##### Table of Contents



U. S. SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K/A
 Amendment No. 2
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal year ended December 31, 2009
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 1-16695
 RADIENT PHARMACEUTICALS CORPORATION
 (Exact name of
registrant as specified in its charter)
 Delaware
    
    33-0413161(State or other jurisdiction of 
incorporation or organization)
    
    (IRS Employer
Identification No.)2492 Walnut Avenue, Suite 100
Tustin, California 92780-7039(Address of principal executive offices)
    
    (714) 505-4460(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 RegisteredCommon Stock, $.001 par value
    
    NYSE Amex
 Securities registered pursuant to Section 12(g) of the Act:  Common Stock, $.001 par value  (Title of class)
 o þ
 o þ
 þ o
 o o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
  Documents Incorporated by Reference




---



##### 



EXPLANTORY NOTE
     
 TABLE OF CONTENTS
 PagePART IItem 1.
    
    Business
    
    
    4Item 1A.
    
    Risk Factors
    
    
    16Item 1B.
    
    Unresolved Staff Comments
    
    
    22Item 2.
    
    Properties
    
    
    22Item 3.
    
    Legal Proceedings
    
    
    22Item 4.
    
    (Removed and Reserved)
    
    
    24PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    24Item 6.
    
    Selected Financial Data
    
    
    31Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    31Item 7A.
    
    Quantitative and Qualitative Disclosures About Market
Risk
    
    
    46Item 8.
    
    Financial Statements and Supplementary
Data
    
    
    47Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    89Item 9A.
    
    Controls and Procedures
    
    
    89Item 9B.
    
    Other Information
    
    
    91PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    92Item 11.
    
    Executive Compensation
    
    
    95Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    100Item 13.
    
    Certain Relationships and Related Transactions and Director Independence
    
    
    103Item 14.
    
    Principal Accountant Fees and Services
    
    
    104PART IVItem 15.
    
    Exhibits, Financial Statement Schedules
    
    
    104SIGNATURES
    
    
    109EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2
  2




---



##### Table of Contents



Cautionary Statement under the Private Securities Litigation Reform Act of 1995:
 This Annual Report on Form 10-K/A and the documents incorporated by reference herein contain
forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of
1934, which include information relating to future events, future financial performance,
strategies, expectations, competitive environment, regulation and availability of resources. From
time to time, we also provide forward-looking statements in other materials we release to the
public as well as verbal forward-looking statements. These forward-looking statements include,
without limitation, statements regarding: regulatory approval for our products; market demand for
our products and competition; our dependence on licensees, distributors and management; impact of
technological changes on our products; results of operations or liquidity; statements concerning
projections, predictions, expectations, estimates or forecasts as to our business, financial and
operational results and future economic performance; and statements of managements goals and
objectives and other similar expressions. Such statements give our current expectations or
forecasts of future events; they do not relate strictly to historical or current facts. Given these
uncertainties, readers are cautioned not to place undue reliance on such forward-looking
statements. Words such as may, will, should, could, would, predicts, potential,
continue, expects, anticipates, future, intends, plans, believes, estimates, and
similar expressions, as well as statements in future tense, identify forward-looking statements.
 We cannot guarantee that any forward-looking statement will be realized, although we believe
we have been prudent in our plans and assumptions. Achievement of future results is subject to
risks, uncertainties and potentially inaccurate assumptions. Many events beyond our control may
determine whether results we anticipate will be achieved. Should known or unknown risks or
uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could
differ materially from past results and those anticipated, estimated or projected. You should bear
this in mind as you consider forward-looking statements.
 We undertake no obligation to publicly update or revise forward-looking statements, whether as
a result of new information, future events or otherwise. You are advised, however, to consult any
further disclosures we make on related subjects in our Form 10-Q and 8-K reports to the SEC. Also
note that we provide the following cautionary discussion of risks, uncertainties and possibly
inaccurate assumptions relevant to our business. These factors individually or in the aggregate, we
think could cause our actual results to differ materially from expected and historical results. You
should understand that it is not possible to predict or identify all such factors. Our actual
results may differ materially from those currently anticipated and expressed in such
forward-looking statements as a result of a number of factors, including those we discuss under
Risk Factors and elsewhere in this Annual Report on Form 10-K/A .
 3




---



##### Table of Contents



PART I
 
 Item 1.
    
    Business
  Discontinued Operations Deconsolidation
  tm
  Discontinued Operations and Dispositions
  Deconsolidation
  
    
    Lack of timely responses from  the management in China to our requests for financial
information;
    
    Lack of responsiveness by management in China to our requests to transfer our funds to
bank accounts under corporate control;
 4




---



##### Table of Contents




    
    Lack of timely communication with their corporate management concerning significant
decisions made by management in China concerning the disposal of the YYB subsidiary; and
    
    Lack of timely communication with corporate officers concerning operations in China.
    Elleuxe Brand of Premium Anti-Aging Skin Care Products
   
    
    Hydrating Firming Cream
    
    Renergie Hydrating Cleanser
    
    Intense Hydrating Cleanser
    
    Visable Renewing Hydrating Softener
    
    Smoothing Renewing Eye Moisturizer
  IVD DIAGNOSTICS DIVISION
 IVD Industry and Market
  5




---



##### Table of Contents



ONKO-SUREtm
 in-vitro DR-70tm
      ONKO-SUREtm  Test Kit Sales and Licensing Strategy
  
    
    obtain international approvals;
    
    develop new distribution channels in new markets;
    
    distribute greater quantities of kits in approved markets;
 6




---



##### Table of Contents




    
    fully utilize our GMP manufacturing facilities in the U.S. to foster worldwide sales;
    
    automate the ONKO-SUREtm test kit; and
    
    eventually create a rapid test format of ONKO-SUREtm test kit to extend sales
into rural areas and POL (physician owned labs).
   
    
    Exclusive five-year distribution agreement with Grifols USA, LLC. This distribution
agreement allows Grifols USA, LLC to market and sell ONKO-SUREtm for the monitoring
of colorectal cancer to hospitals, clinical laboratories, clinics and other health care
organizations.
    
    Exclusive two-year distribution agreement with Tarom Applied Technologies Ltd for the
marketing and sales of ONKO-SUREtm in Israel.
    
    Two distinct exclusive five year distribution agreement with GenWay Biotech, Inc. This
distribution agreement allows Genway Biotech, Inc, to market and sell ONKO-SUREtm
for uses other than colorectal cancer to CLIA-certified laboratories in the US and as a lung
cancer screen to laboratories in Canada.
  TM
    ONKO-SUREtm Test Kit Competition
   7




---



##### Table of Contents



U.S. based ONKO-SUREtm Test Kit Manufacturing
    Regulatory Approval and Clinical Trials of the ONKO-SUREtm Test Kit
    8




---



##### Table of Contents



Collaboration with Mayo Clinic
   9




---



##### Table of Contents



ONKO-SUREtm Test Kit Research and Development
  Reimbursability of Our IVD Products
  CHINA-BASED INTEGRATED PHARMACEUTICALS
      Overview of JPIs Business
   10




---



##### Table of Contents



JPIs Product Lines
  
    
    HPE Solutions
    
    Domperidone Tablets
    
    Compound Benzoic Acid and Camphor Solution
    
    Diavitamin, Calcium and Lysine Tablets
    
    Levofloxacin Lactate Injection
    
    Guyanling Tablets
    
    GS Solution
    
    GNS Solution
    
    NaCL Solution
 JPIs China Business Strategy
 General
    GeographicLocation ChinaSoutheastern
    
    
    38
    %Northeastern
    
    
    31
    %Central
    
    
    14
    %Southwestern
    
    
    13
    %North
    
    
    4
    %
 Marketing and Sales of JPIs Products
    11




---



##### Table of Contents



Manufacturing of JPI Products
  JPIs Competition
  JPIs Research and Development
     JPIs Product Development
  
    
    Pidotimod Tablets (an anti-aging product)
 12




---



##### Table of Contents




    
    Epinastine Tablets (allergy product)
    
    Paclitaxel (a cancer medication)
    
    Creatine Phosphate Sodium Injections (a heart medicine)
    
    Drotaverrine Hydrochloric (a chemotherapy therapeutic product)
    
    Diammonium Glycyrrhizinate (a chemotherapy therapeutic product)
  Chinese Pharmaceutical Regulations
     CANCER THERAPEUTICS
 Combination Immunogene Therapy
  13




---



##### Table of Contents



OUR ONKO-SUREtm AND CIT PATENTS
  14




---



##### Table of Contents



EMPLOYEES
  15




---



##### Table of Contents



EXECUTIVE OFFICES
 http://www.sec.gov
 
 Item 1A. Risk Factors
  Limited product development activities; our product development efforts may not result in
commercial products.
  
    
    the product candidate did not demonstrate acceptable clinical trial results even though
it demonstrated positive preclinical trial results;
    
    the product candidate was not effective in treating a specified condition or illness;
    
    the product candidate had harmful side effects on humans;
    
    the necessary regulatory bodies, such as the SFDA, did not approve our product candidate
for an intended use;
    
    the product candidate was not economical for us to manufacture and commercialize; and
    
    the product candidate is not cost effective in light of existing therapeutics.
  JPIs operations in China involve significant risk.
  16




---



##### Table of Contents



Our business is capital intensive and we may need additional operating capital.
  17




---



##### Table of Contents



Our independent registered public accounting firm has included a going concern paragraph in their
report on our financial statements.
  Our current products cannot be sold in certain countries if we do not obtain and maintain
regulatory approval.
  Our future prospects will be negatively impacted if we are unsuccessful in pending litigation over
the CIT technology.
  The value of intangible assets may not be equal to their carrying values.
  18




---



##### Table of Contents



If our intellectual property positions are challenged, invalidated or circumvented, or if we fail
to prevail in future intellectual property litigation, our business could be adversely affected.
  We face substantial competition, and others may discover, develop, acquire or commercialize
products before or more successfully than we do.
  We have limited sales of the ONKO-SUREtm test kit and are reliant on our distributors for
sales of our products.
  19




---



##### Table of Contents



We have a significant amount of relatively short term indebtedness that is in default and we may
be unable to satisfy our obligations to pay interest and principal thereon when due.
        We are subject to risks associated with our foreign distributors.
  We do not intend to pay dividends on our common stock in the foreseeable future.
  If we fail to comply with the rules under the Sarbanes-Oxley Act related to accounting controls
and procedures or if the material weaknesses or other deficiencies in our internal accounting
procedures are not remediated, our stock price could decline significantly.
  20




---



##### Table of Contents



Our stock price is volatile, which could adversely affect your investment.
  
    
    clinical trial results;
    
    product development announcements by us or our competitors;
    
    regulatory matters;
    
    announcements in the scientific and research community;
    
    intellectual property and legal matters;
    
    broader industry and market trends unrelated to our performance;
    
    economic markets in Asia; and
    
    competition in local Chinese markets where JPI sells its product.
  Our stock price and financing may be adversely affected by outstanding warrants and convertible
securities.
  21




---



##### Table of Contents



We have limited product liability insurance.
  
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  
 Item 3. Legal Proceedings
   22




---



##### Table of Contents



23




---



##### Table of Contents



Item 4. (Removed and Reserved)
 
 PART II
 Item 5. Market for Registrants Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities
   
    
    clinical trial results;
    
    product development announcements by us or our competitors;
    
    regulatory matters;
    
    announcements in the scientific and research community;
    
    intellectual property and legal matters;
    
    broader industry and market trends unrelated to our performance; and
    
    economic markets in Asia.
  Market Information
  Quarter Ended
    
    High
    
    
    LowMarch 31, 2008
    
    $
    4.18
    
    
    $
    2.93June 30, 2008
    
    $
    3.89
    
    
    $
    2.78September 30, 2008
    
    $
    3.05
    
    
    $
    1.26December 31, 2008
    
    $
    2.00
    
    
    $
    0.69
 Quarter Ended
    
    High
    
    
    LowMarch 31, 2009
    
    $
    1.38
    
    
    $
    0.70June 30, 2009
    
    $
    1.35
    
    
    $
    0.75September 30, 2009
    
    $
    1.01
    
    
    $
    0.55December 31, 2009
    
    $
    0.60
    
    
    $
    0.22March 31, 2010
    
    $
    0.38
    
    
    $
    0.22
 Record Holders.
 Dividend Policy.
 24




---



##### Table of Contents



Securities Authorized for Issuance Under Equity Compensation Plans.
 Purchases of Securities by the Company
  Recent Sales of Unregistered Securities
    April 2007 Offering
    25




---



##### Table of Contents



December 2007 Offering
     10% Convertible Note Financing
    26




---



##### Table of Contents



12% Convertible Note Financing March and April 2010
    27




---



##### Table of Contents



28




---



##### Table of Contents



Non-Cash Financing Activities
        Equity-Based Payments to
Non-Employees,
 29




---



##### Table of Contents



30




---



##### Table of Contents



Item 6. Selected Financial Data
  
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The Company
  
    
    Manufacturer and Distributor of ONKO-SUREtm a Proprietary In-Vitro Diagnostic
(IVD) Cancer Test;
    
    Distribution of Elleuxe brand of Anti-Aging Skin Care Products;
    
    A Cancer Therapeutics Technology.
 The Companys Revised Strategic Focus
     31




---



##### Table of Contents



IV Diagnostics
 IVD Cancer Diagnostics
 ONKO-SUREtm Kit
  
    
    Exclusive five year distribution agreement with Grifols USA, LLC. This distribution
agreement allows Grifols USA, LLC to market and sell ONKO-SUREtm for the monitoring
of colorectal cancer to hospitals, clinical laboratories, clinics and other health care
organizations.
    
    Exclusive two year distribution agreement with Tarom Applied Technologies Ltd for the
marketing and sales of ONKO-SUREtm in Israel.
    
    Two distinct exclusive five year distribution agreement with GenWay Biotech, Inc. This
distribution agreement allows Genway Biotech, Inc, to market and see ONKO-SUREtm
for uses other than colorectal cancer to CLIA-certified laboratories in the US and as a lung
cancer screen to laboratories in Canada
 in- vitro
   in-vitro DR-70
 32




---



##### Table of Contents



Elleuxe Brand of Premium Anti-Aging Skin Care Products
  
    
    Hydrating Firming Cream
    
    Renergie Hydrating Cleanser
    
    Intense Hydrating Cleanser
    
    Visable Renewing Hydrating Softener
    
    Smoothing Renewing Eye Moisturizer
  33




---



##### Table of Contents



IVD Cancer Research and Development
    New Corporate Name
  China-based Integrated Pharmaceuticals
 China Pharmaceutical Manufacturing and Distribution; Discontinued Operations and Dispositions
   
    
    The forgiveness of amounts owed to YYB from JJB;and
    
    The buyer of YYB has contractually agreed to pay off the balance of the 16 million RMB
(or $2,337.541 U.S. Dollars) obligation secured by a mortgage on certain land owned by JJB.
  34




---



##### Table of Contents




    
    Lack of timely responses from the management in China to requests by Company management for
financial information;
    
    Lack of responsiveness by management in China to requests for transfer of Company funds
to bank accounts under corporate control;
    
    Lack of timely communication with Corporate management concerning significant decisions
made by management in China concerning the disposal of the YYB subsidiary; and
    
    Lack of timely communication with corporate officers concerning operations in China.
       
    
    Sales growth  based on managements expectations and historical analysis
    
    Cost of sales/Gross Margin  Based on historical analysis and management expectations
    
    Selling, General and Administrative Expenses  Based on historical analysis and management
expectations
    
    Comparable Public Companies  Based on same or similar line of business as the Company and
those that possessed similar to those of the Company.
    
    Discounts  The Company evaluated discounts related to the following:
 
    
    Lack of control
    
    Lack of marketability
    35




---



##### Table of Contents



Operations of JJB
  Facilities
    Marketing and Distribution
   New Beauty Formulations of the HPE-Based Anti-Aging Product
  36




---



##### Table of Contents



Distribution Channels for Beauty Product Lines
   The Current Chinese Economic and Market Environment
  Cancer Therapeutics
  Critical Accounting Policies
   Inventories.
 37




---



##### Table of Contents



Sales Allowances.
 Allowance for Doubtful Accounts.
 Valuation of Intangible Assets.
 
    
    significant under performance relative to expected historical or projected future
operating results;
    
    market projections for cancer research technology;
    
    its ability to obtain patents, including continuation patents, on technology;
    
    significant changes in its strategic business objectives and utilization of the assets;
    
    significant negative industry or economic trends, including legal factors;
    
    potential for strategic partnerships for the development of its patented technology; and
    
    changing or implementation of rules regarding sale of pharmaceuticals in China.
  Revenue Recognition.
  38




---



##### Table of Contents



Deferred Taxes.
 Litigation.
 Stock-Based Compensation Expense.
   Derivative Financial Instruments.
 39




---



##### Table of Contents



Wholesale Sales.
 Accounting for Consideration Given to a Customer
 Taxes Collected
from Customers and Remitted to Governmental Authorities
 Results of Operations
 Year Ended December 31, 2009 Compared to Year Ended December 31, 2008
 Net Revenues.
 Corporate
     40




---



##### Table of Contents



China-Wholesale
  
    
    Management conflicts between JPI and its subsidiary JJB;
    
    The sale of YYB; and
    
    The lack of sales of HPE solutions due to the mandatory 5-year GMP recertification by the
SFDA of JJBs small injectible line and the expiration of contracts with beauty distributors
that sell topical HPE solution.
 Gross Profit.
 Corporate
  China
   Research and Development.
  41




---



##### Table of Contents




    
    Additional expenditures for research and development is needed in China for SFDA approval
of ONKO-SUREtm test kit and the need for clinical trials in China for SFDA approval
of ONKO-SUREtm test kit;
    
    The need for research and development for an updated version of the ONKO-SUREtm
test kit in the US, clinical trials for such tests and funds for ultimate USFDA
approval; and
    
    Research and development for the HPE-based cosmetic product.
 Selling, General and Administrative Expenses. ,
 Corporate
   Year Ended December 31,2009
    
    
    2008Investor relations (including value of warrants/options)
    
    $
    864,905
    
    
    $
    1,851,033Salary and wages (including value of options)
    
    $
    2,701,530
    
    
    $
    3,859,506Directors fees (including value of options)
    
    $
    378,521
    
    
    $
    721,874Consulting fees
    
    $
    192,692
    
    
    $
    104,040Accounting and other professional fees
    
    $
    735,618
    
    
    $
    972,141Legal
    
    $
    825,727
    
    
    $
    630,939
 China-Wholesale
   Interest Expense.
 42




---



##### Table of Contents



Corporate
  China-Wholesale
  Results of Discontinued Operations
   Periods EndedDecember 312009
    
    
    2008Revenue
    
    $
    594,839
    
    
    $
    3,967,643Income (loss) before income taxes
    
    $
    277,743
    
    
    $
    1,081,021
  Income (loss) before discontinued operations.
 Liquidity and Capital Resources
  Operating activities.
  Investing activities.
 43




---



##### Table of Contents



Future Capital Needs
  China Credit Facilities
  Issuance of Securities for Services
     44




---



##### Table of Contents



Off-Balance Sheet Arrangements
  Going Concern
    45




---



##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures About Market Risk
 Foreign Currency Exchange Risk
   46




---



##### Table of Contents



Item 8. Financial Statements
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     /s/ KMJ Corbin & Company LLPKMJ Corbin & Company LLP 
 47




---



##### Table of Contents



RADIENT PHARMACEUTICALS CORPORATION
 CONSOLIDATED BALANCE SHEETS
 December 31,2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    12,145
    
    
    $
    2,287,283Accounts receivable, net
    
    
    
    
    
    
    13,575,534Inventories
    
    
    79,255
    
    
    
    1,563,991Prepaid expenses and other current assets
    
    
    57,778
    
    
    
    1,006,960Prepaid consulting
    
    
    358,667
    
    
    
    1,435,021Total current assets
    
    
    507,845
    
    
    
    19,868,789Property and equipment, net
    
    
    83,547
    
    
    
    11,709,508Intangible assets, net
    
    
    1,158,333
    
    
    
    5,311,568Receivable from JPI, net
    
    
    2,675,000
    
    
    
    Investment in JPI
    
    
    20,500,000
    
    
    
    Other assets
    
    
    1,394,361
    
    
    
    4,072,432Noncurrent assets of discontinued operations
    
    
    
    
    
    
    1,789,934Total assets
    
    $
    26,319,086
    
    
    $
    42,752,231LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued expenses
    
    $
    1,975,311
    
    
    $
    1,675,539Accrued salaries and wages
    
    
    738,331
    
    
    
    822,201Derivative liabilities
    
    
    354,758
    
    
    
    Income taxes payable
    
    
    
    
    
    
    472,860Deferred revenue
    
    
    103,128
    
    
    
    87,538Convertible note, net of discount of $2,000,649
    
    
    240,482
    
    
    
    Current portion of notes payable
    
    
    1,316,667
    
    
    
    2,662,610Current liabilities of discontinued operations
    
    
    
    
    
    
    1,151,515Total current liabilities
    
    
    4,728,677
    
    
    
    6,872,263Other long-term liabilities
    
    
    295,830
    
    
    
    353,811Notes payable, net of current portion and debt discount of $1,701,402
    
    
    601,819
    
    
    
    581,305Total liabilities
    
    
    5,626,326
    
    
    
    7,807,379Commitments and contingenciesStockholders equity:Preferred stock, $0.001 par value; 25,000,000 shares authorized; none issued and outstanding
    
    
    
    
    
    
    Common stock, $0.001 par value; 100,000,000 shares authorized; 22,682,116 and 16,006,074
shares issued at December 31, 2009 and 2008, respectively; 22,265,441 and 15,826,074 shares
outstanding at December 31, 2009 and 2008, respectively
    
    
    22,265
    
    
    
    15,826Additional paid-in capital
    
    
    73,109,048
    
    
    
    68,192,411Accumulated other comprehensive income
    
    
    
    
    
    
    2,443,452Accumulated deficit
    
    
    (52,438,553
    )
    
    
    (35,706,837
    )Total stockholders equity
    
    
    20,692,760
    
    
    
    34,944,852Total liabilities and stockholders equity
    
    $
    26,319,086
    
    
    $
    42,752,231
  48




---



##### Table of Contents



RADIENT PHARMACEUTICALS CORPORATION
 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
 Year Ended December 31,2009
    
    
    2008Net revenues
    
    $
    8,627,669
    
    
    $
    23,774,900Cost of sales
    
    
    5,360,213
    
    
    
    11,530,391Gross profit
    
    
    3,267,456
    
    
    
    12,244,509Operating expenses:Research and development
    
    
    563,690
    
    
    
    194,693Selling, general and administrative
    
    
    10,936,789
    
    
    
    10,962,05811,500,479
    
    
    
    11,156,751Income (loss) from continuing operations
    
    
    (8,233,023
    )
    
    
    1,087,758Other income (expense):Interest and other income (expense), net
    
    
    (328,071
    )
    
    
    (24,210
    )Change in fair value of derivative liabilities
    
    
    648,313
    
    
    
    Loss on deconsolidation
    
    
    (1,953,516
    )
    
    
    Interest expense
    
    
    (2,596,606
    )
    
    
    (468,531
    )Total other expense, net
    
    
    (4,229,880
    )
    
    
    (492,741
    )Income (loss) from continuing operations before provision for income taxes
    
    (12,462,903            )
    
    
    595,017Provision for income taxes
    
    
    19,115
    
    
    
    1,307,965Loss from continuing operations
    
    
    (12,482,018
    )
    
    
    (712,948
    )Income (loss) from discontinued operations, net
    
    
    (4,139,037
    )
    
    
    1,893,008Net income (loss)
    
    
    (16,621,055
    )
    
    
    1,180,060Other comprehensive gain:Foreign currency translation gain
    
    
    
    
    
    
    1,375,023Comprehensive income (loss)
    
    $
    (16,621,055
    )
    
    $
    2,555,083Basic income (loss) per common shareLoss from continuing operations
    
    $
    (0.75
    )
    
    $
    (0.05
    )Income (loss) from discontinued operations
    
    $
    (0.25
    )
    
    $
    0.12Net income (loss)
    
    $
    (1.00
    )
    
    $
    0.08Diluted income (loss) per common shareLoss from continuing operations
    
    $
    (0.75
    )
    
    $
    (0.04
    )Income (loss) from discontinued operations
    
    $
    (0.25
    )
    
    $
    0.10Net income (loss)
    
    $
    (1.00
    )
    
    $
    0.07Weighted average common shares outstanding  basic
    
    
    16,680,946
    
    
    
    15,608,697Weighted average common shares outstanding  diluted
    
    
    16,680,946
    
    
    
    18,337,162
  49




---



##### Table of Contents



RADIENT PHARMACEUTICALS CORPORATION
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 For The Years Ended December 31, 2009 and 2008
 AccumulatedAdditional
    
    
    Other
    
    
    
    
    
    
    TotalCommon Stock
    
    
    Preferred Stock
    
    
    Paid-in
    
    
    Comprehensive
    
    
    Accumulated
    
    
    StockholdersShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Income (Loss)
    
    
    Deficit
    
    
    EquityBalance, January 1, 2008
    
    
    14,979,528
    
    
    $
    14,980
    
    
    
    
    
    
    $
    
    
    
    $
    61,525,001
    
    
    $
    1,068,429
    
    
    $
    (36,886,897
    )
    
    $
    25,721,513Beneficial conversion
feature related to
Convertible Debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,635,000
    
    
    
    
    
    
    
    
    
    
    
    2,635,000Common stock issued for
cash, net of issuance
costs of $142,410
    
    
    323,626
    
    
    
    323
    
    
    
    
    
    
    
    
    
    
    
    856,948
    
    
    
    
    
    
    
    
    
    
    
    857,271Exercise of warrants
    
    
    252,733
    
    
    
    253
    
    
    
    
    
    
    
    
    
    
    
    559,277
    
    
    
    
    
    
    
    
    
    
    
    559,530Common stock issued for
consulting services
    
    
    270,187
    
    
    
    270
    
    
    
    
    
    
    
    
    
    
    
    706,780
    
    
    
    
    
    
    
    
    
    
    
    707,050Stock-based employee
and director
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,034,175
    
    
    
    
    
    
    
    
    
    
    
    1,034,175Estimated fair value of
warrants issued to
brokers for debt
issuances
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    768,604
    
    
    
    
    
    
    
    
    
    
    
    768,604Estimated fair value of
warrants and options
issued to third parties
for services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106,626
    
    
    
    
    
    
    
    
    
    
    
    106,626Translation gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,375,023
    
    
    
    
    
    
    
    1,375,023Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,180,060
    
    
    
    1,180,060Balance, December 31,
2008
    
    
    15,826,074
    
    
    
    15,826
    
    
    
    
    
    
    
    
    
    
    
    68,192,411
    
    
    
    2,443,452
    
    
    
    (35,706,837
    )
    
    
    34,944,852Common stock issued for
consulting services
    
    
    1,437,126
    
    
    
    1,438
    
    
    
    
    
    
    
    
    
    
    
    650,390
    
    
    
    
    
    
    
    
    
    
    
    651,828Stock-based employee
and director
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    666,623
    
    
    
    
    
    
    
    
    
    
    
    666,623Estimated fair value of
warrants issued to
brokers for debt
issuances
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,975,920
    
    
    
    
    
    
    
    
    
    
    
    1,975,920Estimated fair value of
warrants and options
issued to third parties
for services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,625
    
    
    
    
    
    
    
    
    
    
    
    35,625Common stock granted as
compensation to members
of the Companys Board
of Directors
    
    
    120,000
    
    
    
    120
    
    
    
    
    
    
    
    
    
    
    
    71,880
    
    
    
    
    
    
    
    
    
    
    
    72,000Stock option
modification
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    129,360
    
    
    
    
    
    
    
    
    
    
    
    129,360Voluntary conversion of
debt
    
    
    1,342,956
    
    
    
    1,342
    
    
    
    
    
    
    
    
    
    
    
    1,090,447
    
    
    
    
    
    
    
    
    
    
    
    1,091,789Common stock sold for
cash
    
    
    3,289,285
    
    
    
    3,289
    
    
    
    
    
    
    
    
    
    
    
    809,031
    
    
    
    
    
    
    
    
    
    
    
    812,320Derivative liability in
connection with stock
offering
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (509,839
    )
    
    
    
    
    
    
    
    
    
    
    (509,839
    )Common stock issued to
note holder due to
default
    
    
    250,000
    
    
    
    250
    
    
    
    
    
    
    
    
    
    
    
    72,500
    
    
    
    
    
    
    
    
    
    
    
    72,750Adoption of change in
accounting principal
related to derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (209,166
    )
    
    
    
    
    
    
    (110,661
    )
    
    
    (319,827
    )Reclassification of
derivative liability
upon expiration of
share adjustment terms
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    133,866
    
    
    
    
    
    
    
    
    
    
    
    133,866Reclassification
adjustment of
accumulated translation
gains in connection
with deconsolidation
and sale of YYB
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,443,452
    )
    
    
    
    
    
    
    (2,443,452
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,621,055
    )
    
    
    (16,621,055
    )Balance, December 31,
2009
    
    
    22,265,441
    
    
    $
    22,265
    
    
    
    
    
    
    $
    
    
    
    $
    73,109,048
    
    
    $
    
    
    
    $
    (52,438,553
    )
    
    $
    20,692,760
  50




---



##### Table of Contents



RADIENT PHARMACEUTICALS CORPORATION
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Year Ended December 31,2009
    
    
    2008Cash flows from operating activities:Net income (loss)
    
    $
    (16,621,055
    )
    
    $
    1,180,060Less: (loss) income from discontinued operations
    
    
    (4,139,037
    )
    
    
    1,893,008(12,482,018
    )
    
    
    (712,948
    )Adjustments to reconcile net income (loss) to net cash used in operating activitiesDepreciation and amortization
    
    
    1,095,771
    
    
    
    1,343,677Amortization of debt issuance costs
    
    
    1,770,377
    
    
    
    12,386Fair market value of common stock options granted to employees and directors for services
    
    
    795,983
    
    
    
    1,034,175Fair market value of common stock, warrants and options granted for services
    
    
    593,279
    
    
    
    1,617,592Fair market value of warrants accounted for as derivative liabilities
    
    
    35,558
    
    
    
    Change in fair value of derivative liabilities
    
    
    (648,313
    )
    
    
    Penalties on Cantone Debt
    
    
    192,131
    
    
    
    Provision for bad debts
    
    
    1,890,762
    
    
    
    Loss on deconsolidation
    
    
    1,953,516
    
    
    
    Gain on the settlement of accounts payable
    
    
    (47,251
    )
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    4,489,789
    
    
    
    (11,656,294
    )Related party account with Jade Capital
    
    
    
    
    
    
    880,927Inventories
    
    
    122,670
    
    
    
    (1,313,331
    )Prepaid consulting, expenses and other assets
    
    
    (3,890,720
    )
    
    
    261,059Accounts payable, accrued expenses, accrued salaries and wages and other long-term
liabilities
    
    
    1,228,486
    
    
    
    1,679,871Income taxes payable
    
    
    (320,398
    )
    
    
    794,411Deferred revenue
    
    
    15,393
    
    
    
    (172,405
    )Net cash used in operating activities of continuing operations
    
    
    (3,204,985
    )
    
    
    (6,230,880
    )Net cash provided by operating activities of discontinued operations
    
    
    101,457
    
    
    
    1,559,721Net cash used in operating activities
    
    
    (3,103,528
    )
    
    
    (4,671,159
    )Cash flows from investing activities:Purchase of property and equipment
    
    
    (1,744,065
    )
    
    
    (1,490,224
    )Cash balance divested from deconsolidation of subsidiary
    
    
    (53,658
    )
    
    
    Funds advanced to KangDa
    
    
    
    
    
    
    (635,386
    )Repayment of funds from KangDa
    
    
    
    
    
    
    655,471Payments received from notes receivable
    
    
    
    
    
    
    159,859Net cash used in investing activities
    
    
    (1,797,723
    )
    
    
    (1,310,280
    )Net cash used in investing activities of discontinued operations
    
    
    (852,955
    )
    
    
    (17,252
    )Net cash used in investing activities
    
    
    (2,650,678
    )
    
    
    (1,327,532
    )Cash flows from financing activities:Proceeds from issuance of bridgenote, net of issuance costs
    
    
    43,000
    
    
    
    Payments on notes payable
    
    
    
    
    
    
    (2,195,644
    )Proceeds from issuance of convertible debt, net of cash offering costs
    
    
    520,556
    
    
    
    2,084,401Proceeds from issuance of senior notes, net of cash offering costs
    
    
    2,088,592
    
    
    
    856,714Proceeds from issuance of common stock, net of cash offering costs
    
    
    812,320
    
    
    
    857,271Proceeds from the exercise of warrants and options, net of commission and expenses
    
    
    
    
    
    
    559,530Net cash provided by financing activities of continuing operations
    
    
    3,464,468
    
    
    
    2,162,272Net cash used in financing activities of discontinued operations
    
    
    
    
    
    
    (86,758
    )Net cash provided by financing activities
    
    
    3,464,468
    
    
    
    2,075,514Effect of exchange rates on cash and cash equivalents
    
    
    14,600
    
    
    
    52,967Net change in cash and cash equivalents
    
    
    (2,275,138
    )
    
    
    (3,870,210
    )Cash and cash equivalents, beginning of year
    
    
    2,287,283
    
    
    
    6,157,493Cash and cash equivalents, end of year
    
    $
    12,145
    
    
    $
    2,287,283
   51




---



##### Table of Contents



NOTE 1  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Nature of Business
  
    
    commercial development of, and obtaining various governmental regulatory approvals for
its proprietary diagnostic tumor-marker test kit, ONKO-SUREtm (formally
ONKO-SUREtm®), which detects the presence of multiple types of cancer, and
 
    
    the international commercialization of its Elleuxetm branded Skin Care products.
   Deconsolidation
  
    
    Lack of timely responses by the management in China to requests by Company management for
financial information;
 
    
    Lack of responsiveness by management in China to requests for transfer of Company funds
to bank accounts under corporate control;
 
    
    Lack of timely communication with Corporate management concerning significant decisions
made by management in China concerning the disposal of the YYB subsidiary; and
 
    
    Lack of timely communication with corporate officers concerning operations in China.
   52




---



##### Table of Contents









Consideration Received
    
    $
    3,405,946
    (1)Fair value of non-controlling interest
    
    
    20,500,000
    (2)23,905,946Net assets of JPI
    
    
    (25,859,462
    )(3)Loss on deconsolidation
    
    $
    (1,953,516
    )





|    |  |                                          
|--- |  | -----------------------------------------
|(1) |  | Consideration consisted of the following:

a.
    
    As part of the Agreement, the Company agreed to exchange
loans and advances to JPI totalling $5,350,000 for a 6% convertible
promissory note from JPI. These amounts were previously classified as
inter company balances and eliminated in consolidation. The exchange,
including final payment terms of the convertible promissory note, are
expected to be finalized in fiscal 2010. Due to the Companys evaluation of the collectibility of these amounts.  The Company has
recorded a reverse of $2,675,000 against the amount due from JPI.b.
    
    $730,946 of salaries and related interest which were accrued by the Company and will
be exchanged for 730,946 shares of JPI common stock.





|    |  |                                                                                                                                                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) |  | Upon deconsolidation, the Company conducted a valuation of its investment. In determining the valuation of the Companys interest in JPI
at September 29, 2010, the most significant assumptions, include the following:


    
    Sales growth  based on managements expectations
and historical analysis, which included 2010 sales of approximately
$25M and growth at a rate of 12.5% for 2011 and 2012 and 10% for 2013
and 2014. The estimated sales volumes were based on JPIs currently manufactured products and also its human
placenta extract (HPE) products with an early 2011 launch date.


The timeline for the launch of our HPE products was determined by our
internal personnel and consultants hired specifically to assist with the development at such products
    
    Cost of sales/Gross Margin  Based on historical analysis and management expectations
    
    Selling, General and Administrative Expenses  Based on historical analysis and management
expectations
    
    Comparable Public Companies  Based on the same or similar line of business and various other
quantitative and qualitative characteristics, as discussed herein.
    
    Risk adjusted weighted average cost of capital (WACC)  A WACC of 17.7% was utilized.
    
    Long term growth rate: we assumed a long term growth rate of 6%
    
    Terminal value: Determined to be $57M which was based on a
forecasted EBITDA in 2014 multiplied by a market based valuation multiple.
    
    Product revenue: The analysis included JPIs currently manufactured products and also human placenta extract products with an early 2011 launch date.
    
    Cost of Debt  An examination of the industrys cost of debt as reflected by an examination of similar
sized companies indicated that an appropriate rate on long-term debt was best provided for by examining the Moodys
Ba1 (speculative grade) rate as of the Valuation Date, which was found to be an after tax cost of debt of 5.82%.
    
    Cost of Equity  The cost of equity was determined to be 22.58% and included the following variables: 
    
    Risk free rate: 4.02%
    
    Equity risk premium: 6.47%
    
    Small stock risk premium: 5.82%
    
    Beta: 1.66x (which was based on an analysis utilized an industry beta derived from a selection of comparable
companies as well as by sector)
    
    Subject Company Risk Premium: 2%
 
    
    Discounts  The Company evaluated discounts related to the following:
 
    
    Lack of control
    
    Lack of marketability
    
 (3)
    
    The net assets of JPI consisted of the following: Cash
    
    $
    53,658Other current assets
    
    
    18,920,177Property and equipment
    
    
    9,381,118Other long term assets
    
    
    3,464,715Total assets
    
    $
    31,819,668Current portion of notes payable
    
    $
    (2,673,154
    )Other current liabilities
    
    
    (1,122,936
    )Other comprehensive income
    
    
    (2,164,116
    )Total liabilities
    
    $
    (5,960,206
    )Net Assets
    
    $
    25,859,462
  Year Ended
    
    
    Pro Forma
    
    
    Pro formaDecember 31, 2009 [1]
    
    
    Adjustments [2]
    
    
    Results[3]Net revenues
    
    $
    8,627,669
    
    
    $
    (8,469,652
    )
    
    $
    158,017Cost of sales
    
    
    5,360,213
    
    
    
    (5,322,542
    )
    
    
    37,671Gross profit
    
    
    3,267,456
    
    
    
    (3,147,110
    )
    
    
    120,346Operating expenses:Research and development
    
    
    563,690
    
    
    
    
    
    
    
    563,690Selling, general and administrative
    
    
    10,936,789
    
    
    
    (4,371,596
    )
    
    
    6,565,19311,500,479
    
    
    
    (4,371,596
    )
    
    
    7,128,883Income (loss) from operations
    
    
    (8,233,023
    )
    
    
    1,224,486
    
    
    
    (7,008,537
    )Other income (expense):Interest and other income (expense), net
    
    
    (328,071
    )
    
    
    (310
    )
    
    
    (328,381
    )Change in fair value of derivative liabilities
    
    
    648,313
    
    
    
    
    
    
    
    648,313Loss on
deconsolidation (4)
    
    
    (1,953,516
    )
    
    
    
    
    
    
    (1,953,516
    )Interest expense
    
    
    (2,596,606
    )
    
    
    173,335
    
    
    
    (2,423,271
    )Total other income (expense), net
    
    
    (4,229,880
    )
    
    
    173,025
    
    
    
    (4,056,855
    )Income
(loss) from continuing operations before provision for income taxes
    
    
    (12,462,903
    )
    
    
    1,397,511
    
    
    
    (11,065,392
    )Provision for income taxes
    
    
    19,115
    
    
    
    
    
    
    
    19,115Income
(loss) from continuing operations
    
    $
    (12,482,018
    )
    
    $
    1,397,511
    
    
    $
    (11,084,507
    )
 
 [1]
    
    Represents the Companys actual (as reported)
consolidated results of operations for the year ended December
31, 2009.[2]
    
    Pro Forma Adjustments represents JPIs results of operations
for the period January 1, 2009 through September 29, 2009. See Note 13 for additional information
related to JPIs  operations. This
information is presented to show the effect of the elimination of
JPIs operations from the Companys business. In accordance with
the deconsolidation agreement, the Company agreed to exchange its shares
of JPI for non-voting shares of preferred stock in the
deconsolidated entity. Accordingly, there are no adjustments
related to revised debt structures and there were no significant
expenses incurred on JPIs behalf.[3]
    
    Pro forma results are equal to the historical condensed results
of operations of the surviving Company for the year ended
December 31, 2009. The pro forma results do not necessarily
represent the actual results that would have been achieved had
the companies been deconsolidated at the beginning of the year, nor may
they be indicative of future operations.[4]
    
    As noted above, this table assumes an effective date of
January 1, 2009. Accordingly, while the activity for the year ended
December 31, 2009 would be eliminated, the recording of the
deconsolidation would result in a loss on January 1, 2009 and
result in a loss being recorded for the year ended December 31,
2009. 53




---



##### Table of Contents



Discontinued Operations and Dispositions
   Sales price
    
    $
    2,337,541Carrying value of net assets
    
    
    6,723,605Loss on sale
    
    $
    (4,386,064
    )
  Year Ended December 31,2009
    
    
    2008Revenue
    
    $
    594,839
    
    
    $
    3,967,643Income before income taxes
    
    $
    277,743
    
    
    $
    1,081,021
 54




---



##### Table of Contents



As ofJune 26, 2009
    
    
    As of December 31,(Date of Sale)
    
    
    2008Current assets:Cash
    
    $
    1,044,550
    
    
    $
    Accounts receivable, net
    
    
    1,094,399
    
    
    
    930,769Inventories
    
    
    584,886
    
    
    
    423,842Other current assets
    
    
    3,975
    
    
    
    80,410$
    2,727,810
    
    
    $
    1,435,021Long-lived assets:Property and equipment
    
    
    2,097,076
    
    
    $
    1,742,739Other
    
    
    3,040,406
    
    
    
    47,195$
    5,137,482
    
    
    $
    1,789,934Current liabilities:Accounts payable and accrued liabilities
    
    
    569,188
    
    
    
    685,360Debt
    
    
    572,500
    
    
    
    466,155$
    1,141,688
    
    
    $
    1,151,515
 55




---



##### Table of Contents



Going Concern
        56




---



##### Table of Contents



Principles of Consolidation
  Reclassifications
  Revenue Recognition
  Wholesale Sales
   Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendors
Products), (
  57




---



##### Table of Contents



Taxes Collected from Customers and Remitted to
Governmental Authorities,
 Accounting for Shipping and Handling Revenue, Fees and Costs
 Shipping and Handling Fees and Costs
 Other Comprehensive Income and Foreign Currency Translation
 Comprehensive Income
   Research and Development
  Cash Equivalents
  Inventories
  58




---



##### Table of Contents



Property and Equipment
  Machinery and equipment, including lab equipment
    
    5 to 15 yearsOffice equipment
    
    3 to 5 years
  Intangible Assets
  Impairment of Long-Lived Assets
 Accounting for the Impairment or Disposal of Long-Lived
Assets
 
    
    significant under performance relative to expected historical or projected future
operating results;
    
    market projections for cancer research technology;
    
    its ability to obtain patents, including continuation patents, on technology;
    
    significant changes in its strategic business objectives and utilization of the assets;
    
    significant negative industry or economic trends, including legal factors;
    
    potential for strategic partnerships for the development of its patented technology;
    
    changing or implementation of rules regarding manufacture or sale of pharmaceuticals in
China; and
    
    ability to maintain Good Manufacturing Process (GMP) certifications.
  59




---



##### Table of Contents



Risks and Uncertainties
       Risks and Uncertainties
  60




---



##### Table of Contents



Share-Based Compensation
  Equity-Based Payments
to Non-Employees,
  Stock
Compensation
 61




---



##### Table of Contents



Basic and Diluted Income (Loss) Per Share
  2009
    
    
    2008Numerator:Net income (loss)
    
    $
    (16,621,055
    )
    
    $
    1,180,060Numerator for basic per share amounts  income available (loss
attributable) to common stockholders
    
    $
    (16,621,055
    )
    
    $
    1,180,060Interest on convertible debt
    
    
    
    
    
    
    73,581Numerator for diluted per share amounts
    
    $
    (16,621,055
    )
    
    $
    1,253,641Denominator:Denominator for basic per share amounts  weighted-average shares
    
    
    16,608,946
    
    
    
    15,608,697Effect of dilutive securities:Options and warrants  dilutive potential common shares
calculated using the treasury stock method
    
    
    
    
    
    
    573,593Incremental shares from assumed conversion  convertible debt
    
    
    
    
    
    
    2,154,872Denominator for diluted per share amounts
    
    
    16,680,946
    
    
    
    18,337,162Basic income (loss) per common share
    
    $
    (1.00
    )
    
    $
    0.08Diluted income (loss) per common share
    
    $
    (1.00
    )
    
    $
    0.07
   Income Taxes
 740-10, Income Taxes ( ).
  62




---



##### Table of Contents



Use of Estimates
  Fair Value of Financial Instruments
  Derivative Financial Instruments
 Derivatives and Hedging
    63




---



##### Table of Contents



Fair Value Measurements
  Level 1
 Level 2
 Level 3
   Level 3CarryingValueDecember 31, 2009Embedded conversion options
    
    $
    269,758Warrants
    
    
    85,000$
    354,758Decrease in fair value included in other income (expense)
    
    $
    648,313
  Balance at January 1, 2009
    
    $
    Derivative liabilities added  warrants
    
    
    250,000Derivative liabilities added  conversion options
    
    
    770,256Amount converted to additional paid-in capital for the conversion of debt
    
    
    (17,185
    )Change in fair value
    
    
    (648,313
    )Balance at December 31, 2009
    
    $
    354,758
 64




---



##### Table of Contents



Advertising Costs
  Concentrations of Credit Risk
 Cash
  Customers
   Supplemental Cash Flow Information
 2009
    
    
    2008Supplemental disclosure of cash flow information:Cash paid during the period for interest
    
    $
    323,201
    
    
    $
    332,233Cash paid during the period for taxes
    
    $
    695,322
    
    
    $
    2,562,485Supplemental disclosure of non-cash activities:Warrants issued to brokers, included in prepaid consulting
    
    $
    88,000
    
    
    $
    Warrants issued in connection with senior notes and bridge loan included in debt discount
    
    $
    1,887,920
    
    
    $
    Reclassification of amounts recorded to additional paid-in capital to warrant liability,
including $110,858 recorded to retained earnings, representing the change in value of
the warrants from date of issuance to January 1, 2009
    
    $
    209,166
    
    
    $
    Reclassification of derivative liability related to warrants to additional paid-in
capital upon expiration of share adjustment terms
    
    $
    133,866
    
    
    $
    Conversion of warrants to common stock
    
    $
    38
    
    
    $
    Voluntary conversion of convertible debt and accrued interest
    
    $
    1,074,605
    
    
    $
    Conversion of accounts payable to stock
    
    $
    75,751
    
    
    $
    Broker warrants issued in connection with convertible debt
    
    $
    
    
    
    $
    209,166Broker warrants issued in connection with senior debt
    
    $
    
    
    
    $
    559,438Receipt of machines as partial settlement of note receivable
    
    $
    
    
    
    $
    472,451Derivative asset recorded in issuance of convertible debt
    
    $
    
    
    
    $
    125,000Fair value of common stock recorded as prepaid consulting
    
    $
    
    
    
    $
    527,801Fair value of warrants issued for services, included in prepaid expense
    
    $
    283,951
    
    
    $
    83,875Carrying value of net assets of JPI before deconsolidation
    
    $
    25,698,405
    
    
    $
    Fair value of derivative liabilities
    
    $
    1,020,256
    
    
    $
    Conversion of accrued salaries to ownership of JPI
    
    $
    730,496
    
    
    $
    
 65




---



##### Table of Contents



Recent Accounting Pronouncements
 Measuring Liabilities at Fair Value
 Accounting for Own-Share Lending
Arrangements in Contemplation of Convertible Debt Issuance
   NOTE 2  INVENTORIES
  December 31,2009
    
    
    2008Raw materials
    
    
    48,852
    
    
    $
    719,389Work-in-process
    
    
    3,265
    
    
    
    11,808Finished goods
    
    
    27,138
    
    
    
    832,794$
    79,255
    
    
    $
    1,563,991
 NOTE 3  PROPERTY AND EQUIPMENT
  December 31,2009
    
    
    2008Building and improvements
    
    $
    
    
    
    $
    7,774,591Machinery and equipment
    
    
    
    
    
    
    4,233,129Office equipment
    
    
    120,019
    
    
    
    431,049Lab equipment
    
    
    71,755
    
    
    
    12,372Construction in progress
    
    
    
    
    
    
    1,229,319191,774
    
    
    
    13,680,460Less accumulated depreciation
    
    
    (108,227
    )
    
    
    (1,970,872
    )$
    83,547
    
    
    $
    11,709,588
  66




---



##### Table of Contents



NOTE 4  INTANGIBLE ASSETS
  Gross
    
    
    Accumulated
    
    
    
    
    
    
    AmortizationValue
    
    
    Amortization
    
    
    Net
    
    
    (in years)Assets subject to amortization:Intellectual property
    
    $
    2,000,000
    
    
    $
    (841,667
    )
    
    $
    1,158,333
    
    
    
    20
  Effect ofForeignGross
    
    
    Accumulated
    
    
    Currency
    
    
    
    
    
    
    AmortizationValue
    
    
    Amortization
    
    
    Translation
    
    
    Net
    
    
    (in years)Assets subject to amortization:Intellectual property
    
    $
    2,000,000
    
    
    $
    (741,667
    )
    
    
    
    
    
    $
    1,258,333
    
    
    
    20Production rights
    
    
    1,916,622
    
    
    
    (318,986
    )
    
    
    154,007
    
    
    
    1,751,643
    
    
    
    10Land use rights
    
    
    1,354,765
    
    
    
    (99,094
    )
    
    
    209,839
    
    
    
    1,465,510
    
    
    
    33Non-compete agreements
    
    
    324,415
    
    
    
    (163,652
    )
    
    
    32,483
    
    
    
    193,246
    
    
    
    5Customer relationships
    
    
    214,328
    
    
    
    (77,904
    )
    
    
    26,569
    
    
    
    162,993
    
    
    
    7Trade name and logo
    
    
    530,829
    
    
    
    (129,041
    )
    
    
    78,055
    
    
    
    479,843
    
    
    
    10$
    6,340,959
    
    
    $
    (1,530,344
    )
    
    $
    500,953
    
    
    $
    5,311,568
     NOTE 5  PREPAID EXPENSES, OTHER CURRENT ASSETS, AND OTHER ASSETS
  December 31,2009
    
    
    2008Material deposits
    
    $
    
    
    
    $
    627,390Due from officers and directors
    
    
    
    
    
    
    9,693Current deferred tax asset
    
    
    
    
    
    
    92,798Prepaid Insurance
    
    
    52,703
    
    
    
    143,566Other
    
    
    5,075
    
    
    
    133,513$
    57,778
    
    
    $
    1,006,960
 67




---



##### Table of Contents



December 31,2009
    
    
    2008Deposits, primarily product licenses
    
    $
    
    
    
    $
    3,000,354Debt issuance costs (Note 7)
    
    
    1,288,910
    
    
    
    906,408Convertible Debt derivative (Note 7)
    
    
    80,913
    
    
    
    125,000Refundable deposits
    
    
    24,538
    
    
    
    40,670$
    1,394,361
    
    
    $
    4,072,432
  NOTE 6  INCOME TAXES
  2009
    
    
    2008Current:Federal
    
    $
    (2,000
    )
    
    $
    State
    
    
    1,000
    
    
    
    1,000Foreign
    
    
    
    
    
    
    1,815,000Total current
    
    
    (1,000
    )
    
    
    1,816,000Deferred:Foreign
    
    
    
    
    
    
    (92,000
    )Provision for income taxes
    
    $
    (1,000
    )
    
    $
    1,724,000
  2009
    
    
    2008United States
    
    $
    (11,748,766
    )
    
    $
    (9,794,491
    )Foreign
    
    
    (5,225,636
    )
    
    
    12,698,064$
    (16,974,202
    )
    
    $
    2,903,573
  68




---



##### Table of Contents



2009
    
    
    2008Computed tax benefit at federal statutory rate
    
    $
    (5,772,000
    )
    
    $
    987,000State income tax benefit, net of federal benefit
    
    
    1,000
    
    
    
    1,000Nondeductible Interest Expense
    
    
    731,000
    
    
    
    Deferred Gain on JPI
    
    
    5,518,000
    
    
    
    Foreign earnings taxed at different rates
    
    
    1,776,000
    
    
    
    (2,609,000
    )Stock issuances
    
    
    481,000
    
    
    
    640,000Expired Net Operating Losses
    
    
    546,000
    
    
    
    Valuation allowance on federal tax benefit
    
    
    (3,285,000
    )
    
    
    2,685,000Other
    
    
    3,000
    
    
    
    20,000$
    (1,000
    )
    
    $
    1,724,000
  December 31,2009
    
    
    2008Deferred tax asset:Net operating loss carryforwards
    
    $
    15,529,000
    
    
    $
    13,288,000Expenses recognized for granting of options and warrants
    
    
    1,727,000
    
    
    
    2,036,000Tax credit carryforwards
    
    
    245,000
    
    
    
    216,000Depreciation
    
    
    3,000
    
    
    
    Other temporary differences
    
    
    309,000
    
    
    
    408,000Total gross deferred tax asset
    
    
    17,813,000
    
    
    
    15,948,000Valuation allowance
    
    
    (11,698,000
    )
    
    
    (15,663,000
    )Net deferred tax asset
    
    
    6,115,000
    
    
    
    285,000Deferred tax liabilities:Deferred Gain on JPI
    
    
    (6,115,000
    )
    
    
    Depreciation
    
    
    
    
    
    
    (193,000
    )Total deferred tax liabilities
    
    
    (6,115,000
    )
    
    
    (193,000
    )Net deferred tax asset
    
    $
    
    
    
    $
    92,000
   69




---



##### Table of Contents



2009
    
    
    2008Unrecognized Tax Benefits:Balance at beginning of year
    
    $
    52,000
    
    
    $
    123,000Increase/(Decrease) for tax positions taken during the current period
    
    
    
    
    
    
    10,000Increase/(Decrease) for tax positions taken in prior years, net
    
    
    1,000
    
    
    
    (81,000
    )Balance at end of year
    
    $
    53,000
    
    
    $
    52,000
  NOTE 7  NOTES PAYABLE
  December 31,2009
    
    
    2008Convertible Debt, net of unamortized discount, inclusive of
bonus interest, of $2,000,649 and $3,765,000 at December 31,
2009 and 2008, respectively
    
    $
    240,482
    
    
    $
    Senior Notes payable, net of unamortized discount of
$1,701,398 and $496,195 at December 31, 2009 and 2008,
respectively
    
    
    1,918,486
    
    
    
    581,305Bank debt
    
    
    
    
    
    
    3,128,7652,158,968
    
    
    
    3,710,070Less: Bank debt associated with discontinued operations of YYB
    
    
    
    
    
    
    (466,155
    )Less: Current portion of long-term debt
    
    
    (1,316,667
    )
    
    
    (2,662,610
    )Less: Current portion of convertible note
    
    
    (240,482
    )
    
    
    $
    601,819
    
    
    $
    581,305
 Convertible Debt
  70




---



##### Table of Contents



Investments-Debt and Equity Debt with Conversion and Other Options
   71




---



##### Table of Contents



The Convertible Note and Warrant Purchase Agreement
     The Bridge Loan Agreement
  72




---



##### Table of Contents



Consulting Agreement
   Senior Notes Payable
    73




---



##### Table of Contents



74




---



##### Table of Contents



Debt Repayment Obligations
  2010
    
    $
    3,557,7982011
    
    
    888,2242012
    
    
    1,414,997$
    5,861,019
  NOTE 8  EMPLOYMENT CONTRACT TERMINATION LIABILITY
  NOTE 9  COMMITMENTS AND CONTINGENCIES
 Operating Leases
  75




---



##### Table of Contents



Litigation
     Licensing Agreements
  Contingent Issuance of Shares  Acquisition of JPI
   76




---



##### Table of Contents



Indemnities and Guarantees
  Tax Matters
  Change in Control Severance Plan
  NOTE 10  SHARE-BASED COMPENSATION
  77




---



##### Table of Contents



78




---



##### Table of Contents



Summary of Assumptions and Activity
  Expected volatility
    
    
    111
    %Expected term
    
    5 yearsRisk-free interest rate
    
    
    2.48
    %Dividend yield
    
    
    
    %
       79




---



##### Table of Contents



2009
    
    
    2008Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    ExerciseOptions
    
    
    Price
    
    
    Options
    
    
    PriceOutstanding and exercisable, beginning of year
    
    
    2,757,001
    
    
    $
    2.56
    
    
    
    2,093,239
    
    
    $
    3.97Granted
    
    
    
    
    
    
    
    
    
    
    850,000
    
    
    
    3.45Expired/forfeited
    
    
    (899,000
    )
    
    
    3.88
    
    
    
    (186,238
    )
    
    
    4.81Outstanding and expected to vest, end of year (1)
    
    
    1,858,001
    
    
    $
    1.90
    
    
    
    2,757,001
    
    
    $
    3.75Vested and exercisable, end of year
    
    
    1,753,626
    
    
    $
    1.91
    
    
    
    2,444,918
    
    
    $
    3.79
 
 (1)
    
    Includes the repricing of 1,129,000 options from exercise prices ranging from $2.85 -
$4.65 to a modified exercise price of $0.75.  NOTE 11  STOCK WARRANTS
      80




---



##### Table of Contents



81




---



##### Table of Contents



2009
    
    
    2008Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    ExerciseWarrants
    
    
    Price
    
    
    Warrants
    
    
    PriceOutstanding and exercisable, beginning of year
    
    
    5,252,699
    
    
    $
    3.38
    
    
    
    4,528,668
    
    
    $
    3.98Granted
    
    
    6,688,970
    
    
    
    1.02
    
    
    
    1,469,180
    
    
    
    1.91Expired/forfeited
    
    
    (1,548,382
    )
    
    
    2.85
    
    
    
    (492,416
    )
    
    
    5.00Exercised
    
    
    
    
    
    
    
    
    
    
    (252,733
    )
    
    
    2.34Outstanding and exercisable, end of year
    
    
    10,393,287
    
    
    $
    1.84
    
    
    
    5,252,699
    
    
    $
    3.38
  WeightedAverageNumber of
    
    
    RemainingWarrant
    
    
    ContractualExercise Price
    
    Shares
    
    
    Life (Years)$3.68
    
    
    1,180,632
    
    
    
    0.83$4.74
    
    
    1,366,319
    
    
    
    2.00$0.60
    
    
    116,000
    
    
    
    1.69$2.69
    
    
    209,166
    
    
    
    3.71$1.00
    
    
    948,200
    
    
    
    3.94$1.13
    
    
    598,400
    
    
    
    4.08$0.98
    
    
    2,335,960
    
    
    
    4.34$1.11
    
    
    824,560
    
    
    
    4.44$0.66
    
    
    403,621
    
    
    
    4.65$0.60
    
    
    200,000
    
    
    
    4.69$0.65
    
    
    500,000
    
    
    
    4.71$1.25
    
    
    1,710,429
    
    
    
    0.4210,393,287
  NOTE 12  STOCKHOLDERS EQUITY
 Preferred Stock
  Common Stock
  82




---



##### Table of Contents



December 2007 Offering
   November 2007 Offering
  Common Stock Issued for Services
   83




---



##### Table of Contents



84




---



##### Table of Contents



NOTE 13  SEGMENT REPORTING
   China
    
    
    Corporate
    
    
    TotalNet revenue
    
    $
    8,469,652
    
    
    $
    158,017
    
    
    $
    8,627,669Gross profit
    
    $
    3,147,110
    
    
    $
    120,346
    
    
    $
    3,267,456Depreciation and amortization
    
    $
    888,589
    
    
    $
    207,182
    
    
    $
    1,095,771Interest expense
    
    $
    81,834
    
    
    $
    2,423,271
    
    
    $
    2,596,606Loss before discontinued operations
    
    $
    (1,397,511
    )
    
    $
    (11,084,507
    )
    
    $
    (12,482,018
    )Capital expenditures
    
    $
    1,447,356
    
    
    $
    296,709
    
    
    $
    1,744,065
 85




---



##### Table of Contents



China
    
    
    Corporate
    
    
    TotalNet revenue
    
    $
    23,694,678
    
    
    $
    80,222
    
    
    $
    23,774,900Gross profit
    
    $
    12,184,904
    
    
    $
    59,605
    
    
    $
    12,244,509Depreciation and amortization
    
    $
    1,219,487
    
    
    $
    124,190
    
    
    $
    1,343,677Interest expense
    
    $
    367,970
    
    
    $
    100,561
    
    
    $
    468,531Income (loss) before discontinued operations
    
    $
    10,508,239
    
    
    $
    (9,795,291
    )
    
    $
    712,948Capital expenditures
    
    $
    1,302,038
    
    
    $
    205,438
    
    
    $
    1,507,476
 NOTE 14  RELATED PARTY TRANSACTIONS
    NOTE 15  SUBSEQUENT EVENTS
  NYSE Amex Listing
  86




---



##### Table of Contents



Defaults on Prior Note Financings: Proposed Debt Exchanges
     87




---



##### Table of Contents



St. George Convertible Note and Warrant Purchase Agreement Defaults and Waivers; Note Conversions
and Warrant Exercises After January 1, 2010
   Note and Warrant Purchase Agreements- March and April 2010
  88




---



##### Table of Contents



Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Disclosure Controls and Procedures
   Managements Report on Internal Control Over Financial Reporting
  
    
    Pertain to the maintenance of records that in reasonable detail accurately and fairly
reflect the transactions and dispositions of our assets;
    
    Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with accounting principles generally
accepted in the United States and that our receipts and expenditures are being made only in
accordance with authorizations of our management and directors; and
 89




---



##### Table of Contents




    
    Provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition or disposition of our assets that could have a material effect on the financial
statements.
 Internal Control  Integrated Framework
       Remediation of Material Weakness
     90




---



##### Table of Contents



Inherent Limitations Over Internal Controls
    Changes in Internal Control Over Financial Reporting
  
 Item 9B. Other Information
  91




---



##### Table of Contents



PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
  Year FirstName
    
    Age
    
    Elected
    
    Position(s)Douglas C. MacLellan
    
    
    54
    
    
    
    1991
    
    
    Executive Chairman and Chief Executive OfficerAkio Ariura
    
    
    52
    
    
    
    2006
    
    
    Chief Financial Officer and SecretaryMichael Boswell
    
    
    40
    
    
    
    2008
    
    
    DirectorWilliam M. Thompson
III, M.D.
    
    
    82
    
    
    
    1989
    
    
    DirectorEdward R. Arquilla,
M.D., Ph.D.
    
    
    87
    
    
    
    1997
    
    
    DirectorMinghui Jia
    
    
    49
    
    
    
    2006
    
    
    Director
 Mr. MacLellan
 Mr. Ariura
 Mr. Boswell
 92




---



##### Table of Contents



93




---



##### Table of Contents



Dr. Thompson
 Dr. Arquilla
 Mr. Minghui Jia
 Communications with Directors
  Board of Directors Meetings
  Section 16(a) Beneficial Ownership Reporting Compliance
   94




---



##### Table of Contents



Code of Ethics for Financial Professionals
  Audit Committee and Financial Expert
    
 Item 11. Executive Compensation
  95




---



##### Table of Contents



SUMMARY COMPENSATION TABLE
 Non-Equity
    
    Non-Incentive
    
    qualifiedPlan
    
    DeferredCompens
    
    Compens
    
    All OtherName and
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock
    
    Option
    
    ation
    
    ation
    
    CompensPrincipal
    
    
    
    
    
    Salary
    
    Bonus
    
    Awards
    
    Awards
    
    Earnings
    
    Earnings
    
    ation
    
    TotalPosition
    
    Year
    
    ($)
    
    ($)
    
    ($)
    

($)(8)
    
    ($)
    
    ($)
    
    ($)
    
    ($)Gary L. Dreher(1)
    
    
    2009
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Gary L. Dreher President & CEO(1)
    
    
    2008
    
    
    $
    541,667
    
    
    $
    100,000
    
    
    $
    
    
    
    $
    500,420
    (2)
    
    $
    
    
    
    $
    
    
    
    $
    164,815
    (3)(4)
    
    $
    1,306,902Douglas MacLellan,
    
    
    2009
    
    
    $
    360,000
    
    
    $
    30,000
    
    
    $
    
    
    
    $
    127,940
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    517,940President, CEO & Chairman
    
    
    2008
    
    
    $
    
    
    
    $
    60,000
    (6)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    180,000
    (5)
    
    $
    240,000Douglas MacLellan, President,CEO & Chairman(1)Akio Ariura, CFO
    
    
    2009
    
    
    $
    300,000
    
    
    $
    20,000
    
    
    $
    
    
    
    $
    40,900
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    360,900Akio Ariura
    
    
    2008
    
    
    $
    218,749
    
    
    $
    20,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    238,749Frank Zheng(7)
    
    
    2009
    
    
    $
    186,667
    
    
    $
    
    
    
    $
    
    
    
    $
    20,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    206,667Frank Zheng
    
    
    2008
    
    
    $
    360,000
    
    
    $
    85,000
    
    
    $
    
    
    
    $
    48,958
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    493,958Minghui Jia(7)
    
    
    2009
    
    
    $
    186,667
    
    
    $
    
    
    
    $
    
    
    
    $
    20,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    206,667Minghui Jia
    
    
    2008
    
    
    $
    240,000
    
    
    $
    85,000
    
    
    $
    
    
    
    $
    48,958
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    373,958
 
 (1)
    
    Effective as of October 31, 2008, Mr. Dreher resigned from all of his
positions; Mr. MacLellan replaced Mr. Dreher as our President, Chief
Executive Officer and Chairman in November 2008.(2)
    
    The value of option awards included in this column represents the
compensation costs recognized by the Company in fiscal year 2008 for
option awards made or modified in 2008 calculated pursuant to ASC 718.
The values included within this column have not been, and may never be
realized. The options might never be exercised and the value received
by Mr. Dreher, if any, will depend on the share price on the exercise
date. The assumptions we used with respect to the valuation of the
option awards are set forth in the Notes to our Consolidated Financial
Statements, which are included in our Form 10-K for the year ending
December 31, 2009. There were no forfeitures during the year.(3)
    
    Mr. Drehers perquisites and other personal benefits include certain
amounts for life insurance, car allowance and membership dues
aggregate $14,815.(4)
    
    Effective as of October 31, 2008, Mr. Dreher resigned and his
compensation as an executive officer ceased as of such date. He
received $125,000 upon the effective date of his Severance Agreement,
and we paid $25,000 of his legal expenses. In addition, we agreed to
pay Mr. Dreher $540,000 in monthly installments of $18,000, commencing
January 31, 2009 for consulting services, as well as continuation of
certain insurance coverages.(5)
    
    As Chairman of our Compensation Committee and as Chairman of our
Governance and Audit Committees, Douglas MacLellan received an
additional $15,000 per month.(6)
    
    Pursuant to Mr. MacLellans appointment as our President and CEO in
November 2008, he earned a bonus of $60,000 for the quarter ended
December 31, 2008. 96




---



##### Table of Contents



(7)
    
    Due to the compensation received, we are including Mr. Zheng
(a former director of the Company and current director of JPI) and Mr. Jia
(one of our directors) in this table since disclosure would be required but for the fact that they
were not serving as an executive officer at the end of the last completed fiscal year.(8)
    
    Represents the fair vale of the repriced options during 2009. Employment Agreements
   97




---



##### Table of Contents



Outstanding Equity Awards at Fiscal Year End
 Equity IncentivePlan Awards:Number of
    
    
    Number of
    
    
    Number ofSecurities
    
    
    Securities
    
    
    SecuritiesUnderlying
    
    
    Underlying
    
    
    UnderlyingUnexercised
    
    
    Unexercised
    
    
    Unexercised
    
    
    Option
    
    
    OptionOptions (#)
    
    
    Options (#)
    
    
    Unearned
    
    
    Exercise
    
    
    ExpirationName
    
    Exercisable
    
    
    Unexercisable
    
    
    Options (#)
    
    
    Price ($/Sh)
    
    
    Date(a)
    
    (b)
    
    
    (c)
    
    
    (d)
    
    
    (e)
    
    
    (f)Gary Dreher
    
    
    60,001
    
    
    
    
    
    
    
    
    
    
    
    2.85
    
    
    
    2/27/2011200,000
    
    
    
    
    
    
    
    
    
    
    
    3.70
    
    
    
    10/8/2011172,000
    
    
    
    
    
    
    
    
    
    
    
    4.06
    
    
    
    5/31/2012262,500
    
    
    
    37,500
    
    
    
    
    
    
    
    3.45
    
    
    
    3/3/2013Douglas MacLellan
    
    
    36,000
    
    
    
    
    
    
    
    
    
    
    
    0.75
    
    
    
    2/27/2011120,000
    
    
    
    
    
    
    
    
    
    
    
    0.75
    
    
    
    10/8/201190,000
    
    
    
    
    
    
    
    
    
    
    
    0.75
    
    
    
    5/31/2012175,000
    
    
    
    25,000
    
    
    
    
    
    
    
    0.75
    
    
    
    3/3/2013Akio Ariura
    
    
    40,000
    
    
    
    
    
    
    
    
    
    
    
    0.75
    
    
    
    10/8/201150,000
    
    
    
    
    
    
    
    
    
    
    
    0.75
    
    
    
    5/31/201243,750
    
    
    
    6,250
    
    
    
    
    
    
    
    0.75
    
    
    
    3/3/2013Frank Zheng
    
    
    43,750
    
    
    
    6,250
    
    
    
    
    
    
    
    0.75
    
    
    
    3/3/2013Minghui Jia
    
    
    43,750
    
    
    
    6,250
    
    
    
    
    
    
    
    0.75
    
    
    
    3/3/2013
 Market Value of
    
    Equity Incentive Plan
    
    Equity IncentiveNumber of Shares
    
    Shares of
    
    Awards: Number of
    
    Plan Awards: Marketor Units of Stock
    
    Units of
    
    Unearned Shares, Units or
    
    or Payout Value ofThat Have
    
    Stock That Have
    
    Other Rights That Have
    
    Unearned Shares,Not Vested
    
    Not Vested
    
    Not Vested
    
    Units or Other RightsName
    
    (#)
    
    ($)
    
    (#)
    
    That Have Not Vested(a)
    
    (g)
    
    (h)
    
    (i)
    
    (j)Gary Dreher
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Douglas MacLellan
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Akio Ariura
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Frnak Zheng
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Minghui Jia
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
 98




---



##### Table of Contents



2008-2009 Performance and Equity Incentive Plan
  Change in Control Severance Pay Plan
       99




---



##### Table of Contents



Director Compensation
  NonqualifiedNon-equity
    
    
    DeferredStock
    
    
    Option
    
    
    Incentive Plan
    
    
    Compensation
    
    
    All otherFees Earned or
    
    
    Awards
    
    
    Awards
    
    
    Compensation
    
    
    Earnings
    
    
    Compensation on
    
    
    TotalName
    
    Paid in Cash ($)
    
    
    ($)(1)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)William M. Thompson, III, MD
    
    $
    1,000
    
    
    $
    24,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    25,000Michael Boswell
    
    $
    37,500
    
    
    $
    24,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    61,500Edward R Arquilla, MD, PhD
    
    $
    15,500
    
    
    $
    24,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    39,500
 
 (1)
    
    On January 7, 2009, the Company granted 40,000 shares of common stock
to each of the Companys three independent directors, subject to
stockholder approval. The grant was based on performance through 2008.
On August 21, 2009, the Companys stockholders approved the total
grant of 120,000 shares of common stock and approximately $72,000 in
expense has been recorded based on the stock price at August 21, 2009.   
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
 Equity Compensation Plan Information
  Number of SecuritiesRemaining Availablefor Future IssuanceNumber of
    
    
    
    
    
    
    Under EquitySecurities to be
    
    
    
    
    
    
    CompensationIssued Upon
    
    
    Weighted-Average
    
    
    Plans (ExcludingExercise of
    
    
    Exercise Price of
    
    
    SecuritiesOutstanding Options,
    
    
    Outstanding Options,
    
    
    Reflected in ColumnPlan Category
    
    Warrants and Rights
    
    
    Warrants and Rights
    
    
    (a))(a)
    
    
    (b)
    
    
    (c)Equity Compensation plans approved by security holders
    
    
    1,858,001
    
    
    
    1.92
    
    
    
    1,206,237Equity compensations plans not approved by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    1,858,001
    
    
    
    1.92
    
    
    
    1,206,237
 100




---



##### Table of Contents



Stock Ownership of Certain Beneficial Owners and Management
  Number of
    
    
    PercentageName and Address(1)
    
    Shares
    
    
    OwnedDouglas C. MacLellan
    
    
    446,000(2)
    
    
    
    1.5
    %Akio Ariura
    
    
    140,000(3)
    
    
    
    *William M. Thompson III, M.D.
    
    
    220,000(4)
    
    
    
    *408 Town Square LaneHuntington Beach, CA 92648Edward R. Arquilla, M.D., Ph.D
    
    
    136,494(5)
    
    
    
    *Department of PathologyUniversity of California  IrvineIrvine, CA 92697Minghui Jia
    
    
    1,622,672(6)
    
    
    
    5.5
    %Room 2502 Shun Hing Square5002 Shennan Ave LuoHuShenzhen China 518008Fang Zheng
    
    
    1,622,672(7)
    
    
    
    5.5
    %Room 2502 Shun Hing Square5002 Shennan Ave LuoHuShenzhen China 518008Jade Capital Group
    
    
    972,672(8)
    
    
    
    3.2
    %Room 2502 Shun Hing Square5002 Shennan Ave LuoHuShenzhen China 518008Mike Boswell
    
    
    40,000
    
    
    
    *400 Professional DriveSuite 310Gaithersburg, MD 20879All Directors and Officers as a
group (6 persons)
    
    
    3,255,172(9)
    
    
    
    10.8
    %
 
 (1)
    
    Unless otherwise indicated, address is 2492 Walnut Avenue, Suite 100, Tustin, California, 92780.(2)
    
    Includes, 446,000 shares of common stock issuable upon the exercise of options at $0.75 per share.(3)
    
    Includes 140,000 shares of common stock issuable on exercise of options at $0.75 per share.(4)
    
    Includes, 180,000 shares of common stock issuable upon the exercise of options at $0.75 per share.(5)
    
    Includes, 80,000 shares of common stock issuable upon the exercise of options at $0.75 per share. 101




---



##### Table of Contents



(6)
    
    Includes 972,672 shares held in the name of Jade Capital Group Limited of which Mr. Jia is a
director and principal stockholder and 50,000 shares of common stock issuable upon the exercise
of options at $0.75 per share.(7)
    
    Includes 972,672 shares held in the name of Jade Capital Group Limited of which Mr. Zheng is a
director and principal stockholder, options to purchase 50,000 shares of common stock issuable
upon the exercise of options at $0.75 per share.(8)
    
    Includes 100,000 shares held in escrow held by a third party for the issuance by the SFDA of a
permit or the equivalent regulatory approval for the Company to sell and distribute
ONKO-SUREtm in the PRC. Amendment No. 3 to the Escrow agreement was executed on March 24
2009 extending the required approval date to March 28, 2010. 102




---



##### Table of Contents



Item 13. Certain Relationships and Related Transactions, and Director Independence
  Review, Approval and Ratification of Related Party Transactions
  Promoters and Certain Control Persons
   Director Independence
    
    
    No non-employee director receives any direct compensation from Radient other than under
the director compensation program described in this proxy statement.
    
    No immediate family member (within the meaning of the NYSE Amex listing standards) of any
non-employee director is an employee of Radient or otherwise receives direct compensation
from Radient.
    
    No non-employee director (or any of their respective immediate family members) is
affiliated with or employed in a professional capacity by Radients independent accountants.
    
    No non-employee director is a member, partner, or principal of any law firm, accounting
firm or investment banking firm that receives any consulting, advisory or other fees from
Radient.
    
    No Radient executive officer is on the compensation committee of the board of directors
of a company that employs any of
our non-employee directors (or any of their respective immediate family members) as an
executive officer.
 103




---



##### Table of Contents




    
    No non-employee director (or any of their respective immediate family members) is
indebted to Radient, nor is Radient indebted to any non-employee director (or any of their
respective immediate family members).
    
    No non-employee director serves as an executive officer of a charitable or other
tax-exempt organization that received contributions from Radient.
  
 Item 14. Principal Accountant Fees and Services
  Services Provided
    
    2009
    
    
    2008Audit Fees
    
    $
    297,000
    
    
    $
    430,000Audit Related Fees
    
    
    
    
    
    
    41,000Tax Fees
    
    
    
    
    
    
    All Other Fees
    
    
    
    
    
    
    Total
    
    $
    297,000
    
    
    $
    471,000
 Audit Fees.
 Audit Related Fees.
 Tax Fees.
 All Other Fees.
 Audit Committee Pre-Approval Policies and Procedures
  
 PART IV
 
 Item 15. Exhibits, Financial Statement Schedules
  (1)
    
    The financial statements required to be included in this Annual Report on Form 10-K/A are
included in Item 8 of this Report.(2)
    
    All other schedules have been omitted because they are not required.(3)
    
    Exhibits:
 104




---



##### Table of Contents



ExhibitNumber
    
    Description:3.1
    
    Certificate of Incorporation of Registrant. (Incorporated by reference to the Companys
Report on Form 10-KSB for the year ended December 31, 1989.)3.2
    
    Bylaws of the Company. (Incorporated by reference to the Companys Report on
Form 10-KSB for the year ended December 31, 1991.)3.3
    
    Certificate of Amendment of Certificate of Incorporation. (Incorporated by reference to
the Companys Report on Form 10-QSB for the period ended September 30, 1998.)3.4
    
    Certificate of Amendment of Certificate of Incorporation filed with the Delaware
Secretary of State on September 8, 2006. (Incorporated by reference to the Companys
definitive Proxy Statement dated July 14, 2006.)3.5
    
    Specimen of Common Stock Certificate. (Incorporated by reference to the Companys
Report on Form 10-KSB for the year ended December 31, 1999.)3.6
    
    Certificate of Designations. (Incorporated by reference to the Companys Report on
Form 10-KSB for the year ended December 31, 1999.)9.1
    
    Voting Trust Agreement by and between Jeanne Lai and Gary L. Dreher, as Co-Trustees,
and Chinese Universal Technologies Co., Ltd. (Incorporated by reference to the
Companys Report on Form 8-K dated December 26, 2000.)10.1
    
    Amendments to License Agreement between the Company and AMDL Canada, Inc., dated
September 20, 1989, June 16, 1990 and July 5, 1990. (Incorporated by reference to the
Companys Report on Form 10-KSB for the year ended December 31, 1990.)10.2
    
    The Companys 1992 Stock Option Plan. (Incorporated by reference to the Companys
Report on Form 10-KSB for the year ended December 31, 1991.)10.3
    
    Operating Agreement of ICD, L.L.C. (Incorporated by reference to the Companys Report on
Form 10-KSB for the year ended December 31, 1993.)10.4
    
    Letter Agreement between the Company and BrianaBio-Tech, Inc. and AMDL Canada, Inc.,
dated February 7, 1995 (Incorporated by reference to the Companys Report on
Form 10-KSB for the year ended December 31, 1993.)10.5
    
    The Companys Stock Bonus Plan (Incorporated by reference to the Companys Report on
Form 10-KSB for the year ended December 31, 1995.)10.6
    
    Employment Agreement between the Company and Gary L. Dreher dated January 15, 1998
(Incorporated by reference to the Companys Report on Form 10-KSB for the year ended
December 31, 1997.)10.7
    
    Salary Continuation Agreement between the Company and That T. Ngo, Ph.D., dated May 21,
1998 (Incorporated by reference to the Companys Report on Form 10-QSB for the period
ended June 30, 1998.)10.8
    
    Salary Continuation Agreement between the Company and Thomas V. Tilton dated May 21,
1998 (Incorporated by reference to the Companys Report on Form 10-QSB for the period
ended June 30, 1998.)10.9
    
    Salary Continuation Agreement between the Company and Harry Berk dated May 21, 1998
(Incorporated by reference to the Companys Report on Form 10-QSB for the period ended
June 30, 1998.)10.1
    
    Salary Continuation Agreement between the Company and Gary L. Dreher dated May 21, 1998
(Incorporated by reference to the Companys Report on Form 10-QSB for the period ended
June 30, 1998.)10.11
    
    Agreement between the Company and William M. Thompson, M.D., dated May 21, 1998
(Incorporated by reference to the Companys Report on Form 10-QSB for the period ended
June 30, 1998.)10.12
    
    Amendment No. 1 to Employment Agreement with That T. Ngo, Ph.D., dated July 1, 1998
(Incorporated by reference to the Companys Report on Form 10-QSB for the period ended
June 30, 1998.)10.13
    
    Agreement Relating to Salary deferral between the Company and Thomas V. Tilton dated
July 1, 1998 (Incorporated by reference to the Companys Report on Form 10-QSB for the
period ended June 30, 1998.)
 105




---



##### Table of Contents



ExhibitNumber
    
    Description:10.14
    
    Agreement Relating to Salary deferral between the Company and Harry Berk
dated July 1, 1998 (Incorporated by reference to the Companys Report on
Form 10-QSB for the period ended June 30, 1998.)10.15
    
    Securities Purchase Agreement between the Company and the Purchasers listed
on the Purchaser Signature Pages attached thereto, dated February 17, 1999.
(Incorporated by reference to the Companys Registration Statement on
Form 10-SB dated October 15, 1999.)10.16
    
    The Companys 1999 Stock Option Plan (Incorporated by reference to the
Companys Registration Statement on Form 10-SB dated October 15, 1999.)10.17
    
    Agreement Regarding Cancellation of Indebtedness between the Company and
William M. Thompson, III, M.D., dated July 1, 1999 (Incorporated by reference
to the Companys Registration Statement on Form 10-SB dated October 15,
1999.)10.18
    
    Agreement Regarding Cancellation of Indebtedness between the Company and
Harry Berk dated July 1, 1999 (Incorporated by reference to the Companys
Registration Statement on Form 10-SB dated October 15, 1999.)10.19
    
    Agreement Regarding Cancellation of Indebtedness between the Company and
Edward Arquilla, M.D., dated July 1, 1999 (Incorporated by reference to the
Companys Registration Statement on Form 10-SB dated October 15, 1999.)10.20
    
    Agreement Regarding Cancellation of Indebtedness between the Company and
Thomas V. Tilton dated July 1, 1999 (Incorporated by reference to the
Companys Registration Statement on Form 10-SB dated October 15, 1999.)10.21
    
    Agreement Regarding Cancellation of Indebtedness between the Company and
Donald Rounds, dated July 1, 1999 (Incorporated by reference to the Companys
Registration Statement on Form 10-SB dated October 15, 1999.)10.22
    
    Agreement Regarding Cancellation of Indebtedness between the Company and That
T. Ngo, Ph.D., dated July 1, 1999 (Incorporated by reference to the Companys
Registration Statement on Form 10-SB dated October 15, 1999.)10.23
    
    Agreement Regarding Cancellation of Indebtedness between the Company and Gary
L. Dreher dated July 1, 1999 (Incorporated by reference to the Companys
Registration Statement on Form 10-SB dated October 15, 1999.)10.24
    
    Agreement Regarding Cancellation of Indebtedness between the Company and
Douglas C. MacLellan dated July 1, 1999 (Incorporated by reference to the
Companys Registration Statement on Form 10-SB dated October 15, 1999.)10.25
    
    Employment Agreement of Gary L. Dreher dated November 23, 1999 (Incorporated
by reference to the Companys Report on Form 10-KSB for the year ended
December 31, 1999.)10.26
    
    Consulting Agreement with That T. Ngo dated October 1, 1999 (Incorporated by
reference to the Companys Report on Form 10-KSB for the year ended
December 31, 1999.)10.27
    
    Securities Purchase Agreement between the Company and the Purchasers listed
on the Purchaser Signature Pages attached thereto dated February 9, 2000
(Incorporated by reference to the Companys Report on Form 10-KSB for the
year ended December 31, 1999.)10.28
    
    Securities Purchase Agreement dated as of December 14, 2000 executed
December 19, 2000 (Incorporated by reference to the Companys Report on
Form 8-K dated December 26, 2000.)10.29
    
    Secured Promissory Note dated December 14, 2000, effective December 19, 2000
(Incorporated by reference to the Companys Report on Form 8-K dated
December 26, 2000.)10.30
    
    Security and Pledge Agreement dated as of December 14, 2000, executed
December 19, 2000 (Incorporated by reference to the Companys Report on
Form 8-K dated December 26, 2000.)10.31
    
    Voting Trust Agreement dated as of December 14, 2000, executed December 19,
2000. (Incorporated by reference to the Companys Report on Form 8-K dated
December 26, 2000.)10.32
    
    Exclusive Distribution Agreement dated December 14, 2000, effective
December 19, 2000. (Incorporated by reference to the Companys Report on
Form 8-K dated December 26, 2000.)10.33
    
    Technology Transfer Agreement effective July 30, 2001 between the Company and
Lung-Ji Chang, Ph.D. (Incorporated by reference from the Companys Report on
Form 8-K dated August 31, 2001.)
 106




---



##### Table of Contents



ExhibitNumber
    
    Description:10.34
    
    Executive Management Change in Control Severance Plan. (Incorporated by reference from the Companys Report on
Form 10-KSB for the year ended December 31, 2001.)10.35
    
    The Companys 2002 Stock Option Plan. (Incorporated by reference from the Companys Report on Form 10-KSB for
the year ended December 31, 2002.)10.36
    
    The Companys 2004 Stock Option Plan. (Incorporated by reference from the Companys Report on Form 10-KSB for
the year ended December 31, 2004.)10.37
    
    Employment Agreement of Gary L. Dreher dated January 31, 2005. (Incorporated by reference from the Companys
Form 8-K filed February 1, 2005.)10.38
    
    Letter of Intent with Jade Capital Group Ltd. dated November 21, 2005. (Incorporated by reference from the
Companys Form 8-K filed November 22, 2005.)10.39
    
    Stock Purchase and Sale Agreement between the Company and Jade Capital Group Limited dated May 12, 2006 and
First Amendment to Purchase and Sale Agreement dated June 30, 2006. (Incorporated by reference from the
Companys definitive Proxy Statement dated July 14, 2006.)10.40
    
    2006 Equity Incentive Plan. (Incorporated by reference from the Companys definitive Proxy Statement dated
July 14, 2006.)10.41
    
    Escrow Agreement between the Company and Jade Capital Group Limited (dated as of the closing on September 28,
2006. (Incorporated by reference from the Companys definitive Proxy Statement dated July 14, 2006.)10.42
    
    Opinion of Amaroq Capital, LLC dated May 9, 2006. (Incorporated by reference from the Companys definitive
Proxy Statement dated July 14, 2006.)10.43
    
    Amendment No. 1 to Escrow Agreement dated August 10, 2007. (Incorporated by reference from the Companys
Form 10-K filed March 31, 2008)10.44
    
    Amendment No 2 to Escrow Agreement dated March 11, 2007 (Incorporated by reference from the Form 10-K filed
April 15, 2009).10.45
    
    Employment Agreement of Gary L. Dreher dated March 31, 2008. (Incorporated by reference from the Form 10-K
filed March 31, 2008)10.46
    
    Change in Control Severance Pay Plan. (Incorporated by reference from the Form 10-K filed March 31, 2008)10.47
    
    Product License, Distribution and Manufacturing Agreement with MGI dated March 28, 2008. (Incorporated by
reference from the Companys Form 8-K filed April 2, 2008.)10.48
    
    2008-2009 Performance Incentive Plan (Incorporated from the Companys Form 8-K filed January 9, 2009)10.49
    
    Amendment No. 3 to Escrow Agreement dated March 24, 2008 (Incorporated by reference from the Form 10-K filed
April 15, 2009.)10.50
    
    Note and Warrant Purchase Agreement dated March 22, 2010 (Incorporated by reference from the Form 8-K filed
March 26, 2010.)10.51
    
    Form of Note (Incorporated by reference from the Form 8-K filed March 26, 2010.)10.52
    
    Form of Warrant (Incorporated by reference from the Form 8-K filed March 26, 2010.)10.53
    
    Form of Registration Rights Agreement dated March 22, 2010 (Incorporated by reference from the Form 8-K filed
March 26, 2010.)10.54
    
    Commercial Lease dated August 30, 2008 for the premises at 2492 Walnut Avenue, Suite 100, Tustin,
California 92780 (Incorporated by reference from the Form 10-K/A filed May 3, 2010)10.55
    
    Collaboration Agreement with Mayo Validation Support Services dated December 12, 2008 (Incorporated by reference from the Form 10-K/A filed May 3, 2010)10.56
    
    Exclusive Distribution Agreement between the Company and Grifols USA, LLC dated September 20, 2009 (Incorporated by reference from the Form 10-K/A filed May 3, 2010)10.57
    
    Distribution Agreement between the Company and Tarom Applied Technologies dated September 30, 2009 (Incorporated by reference from the Form 10-K/A filed May 3, 2010)10.58
    
    Form of Note and Warrant Purchase Agreement (Incorporated by reference from the Form 8-K filed April 13, 2010.)
 107




---



##### Table of Contents



ExhibitNumber
    
    Description:10.59
    
    Form of Note (Incorporated by reference from the Form 8-K filed April 13, 2010.)10.60
    
    Form of Warrant (Incorporated by reference from the Form 8-K filed April 13, 2010.)10.61
    
    Form of Addendum to Note and Warrant Purchase Agreement (Incorporated by reference from the
Form 8-K filed April 13, 2010.)10.62
    
    Form of Exchange Agreement (Incorporated by reference from the Form 8-K filed March 16, 2010.)10.63
    
    Form of Waiver of Default dated February 16, 2010 (Incorporated by reference from the Form 8-K
filed March 16, 2010.)21.1
    
    Subsidiaries of AMDL, Inc. include Jade Pharmaceutical Inc., a British Virgin Islands corporation,
Jiangxi Jiezhong Bio-Chemical Pharmacy Company Limited, a China WFOE, Yangbian Yiqiao Bio-Chemical
Pharmacy Company Limited, a China WFOE, and AMDL Diagnostics, Inc, a United States corporation.23.1
    
    Consent of KMJ Corbin & Company LLP. (Filed herewith.)24.1
    
    Power of Attorney. (Included on signature page.)31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(Filed herewith.)31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(Filed herewith.)32.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)32.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)
 108




---



##### Table of Contents



SIGNATURES
  RADIENT PHARMACEUTICALS CORPORATIONBy:
    /s/  Douglas C. MacLellanDouglas C. MacLellanChief Executive Officer POWER OF ATTORNEY
   Signature
    
    Title
    
    Date/s/ DOUGLAS C. MACLELLAN

DOUGLAS C. MACLELLAN
    
    President, Chief Executive Officer, and Director
(Principal Executive Officer)
    
    September 24, 2010/s/ AKIO ARIURA

AKIO ARIURA
    
    Chief Operating Officer, Chief Financial Officer and secretary
(Principal Financial Officer
and Principal Accounting Officer)
    
    September 24, 2010EDWARD R. ARQUILLA
    
    Director
    
    Now Deceased/s/ MICHAEL BOSWELL

MICHAEL BOSWELL
    
    Director
    
    September 24, 2010MINGHUI JIA
    
    Director
    
    September  , 2010/s/ WILLIAM M. THOMPSON III

WILLIAM M. THOMPSON III
    
    Director
    
    September 24, 2010DR. ROBERT BEART
    
    Director
    
    September
, 2010
 109




---



##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description:3.1
    
    Certificate of Incorporation of Registrant. (Incorporated by reference to the Companys
Report on Form 10-KSB for the year ended December 31, 1989.)3.2
    
    Bylaws of the Company. (Incorporated by reference to the Companys Report on
Form 10-KSB for the year ended December 31, 1991.)3.3
    
    Certificate of Amendment of Certificate of Incorporation. (Incorporated by reference to
the Companys Report on Form 10-QSB for the period ended September 30, 1998.)3.4
    
    Certificate of Amendment of Certificate of Incorporation filed with the Delaware
Secretary of State on September 8, 2006. (Incorporated by reference to the Companys
definitive Proxy Statement dated July 14, 2006.)3.5
    
    Specimen of Common Stock Certificate. (Incorporated by reference to the Companys
Report on Form 10-KSB for the year ended December 31, 1999.)3.6
    
    Certificate of Designations. (Incorporated by reference to the Companys Report on
Form 10-KSB for the year ended December 31, 1999.)9.1
    
    Voting Trust Agreement by and between Jeanne Lai and Gary L. Dreher, as Co-Trustees,
and Chinese Universal Technologies Co., Ltd. (Incorporated by reference to the
Companys Report on Form 8-K dated December 26, 2000.)10.1
    
    Amendments to License Agreement between the Company and AMDL Canada, Inc., dated
September 20, 1989, June 16, 1990 and July 5, 1990. (Incorporated by reference to the
Companys Report on Form 10-KSB for the year ended December 31, 1990.)10.2
    
    The Companys 1992 Stock Option Plan. (Incorporated by reference to the Companys
Report on Form 10-KSB for the year ended December 31, 1991.)10.3
    
    Operating Agreement of ICD, L.L.C. (Incorporated by reference to the Companys Report on
Form 10-KSB for the year ended December 31, 1993.)10.4
    
    Letter Agreement between the Company and BrianaBio-Tech, Inc. and AMDL Canada, Inc.,
dated February 7, 1995 (Incorporated by reference to the Companys Report on
Form 10-KSB for the year ended December 31, 1993.)10.5
    
    The Companys Stock Bonus Plan (Incorporated by reference to the Companys Report on
Form 10-KSB for the year ended December 31, 1995.)10.6
    
    Employment Agreement between the Company and Gary L. Dreher dated January 15, 1998
(Incorporated by reference to the Companys Report on Form 10-KSB for the year ended
December 31, 1997.)10.7
    
    Salary Continuation Agreement between the Company and That T. Ngo, Ph.D., dated May 21,
1998 (Incorporated by reference to the Companys Report on Form 10-QSB for the period
ended June 30, 1998.)10.8
    
    Salary Continuation Agreement between the Company and Thomas V. Tilton dated May 21,
1998 (Incorporated by reference to the Companys Report on Form 10-QSB for the period
ended June 30, 1998.)10.9
    
    Salary Continuation Agreement between the Company and Harry Berk dated May 21, 1998
(Incorporated by reference to the Companys Report on Form 10-QSB for the period ended
June 30, 1998.)10.1
    
    Salary Continuation Agreement between the Company and Gary L. Dreher dated May 21, 1998
(Incorporated by reference to the Companys Report on Form 10-QSB for the period ended
June 30, 1998.)10.11
    
    Agreement between the Company and William M. Thompson, M.D., dated May 21, 1998
(Incorporated by reference to the Companys Report on Form 10-QSB for the period ended
June 30, 1998.)10.12
    
    Amendment No. 1 to Employment Agreement with That T. Ngo, Ph.D., dated July 1, 1998
(Incorporated by reference to the Companys Report on Form 10-QSB for the period ended
June 30, 1998.)10.13
    
    Agreement Relating to Salary deferral between the Company and Thomas V. Tilton dated
July 1, 1998 (Incorporated by reference to the Companys Report on Form 10-QSB for the
period ended June 30, 1998.)
 110




---



##### Table of Contents



ExhibitNumber
    
    Description:10.14
    
    Agreement Relating to Salary deferral between the Company and Harry Berk
dated July 1, 1998 (Incorporated by reference to the Companys Report on
Form 10-QSB for the period ended June 30, 1998.)10.15
    
    Securities Purchase Agreement between the Company and the Purchasers listed
on the Purchaser Signature Pages attached thereto, dated February 17, 1999.
(Incorporated by reference to the Companys Registration Statement on
Form 10-SB dated October 15, 1999.)10.16
    
    The Companys 1999 Stock Option Plan (Incorporated by reference to the
Companys Registration Statement on Form 10-SB dated October 15, 1999.)10.17
    
    Agreement Regarding Cancellation of Indebtedness between the Company and
William M. Thompson, III, M.D., dated July 1, 1999 (Incorporated by reference
to the Companys Registration Statement on Form 10-SB dated October 15,
1999.)10.18
    
    Agreement Regarding Cancellation of Indebtedness between the Company and
Harry Berk dated July 1, 1999 (Incorporated by reference to the Companys
Registration Statement on Form 10-SB dated October 15, 1999.)10.19
    
    Agreement Regarding Cancellation of Indebtedness between the Company and
Edward Arquilla, M.D., dated July 1, 1999 (Incorporated by reference to the
Companys Registration Statement on Form 10-SB dated October 15, 1999.)10.20
    
    Agreement Regarding Cancellation of Indebtedness between the Company and
Thomas V. Tilton dated July 1, 1999 (Incorporated by reference to the
Companys Registration Statement on Form 10-SB dated October 15, 1999.)10.21
    
    Agreement Regarding Cancellation of Indebtedness between the Company and
Donald Rounds, dated July 1, 1999 (Incorporated by reference to the Companys
Registration Statement on Form 10-SB dated October 15, 1999.)10.22
    
    Agreement Regarding Cancellation of Indebtedness between the Company and That
T. Ngo, Ph.D., dated July 1, 1999 (Incorporated by reference to the Companys
Registration Statement on Form 10-SB dated October 15, 1999.)10.23
    
    Agreement Regarding Cancellation of Indebtedness between the Company and Gary
L. Dreher dated July 1, 1999 (Incorporated by reference to the Companys
Registration Statement on Form 10-SB dated October 15, 1999.)10.24
    
    Agreement Regarding Cancellation of Indebtedness between the Company and
Douglas C. MacLellan dated July 1, 1999 (Incorporated by reference to the
Companys Registration Statement on Form 10-SB dated October 15, 1999.)10.25
    
    Employment Agreement of Gary L. Dreher dated November 23, 1999 (Incorporated
by reference to the Companys Report on Form 10-KSB for the year ended
December 31, 1999.)10.26
    
    Consulting Agreement with That T. Ngo dated October 1, 1999 (Incorporated by
reference to the Companys Report on Form 10-KSB for the year ended
December 31, 1999.)10.27
    
    Securities Purchase Agreement between the Company and the Purchasers listed
on the Purchaser Signature Pages attached thereto dated February 9, 2000
(Incorporated by reference to the Companys Report on Form 10-KSB for the
year ended December 31, 1999.)10.28
    
    Securities Purchase Agreement dated as of December 14, 2000 executed
December 19, 2000 (Incorporated by reference to the Companys Report on
Form 8-K dated December 26, 2000.)10.29
    
    Secured Promissory Note dated December 14, 2000, effective December 19, 2000
(Incorporated by reference to the Companys Report on Form 8-K dated
December 26, 2000.)10.30
    
    Security and Pledge Agreement dated as of December 14, 2000, executed
December 19, 2000 (Incorporated by reference to the Companys Report on
Form 8-K dated December 26, 2000.)10.31
    
    Voting Trust Agreement dated as of December 14, 2000, executed December 19,
2000. (Incorporated by reference to the Companys Report on Form 8-K dated
December 26, 2000.)10.32
    
    Exclusive Distribution Agreement dated December 14, 2000, effective
December 19, 2000. (Incorporated by reference to the Companys Report on
Form 8-K dated December 26, 2000.)10.33
    
    Technology Transfer Agreement effective July 30, 2001 between the Company and
Lung-Ji Chang, Ph.D. (Incorporated by reference from the Companys Report on
Form 8-K dated August 31, 2001.)
 111




---



##### Table of Contents



ExhibitNumber
    
    Description:10.34
    
    Executive Management Change in Control Severance Plan. (Incorporated by reference from the Companys Report on
Form 10-KSB for the year ended December 31, 2001.)10.35
    
    The Companys 2002 Stock Option Plan. (Incorporated by reference from the Companys Report on Form 10-KSB for
the year ended December 31, 2002.)10.36
    
    The Companys 2004 Stock Option Plan. (Incorporated by reference from the Companys Report on Form 10-KSB for
the year ended December 31, 2004.)10.37
    
    Employment Agreement of Gary L. Dreher dated January 31, 2005. (Incorporated by reference from the Companys
Form 8-K filed February 1, 2005.)10.38
    
    Letter of Intent with Jade Capital Group Ltd. dated November 21, 2005. (Incorporated by reference from the
Companys Form 8-K filed November 22, 2005.)10.39
    
    Stock Purchase and Sale Agreement between the Company and Jade Capital Group Limited dated May 12, 2006 and
First Amendment to Purchase and Sale Agreement dated June 30, 2006. (Incorporated by reference from the
Companys definitive Proxy Statement dated July 14, 2006.)10.40
    
    2006 Equity Incentive Plan. (Incorporated by reference from the Companys definitive Proxy Statement dated
July 14, 2006.)10.41
    
    Escrow Agreement between the Company and Jade Capital Group Limited (dated as of the closing on September 28,
2006. (Incorporated by reference from the Companys definitive Proxy Statement dated July 14, 2006.)10.42
    
    Opinion of Amaroq Capital, LLC dated May 9, 2006. (Incorporated by reference from the Companys definitive
Proxy Statement dated July 14, 2006.)10.43
    
    Amendment No. 1 to Escrow Agreement dated August 10, 2007. (Incorporated by reference from the Companys
Form 10-K filed March 31, 2008)10.44
    
    Amendment No 2 to Escrow Agreement dated March 11, 2007 (Incorporated by reference from the Form 10-K filed
April 15, 2009).10.45
    
    Employment Agreement of Gary L. Dreher dated March 31, 2008. (Incorporated by reference from the Form 10-K
filed March 31, 2008)10.46
    
    Change in Control Severance Pay Plan. (Incorporated by reference from the Form 10-K filed March 31, 2008)10.47
    
    Product License, Distribution and Manufacturing Agreement with MGI dated March 28, 2008. (Incorporated by
reference from the Companys Form 8-K filed April 2, 2008.)10.48
    
    2008-2009 Performance Incentive Plan (Incorporated from the Companys Form 8-K filed January 9, 2009)10.49
    
    Amendment No. 3 to Escrow Agreement dated March 24, 2008 (Incorporated by reference from the Form 10-K filed
April 15, 2009.)10.50
    
    Note and Warrant Purchase Agreement dated March 22, 2010 (Incorporated by reference from the Form 8-K filed
March 26, 2010.)10.51
    
    Form of Note (Incorporated by reference from the Form 8-K filed March 26, 2010.)10.52
    
    Form of Warrant (Incorporated by reference from the Form 8-K filed March 26, 2010.)10.53
    
    Form of Registration Rights Agreement dated March 22, 2010 (Incorporated by reference from the Form 8-K filed
March 26, 2010.)10.54
    
    Commercial Lease dated August 30, 2008 for the premises at 2492 Walnut Avenue, Suite 100, Tustin,
California 92780 (Incorporated by reference from the Form 10-K/A filed May 3, 2010)10.55
    
    Collaboration Agreement with Mayo Validation Support Services dated December 12, 2008 (Incorporated by reference from the Form 10-K/A filed May 3, 2010)10.56
    
    Exclusive Distribution Agreement between the Company and Grifols USA, LLC dated September 20, 2009 (Incorporated by reference from the Form 10-K/A filed May 3, 2010)10.57
    
    Distribution Agreement between the Company and Tarom Applied Technologies dated September 30, 2009 (Incorporated by reference from the Form 10-K/A filed May 3, 2010)10.58
    
    Form of Note and Warrant Purchase Agreement (Incorporated by reference from the Form 8-K filed April 13, 2010.)
 112




---



##### Table of Contents



ExhibitNumber
    
    Description:10.59
    
    Form of Note (Incorporated by reference from the Form 8-K filed April 13, 2010.)10.60
    
    Form of Warrant (Incorporated by reference from the Form 8-K filed April 13, 2010.)10.61
    
    Form of Addendum to Note and Warrant Purchase Agreement (Incorporated by reference from the
Form 8-K filed April 13, 2010.)10.62
    
    Form of Exchange Agreement (Incorporated by reference from the Form 8-K filed March 16, 2010.)10.63
    
    Form of Waiver of Default dated February 16, 2010 (Incorporated by reference from the Form 8-K
filed March 16, 2010.)21.1
    
    Subsidiaries of AMDL, Inc. include Jade Pharmaceutical Inc., a British Virgin Islands corporation,
Jiangxi Jiezhong Bio-Chemical Pharmacy Company Limited, a China WFOE, Yangbian Yiqiao Bio-Chemical
Pharmacy Company Limited, a China WFOE, and AMDL Diagnostics, Inc, a United States corporation.23.1
    
    Consent of KMJ Corbin & Company LLP. (Filed herewith.)24.1
    
    Power of Attorney. (Included on signature page.)31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(Filed herewith.)31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(Filed herewith.)32.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)32.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)
 113