    
    (80
    )
    
    
    168Net loss from continuing operations before taxation
    
    $
    (415
    )
    
    $
    (620
    )Taxation
    
    
    
    
    
    
    Net loss
    
    
    (415
    )
    
    
    (620
    )Net loss available to common shareholders (Note 2)
    
    $
    (415
    )
    
    $
    (620
    )Net loss per common share:Basic
    
    $
    (0.08
    )
    
    $
    (0.17
    )Diluted
    
    
    N/A
    
    
    
    N/A
 MATERIAL CHANGES IN RESULTS OF OPERATIONS  THREE MONTHS ENDED DECEMBER 31, 2007, COMPARED TO
THREE MONTHS ENDED JANUARY 31, 2007
         21




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MATERIAL CHANGES IN FINANCIAL CONDITION  AT DECEMBER 31, 2007, COMPARED TO SEPTEMBER 30, 2007:
               LIQUIDITY AND CAPITAL RESOURCES
  22




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OFF-BALANCE SHEET FINANCING
  CRITICAL ACCOUNTING POLICIES
  23




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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 Item 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
 Changes in Internal Control Over Financial Reporting
 24




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PART II
 OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
 HI
 
 Item 1A. RISK FACTORS
  
 Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 Regulation D
   SMP Ciabattoni Waveland Spector
 Maturity Date
 25




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RHA
 
 Item 3. DEFAULTS UPON SENIOR SECURITIES
  
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 Item 5. OTHER INFORMATION
  26




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Item 6. EXHIBITS
 SEC
 2.1*
    
    Membership Interest Purchase Agreement (filed as Exhibit 2.1 to the Form 8-K,
as filed with the SEC on November 5, 2007)3.1*
    
    Certificate of Incorporation (filed as Exhibit 3.1 to the Companys Form 8-K,
as filed with the SEC on November 14, 2000 (the November 14, 2000 Form 8-K))3.2*
    
    Bylaws (filed as Exhibit 3.2 to the November 14, 2000 Form 8-K)3.3*
    
    Amendment to Certificate of Incorporation, dated January 16, 2002 (filed as
Exhibit 3.3 to the Companys Form 8-K, as filed with the SEC on January 23, 2002)3.4*
    
    Amendment to Certificate of Incorporation, dated November 20, 2002 (filed as
Exhibit 3.1 to the Companys Form 10-Q for the period ending October 31, 2002, as filed
with the SEC on December 5, 2002)3.5*
    
    Certificate of Amendment to Certificate of Incorporation, dated December 16,
2005 (filed as Exhibit 3.5 to the Companys Form 10-Q for the period ending October 31,
2005, as filed with the SEC on December 20, 2005)4.1*
    
    Certificate of Designations of Rights and Preferences of Series 5-A Convertible
Preferred Stock (filed as Exhibit 3.1 to the Form 8-K, as filed with the SEC on July
21, 2005)4.2*
    
    Amended and Restated Articles of Organization (filed as Exhibit 4.1 to the Form
8-K, as filed with the SEC on November 5, 2007)4.3*
    
    Amended and Restated Operating Agreement (filed as Exhibit 4.2 to the Form 8-K,
as filed with the SEC on November 5, 2007)10.1*
    
    Partnership Interest Purchase Agreement, dated as of December 2, 2005, by and
among Del Mar GenPar, Inc. and Del Mar Acquisition, Inc., as the buyers; Surgical
Ventures, Inc., as the seller; and David M. Kupfer, M.D. (filed as Exhibit 10.1 to the
Form 8-K, as filed with the SEC on December 7, 2005)10.2*
    
    Partnership Interest Purchase Agreement, dated as of December 2, 2005, by and
among Point Loma GenPar, Inc. and Point Loma Acquisition, Inc., as the buyers; Surgical
Ventures, Inc., as the seller; and David M. Kupfer, M.D. (filed as Exhibit 10.2 to the
Form 8-K, as filed with the SEC on December 7, 2005)10.3*
    
    First Amendment to Partnership Interest Purchase Agreement, dated as of March
13, 2006, by and among Del Mar GenPar, Inc. and Del Mar Acquisition, Inc., as the
buyers; Surgical Ventures, Inc., as the seller; and David M. Kupfer, M.D. (filed as
Exhibit 10.3 to the Form 8-K, as filed with the SEC on March 16, 2006)10.4*
    
    First Amendment to Partnership Interest Purchase Agreement, dated as of March
13, 2006, by and among Point Loma GenPar, Inc. and Point Loma Acquisition, Inc., as the
buyers; Surgical Ventures, Inc., as the seller; and David M. Kupfer, M.D. (filed as
Exhibit 10.4 to the Form 8-K, as filed with the SEC on March 16, 2006)10.5*
    
    Form of First Group Notes (filed as Exhibit 10.1 to the Form 8-K, as filed
with the SEC on November 2, 2007)10.6*
    
    Form of Second Group Notes (filed as Exhibit 10.2 to the Form 8-K, as filed
with the SEC on November 2, 2007)10.7*
    
    Form of First Group Warrants (filed as Exhibit 10.3 to the Form 8-K, as filed
with the SEC on November 2, 2007)10.8*
    
    Form of Second Group Warrants (filed as Exhibit 10.4 to the Form 8-K, as filed
with the SEC on November 2, 2007)10.9*
    
    Form of Limited Guaranty by Tri-Isthmus (filed as Exhibit 10.1 to the Form
8-K, as filed with the SEC on November 5, 2007)10.10*
    
    Employment Agreement of Dennis M. Smith, dated effective as of October 10, 2007
(filed as Exhibit 10.1 to the Form 8-K, as filed with the SEC on December 21, 2007)10.11*
    
    Option Agreement of Dennis M. Smith, dated effective as of October 10, 2007 (filed as
Exhibit 10.2 to the Form 8-K, as filed with the SEC on December 21, 2007)31.1
    
    Certification Pursuant to Rule 13a-14(d) promulgated under the Securities Exchange Act of 193431.2
    
    Certification Pursuant to Rule 13a-14(d) promulgated under the Securities Exchange Act of 193432.1
    
    Certification Pursuant to 18 U.S.C. 135032.2
    
    Certification Pursuant to 18 U.S.C. 1350
 27




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SIGNATURES
  Date:   February 20, 2008
    Tri-Isthmus Group, Inc.

(Registrant)By:
    /s/ David HirschhornDavid HirschhornChief Executive Officer
(Principal Executive Officer)Date:   February 20, 2008
    /s/ Dennis M. SmithDennis M. SmithChief Financial Officer
(Principal Financial Officer) 28




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EXHIBIT INDEX
 2.1*
    
    Membership Interest Purchase Agreement (filed as Exhibit 2.1 to the Form 8-K, as filed with the SEC on
November 5, 2007)3.1*
    
    Certificate of Incorporation (filed as Exhibit 3.1 to the Companys Form 8-K, as filed with the SEC on
November 14, 2000)3.2*
    
    Bylaws (filed as Exhibit 3.2 to the Form 8-K, as filed with the SEC on November 14, 2000)3.3*
    
    Amendment to Certificate of Incorporation, dated January 16, 2002 (filed as Exhibit 3.3 to the Form 8-K, as
filed with the SEC on January 23, 2002)3.4*
    
    Amendment to Certificate of Incorporation, dated November 20, 2002 (filed as Exhibit 3.1 to the Form 10-Q
for the period ending October 31, 2002, as filed with the SEC on December 5, 2002)3.5*
    
    Certificate of Amendment to Certificate of Incorporation, dated December 16, 2005 (filed as Exhibit 3.5 to
the Form 10-Q for the period ending October 31, 2005, as filed with the SEC on December 20, 2005)4.1*
    
    Certificate of Designations of Rights and Preferences of Series 5-A Convertible Preferred Stock (filed as
Exhibit 3.1 to the Form 8-K, as filed with the SEC on July 21, 2005)4.2*
    
    Amended and Restated Articles of Organization (filed as Exhibit 4.1 to the Form 8-K, as filed with the SEC
on November 5, 2007)4.3*
    
    Amended and Restated Operating Agreement (filed as Exhibit 4.2 to the Form 8-K, as filed with the SEC on
November 5, 2007)10.1*
    
    Partnership Interest Purchase Agreement, dated as of December 2, 2005, by and among Del Mar GenPar, Inc.
and Del Mar Acquisition, Inc., as the buyers; Surgical Ventures, Inc., as the seller; and David M. Kupfer,
M.D. (filed as Exhibit 10.1 to the Form 8-K, as filed with the SEC on December 7, 2005)10.2*
    
    Partnership Interest Purchase Agreement, dated as of December 2, 2005, by and among Point Loma GenPar, Inc.
and Point Loma Acquisition, Inc., as the buyers; Surgical Ventures, Inc., as the seller; and David M.
Kupfer, M.D. (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on December 7, 2005)10..3*
    
    First Amendment to Partnership Interest Purchase Agreement, dated as of March 13, 2006, by and among Del
Mar GenPar, Inc. and Del Mar Acquisition, Inc., as the buyers; Surgical Ventures, Inc., as the seller; and
David M. Kupfer, M.D. (filed as Exhibit 10.3 to the Form 8-K, as filed with the SEC on March 16, 2006)10.4*
    
    First Amendment to Partnership Interest Purchase Agreement, dated as of March 13, 2006, by and among Point
Loma GenPar, Inc. and Point Loma Acquisition, Inc., as the buyers; Surgical Ventures, Inc., as the seller;
and David M. Kupfer, M.D. (filed as Exhibit 10.4 to the Form 8-K, as filed with the SEC on March 16, 2006)10.5*
    
    Form of First Group Notes (filed as Exhibit 10.1 to the Form 8-K, as filed with the SEC on November 2, 2007)10.6*
    
    Form of Second Group Notes (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on November 2, 2007)10.7*
    
    Form of First Group Warrants (filed as Exhibit 10.3 to the Form 8-K, as filed with the SEC on November 2, 2007)10.8*
    
    Form of Second Group Warrants (filed as Exhibit 10.4 to the Form 8-K, as filed with the SEC on November 2, 2007)10.9*
    
    Form of Limited Guaranty by Tri-Isthmus (filed as Exhibit 10.1 to the Form 8-K, as filed with the SEC on November 5, 2007)10.10*
    
    Employment Agreement of Dennis M. Smith, dated effective as of October 10, 2007 (filed as Exhibit 10.1 to the Form 8-K, as filed with the SEC on December 21, 2007)10.11*
    
    Option Agreement of Dennis M. Smith, dated effective as of October 10, 2007 (filed as Exhibit 10.2 to the Form 8-K, as filed with the SEC on December 21, 2007)31.1
    
    Certification Pursuant to Rule 13a-14(d) promulgated under the Securities Exchange Act of 193431.2
    
    Certification Pursuant to Rule 13a-14(d) promulgated under the Securities Exchange Act of 193432.1
    
    Certification Pursuant to 18 U.S.C.  135032.2
    
    Certification Pursuant to 18 U.S.C.  1350
 
 *
    
    Previously filed with the SEC as indicated, and hereby incorporated herein by reference. 29