OK, I'll start with the one thing you have right. In a settlement, anything can be agreed upon. In a SEC Administrative Proceeding, O & D bars can be levied based on their own set of standards. However, Rooney's case is being heard in Federal Circuit Court. Here the SEC has to convince a federal judge of their case, instead of an Administrative Law Judge who is an employee of the SEC.

Rooney's case is being held in the Federal Northern District of Illinois Circuit Court. >>>This court and others have identified six factors a court may consider in determining whether an O&D bar is appropriate. Courts give particular weight to two of the six factors: whether the defendant profited from the fraud and whether the defendant was a repeat offender. In every case found...where a court imposed an O&D bar, the defendant profited from the fraud, was a repeat offender, or both.<<<

I'll address just these two at this time.

1st the defendant's repeat offender's status;
As usual, you do not support your statement with any credible information. The SEC did initiate an insider trading action that included Rooney as a defendant in 2000. They also dismissed him and others as defendants at some point before the action was settled in 2005. He didn't even get his wrist slapped then.
http://www.sec.gov/litigation/litreleases/lr19100.htm

2nd the defendant's economic stake in the violation;
>>>Where courts have imposed O&D bars, the defendant has an immediate, direct economic stake in the violation, [thus] no court has found an economic stake, resulting in an O&D bar, where the defendant received a salary from a separate, legitimate company.<<<

If you have any credible information that supports your position, I would most certainly like to see it.
Robert

>>>excerpts<<< from court documents currently before the Northern District of Illinois Circuit Court.

Well, if your plan is to wait for Rooney to get booted, you are probably wasting your time here. The SEC hasn't been doing very well with the courts as of late. I believe that will continue with Rooney's case.

Here is an excerpt from a court document in the same district court that is hearing Rooney's case. They have a direct connection to Officer and Director bars.

>>>The [SEC] Commission typically seeks O&D bars against defendants who violate the securities laws at the company where they are an officer or director. In such instances, the district court reviews the defendant’s conduct, as an officer or director of a publicly traded company, to determine whether he or she is “unfit” to serve in that capacity in the future. We find no cases where a court imposed an O&D bar for conduct occurring outside the defendant’s role as an officer or director.<<<

In addition, the SEC complaint does not allege that Rooney violated the securities laws with any action he took in managing Positron.

There's more, but I'll keep this short.

GLTA
Robert

No, Pat Rooney has NOT been removed from his position of CEO at Positron. Such information is material and both Positron and the SEC would have to release that information in a timely manner. The hearing in December resulted in a continuation of the case, with a new status hearing set for May 14th. Since the case is ongoing, there is no legal basis to have removed Rooney from his post.

This post is based on court documents that do not require "logical speculation", only a simple understanding of the facts.

GLTA
Robert

Keep in mind that F18 has almost the same half life as FDG, around 110 minutes. FDG can be processed in cyclotrons at clinics and hospitals, so the short half life isn't so critical. But due to the new FDA PET drug regulations, which would require Lantheus to include each and every site in their NDA, Lantheus is looking at using those companies that you mentioned to avoid financial and liability issues at the clinics and hospitals. The drawback is that there is that short half life of less than 2 hours (max. shelf life 12 hours), which includes delivery as opposed to that of MO/TC-99 generators (typical shelf life 2 weeks) and SR/RB-82 generators (typical shelf life 28 days).

GLTA
Robert

I'll try to answer your questions:

Despite the delays of others impacting Positron's top line, They did report revenues of $2.423 million dollars for 2012 in their latest 10Q. They also showed cash and equivalents totaling $1.058 million.

I'll be better able to answer that when you can tell me when Bracco will release information and let their customers know when they will have enough generators to be able to utilize the SR-82 that is available.

Good question. But just because it hasn't happened doesn't mean it wont. With Draximage entering the equation, I wouldn't be surprised to see interest from countries that don't have brick and mortar radiopharmacies, being interested in the POSIRX.

Never heard of non-disclosure agreement during contract negotiations? Positron did state that they were working on a definitive agreement with Draximage back in Sept. 2012. So, if Bracco is not buying, then...?

GLTA
Robert

Of course we agree on the fact that Positron has to deliver. That's why most of us became shareholders of Positron. The issue has been one of when. Some feel that it has to be now. I don't. Based on the information that I posted previously, I feel that the delays of others have justified Positron's delays. I wish that the delays had never occurred and that our accounts were all green now. But that is not the case. Based on POSC's Q3 2012 report and using the burn rate for 2012, plus the infusion of cash by Rooney & Conn, I calculated that there are funds to get POSC thru the end of 2013 even without any additional revenues. For that reason I am giving myself at least until the end of 2013 for Positron to deliver. If there is a major change to that calculation, either positive or negative, I will adjust my thinking and timing accordingly.

GLTA
Robert

You must have missed the fact that Positron is a nuclear cardiac PET company. That is where their focus is. Even the POSIRX, previously known as the Pharm Assist was originally designed for FDG pet. The POSIRX was converted to SPECT to generate additional revenue. It was never intended to be the main focus of the company.

RB-82 and SR-82 were always the radiopharma of preference. In-111 was just a stepping stone to get their approvals and licenses. Was it just a coincidence that MIT was acquired just one month after Positron received their pharmacy license?

I think you have heard this before, PET is the future, and Positron is cardiac PET.

Robert

You state that you rarely make deals with people who do not cooperate as predicted. That implies that on occasion you do, and those are times when you probably have no other choice but to remain at the mercy of those people. That's the position that Positron is in.

You also state to “not pass the buck ... or make excuses”, but that is what you are doing. You are trying to place blame on Positron for events that have been caused by Bracco and to some extent Nordion but have had a direct impact on the “timelines” you and others are so concerned about.

For example:
1) Bracco created this whole mess when they did not maintain their timeline for supplying SR-82 for generators. This lapse in deliveries was due to TRIUMPH labs in Canada shutting down for about 4 months from December, 2010 thru April. 2011 for maintenance.

2) Nordion had a MAUDE Adverse Event (#2135148) report filed against their generator for an event that occurred on January 14, 2011. In the report, it is stated by the submitting lab that Nordion “was contacted and was aware of previous leakage issues with this generator.”

3) In February, two patients received PET scans at a clinic in Miami. This led to the July, 26, 2011 recall of the generators. The generator in question was shipped to the clinic on January 7, 2011 from Nordion and was used for scans on the 17th and 21st of February, 2011. The following statements between Bracco and the clinic are from the FDA investigation that took place at the PET clinic, where the scans occurred:

A) “We appreciated your communication during the period of isotope shortage early this year. As discussed previously, we utilized the generator beyond the traditional use period on the recommendation of Bracco, and recognize that this was performed nationally”.

B) “...had stated that during the Rubidium-82 shortage, the generator life was extended to 42
days. ...I was told that the generator life was extended and was safe to use until Feb. 22, 2011”.

C) … the current decay factor sheet provided decay factors for 42 days, from 5/12/2011 to 6/24/2011.”

D) Also in the report it mentions that Bracco reps were not surprised when the clinic personnel
reported that they had not been instructed to use the dose calibrator as was now being shown to them or
that a certain button was supposed to be used while calibrating or setting up the infusion cart.

One should note that all the dates mentioned above were previous to the generator recall of July 26, 2011. One has to wonder how a PET clinic came into possession of decay sheets with a 42 day decay rate and information that reflects that information as much as 5 months before the recall. I'm sure they didn't get it from Positron.

Even after the generators were coming back on the market, events continued to cause disruptions to the Cardiogen PET scan market.

1) An event known as the “strontium bump” resulted in Nordion no longer being able to supply SR-82 to GE Healthcare for generator production. Due to this event another FDA recall involving 54 Nordion generators was issued and is still “ongoing”.

2) Bracco just recently issued another letter to their valued customers stating that there has been another delay due to manufacturing delays in December and January. IMO, this delay could have been caused by disruptions from Super Storm Sandy considering that Medi-Physics (doing business as GE Healthcare) is located in Plainsfield, N.J.which took a direct hit from the storm.

3) Another event that could have had an effect is that TRIUMPH was again shut down for maintenance from Dec.2012 thru April, 2013. Their new schedule March thru Sept. 2013 shows no production of SR-82 scheduled at the present time.

Positron is not responsible for any of the above events. There have been numerous P.R.s that reflect that Positron has continued to move forward despite them. I believe Rooney is using this time to strengthen POSC/MIT. If I didn't believe that, I wouldn't be here.

All information in this post was found on line while doing DD.
Robert

From Positrons web site:

>>>Depository Trust Corporation (DTC) Chill
Posted: Oct 18, 2012   |   category: Blog
Positron has been informed by the Depository Trust Corporation (DTC) that it has placed a trading “chill” on the Company’s stock and we have been advised as to the requirements to remove such a “DTC chill”. The DTC letter stated the imposing of a Deposit Chill as it seeks confirmation of compliance of Securities Act of 1933, ...
Positron is confident that this “chill” resulted from routine processes of the DTC and we will be able to fully address DTC’s requirements and provide them the information required. We are currently addressing this matter and expect to be resolved expeditiously.<<<

AND

>>>... DTC requires any legal opinion to be provided by an experienced securities practitioner who is licensed to practice law in the relevant jurisdiction and is in good standing in any bar where the practitioner has been admitted. Such counsel must be independent and not in-house counsel or an issuer’s officer or director. Additionally, DTC requires that counsel may not have a beneficial ownership interest in the security for which the opinion is being provided. DTC reserves the right to approve counsel upon whose opinion DTC is being asked to rely.<<< http://www.securitieslawyer101.com/dtc-go-public/

AND

>>>Legal Opinions
... DTC evaluates issues for eligibility on a case-by-case basis and may require the Participant seeking to make a security DTC-eligible to provide an opinion from the Issuer’s counsel regarding the security. Such opinions are typically requested to confirm either (1) that the SEC registration requirements for that security have been met, or (2) that the security was exempt from SEC registration under the Securities Act under an acceptable exemption and that the security is not subject to transfer restrictions and is freely transferable. ....

Securities Not Registered Pursuant to the Securities Act
Opinions of counsel with respect to requests to make eligible unregistered securities may be required in connection with the following transactions (among others):
(i) securities (newly issued or in the secondary market or issued in connection with corporate actions) which are issued pursuant to an acceptable exemption from SEC registration under the Securities Act; and
(ii) the exchange of securities subject to transfer restrictions represented by certificates bearing a restrictive legend for certificates not subject to transfer restrictions with no restrictive legend (e.g., in reliance on the ’33 Act Rule 144(b)(1)).<<<
http://opportunistmagazine.com/chilling-with-the-dtc-name/

Hope this helps.
Robert

You may be asking the wrong question. I would ask "why is it that only one brokerage firm does not allow the purchase of stocks that have a DTC chill, while the others continue to allow the buying of the stock?" If it was really a question of protecting investors from fraudulent activity, why would any brokerage house continue to allow the buying of chilled stocks? After all, wouldn't they be liable?

Here is a response from TD Ameritrade addressing that issue.

TD Ameritrade has made the business decision to allow closing transactions only on the symbol ____ as it is currently under a DTC chill.

Our firm restricts trading on these securities (to Closing Transactions Only) because it is possible for purchases placed here to be delivered as a physical certificate which we could not negotiate with the DTC (due to the deposit chill). To keep our services affordable for our clients we do not want to have certificates here that we cannot negotiate via DTC (because we would have to re-register every share that was bought or sold via the transfer agent of the issuer, which would be very costly).

While it may be that other brokerage firms do allow opening transactions on these types of securities, TD Ameritrade has made the conscious decision to not offer that.

Sincerely,


Assistant Team Manager
Apex Trade Resolution, TD Ameritrade
Division of TD Ameritrade, Inc."

So it appears to be a business decision to eliminate potential extra expenses, nothing more.

Robert

What stopped them from getting it from Nordion?

I believe their original intention was to use the Canadian company Nordion. But in 2011, there was a SR-82 shortage, Nordion stopped producing generators in Feb. 2011 and was selling their bulk SR-82 to GE to be used in their generators. Then came the Cardiogen-82 recall, resulting in Nordion/TRIUMPH halting production of SR-82. During this time, the Ruby-Fill generator was approved by Health Canada. Shortly thereafter, Cardiogen generators started coming back to market. Nordion along with a DOE facility began producing SR-82 for the reintroduction of the generators. At some point prior to Sept. 2012, the Strontium Bump appeared in generators using SR-82 from Nordion. Bracco was instructed to stop using Nordion and production of SR-82 at TRIUMPH came to a halt. As of Oct. 2012, the FDA still had a recall in effect on those Nordion generators. In order for JDI to get to market, they had to find a supplier and there was POSC/MIT just waiting to be discovered.

Is there a PET market in Canada?

It's a beginning. Don't forget the Positron's Attrius was approved by Health Canada within months of the Ruby-Fill generator being approved. Canada realizes in several years they will have difficulty maintaining their diagnostic capabilities unless they find alternatives. It looks like they have high hopes for RB-82 generators.

Robert

Even if they only did one procedure at 5 different sites, that would require 5 generators. Perhaps you didn't notice the size of the study. 6,000 patients in 2 years. even if only 2000 of them underwent PET scans, that would be 83 per month over 2 years. Which would be about 16 per month per site. This seems like a very good way to enter the market.

Robert

In my original post, I mentioned the European Medicines Agency had issued waivers and deferrals for the Ruby-Fill generator for the study in Europe. Why wasn't Ruby-fill selling previously in Canada? They had no SR-82 supply.

Robert

JDI is validating SR-82 from POSC/MIT right now. After validation, the generator will be ready for sale in Canada. The clinics will need generators and follow up replacements for their scans. Because the generator is approved already, they may not be just limited for use in the study. I think these clinics will continue to purchase the generators on a regular basis throughout the study and beyond. Why do you think sales to JDI is more than 6 months away?

Robert

I disagree that SR-82 revenue will be a year away. In the USA that is probably true, but not for generators for use in Canada & Europe. Sales could start in early 2013, if not sooner. The generator is approved in Canada, and the EMA has issued waivers and deferrals for the purpose of this study.

In Canada, where Draximage's Ruby-Fill is involved in a non-regulatory PET vs. SPECT study that will last 2 years, involve up to 10 medical centers, and has an enrollment of 6,000 patients.

Estimated Study Completion Date:________June 2014
Estimated Primary Completion Date:________October 2013 (Final data collection date for primary outcome measure)

http://clinicaltrials.gov/
enter NCT01128023 in search box

In Europe, Draximage is involved with another study which is scheduled to conclude by June 2014.

Scope of the application
Active substance(s): Rubidium (82Rb) chloride
Condition(s): Visualization of myocardial perfusion for diagnostic purposes
Pharmaceutical form(s): Radionuclide generator
Route(s) of administration: Intravenous use
Name/corporate name of the PIP applicant: Jubilant DraxImage Inc.

http://www.ema.europa.eu/docs/en_GB/document_library/PIP_decision/WC500125665.pdf

Robert

For discussion sake, first one must learn the difference between a DTC chill and a DTC freeze.

>>>A “chill” is a limitation of certain services available for a security on deposit at The Depository Trust Company (“DTC”). A “freeze,” formally referred to as a “global lock,” is a complete restriction on all DTC services for a particular security on deposit at DTC.<<<

>>>A “chill” is a restriction placed by DTC on one or more of DTC’s services, such as limiting a DTC participant’s ability to make a deposit or withdrawal of the security at DTC. A chill may remain imposed on a security for just a few days or for an extended period of time depending upon the reasons for the chill and whether the issuer or transfer agent corrects the problem. A “freeze” is a discontinuation of all services at DTC.<<<

It appears that the excerpts you posted refer to a "freeze" rather than a chill. And as you pointed out, the DTC imposed a chill on POSC, not a freeze.

Robert

http://www.sec.gov/investor/alerts/dtcfreezes.pdf

It has just occurred to me after much debate about 35% vs 3.5% for calculating past damages, that in order to come to the conclusion that applicable revs for the 14 months would equate to 35% only if Google's revs are included. Had the jury used revs from AOl, Target, etc. and not Google's, I don't know if the amount would have been 20%,25% or some other number but probably less than 35%.

My point is that it appears Google's revs were included in determining the percentage to use which is 35%, but then only applied that number to the other defendants, while applying only 3.5% to Google. It seems to me that the other defendants would file motions to get their share of damages reduced should the award remain as is.

Thanks for checking, we can use an error margin of +- 1%. Should be close enough to accomplish what is being discussed.

Here is a link posted originally in LOL's post 18297. Should give you all the Google numbers you need.

http://static.cdn-seekingalpha.com/uploads/2012/11/3/797776-13519174179701962-schase3367_origin.jpg

So, I think what you're saying is that Googles percentage of damages should have been more than any of the other defendants? Instead of less.

I do not have the revenue numbers available to confirm this, but if somebody else has them, please chime in.

I too have been trying to figure the relevance of 35%. I just read another post that seems to make sense to me. Googles revenue from the date of the verdict to the Sept. 2011 was stated as being 35% of the total revenue dating back the entire 6 years of infringement. So if the $450 million is recommended damages for the entire 6 years, you then only want to use 35% of that total. Therefore, 35% x $450 million = $157.5 million.

Robert

From "The basics of US patent litigation"

>>>"Whatever the outcomes of the trials, most cases include post-trial motions asking the court to reverse the jury decisions because of errors or misconduct at trials, because the jury verdicts are not supported by the weight of the evidence, and because no reasonable jury could decide as the actual juries did. A substantial portion of these motions succeed."<<<

http://www.bannerwitcoff.com/_docs/library/articles/basiclit.pdf

So if there wasn't a mistake, these figures for damages between Google and AOL is implying that AOL's revenue is 50% of Googles?

Similar situation on IHUB at EPGL yesterday (10-16). Again only appeared to be Ameritrade. See posts at EPGL #26425 - #26432.

Just to elaborate on ipotter's comments, the generator manufacturing at Nordion was halted due to a "manufacturing deficiency" involving a part(s) received from a 3rd party vendor. Medi-physics dba GE Healthcare did not seem to have this problem, so it appears that the generator components from Nordion and GE are not identical. Due to this problem, FDA requested Bracco initiate the re-qualifying of all CardioGen components and revalidating the manufacturing process. After Nordion generators are approved, they can be manufactured by Nordion. But, Nordion only uses SR-82 from TRIUMPH and Ithemba in their generators. In order for Nordion to start manufacturing generators, their API grade SR-82 has to be approved for use in them. If their generators are not approved, and their API grade SR-82 is, they can resume selling to GE.

A Product Problem Report, filed with the FDA, that occurred on 1-14-2011 indicated leakage in connectors in the vicinity of the generator shield resulting in a liquid spill.

Robert

Considering that Nordion has not produced a Cardiogen generator since Feb. 2011, (see Nordion quarterlies) who do you think has been producing them over the last 18 months?

Robert

Just want to add more detail about the cGMP inspections.

There are 2 types of cGMP inspections, pre-approval and post-approval. The pre-approval would be performed prior to marketing. The post-approval could be conducted any time during the first year of manufacture at commercial scale.

Since this process is probably identical to the Los Alamos process and a sample(s) will have to be validated by the customer prior to their NDA amendment filing , it is very possible a pre-approval inspection will not need to be conducted prior to POSC/MIT selling of SR-82. However that is up to the FDA.

Robert

You will probably find no better source of information, since that slide show was prepared by the FDA DMF expert. Also from the slide presentation, the receipt of the acknowledgement letter is the first step in the process to sell SR-82. Once POSC/MIT receives their DMF number, they will send a letter of authorization to Bracco to reference their DMF. Bracco will file a supplement to add POSC/MIT as a supplier to their NDA referencing the DMF which will trigger a review of the DMF. This review could and probably will include an inspection of the cGMP facility. If there are issues, POSC/MIT will be notified in order to make corrections. If there are no issues or after issues are corrected, Bracco will be notified, who can then place orders for SR-82.
So your 90 days is probably more accurate about the entire process. The 2-3 weeks is just to assign the number and mark as "Active" which is the end of the process should no one ever reference the DMF in an application or amendment.

just my interpretation,
Robert

Jacker, your comment about Bracco ditching their third supplier, are you referring to generator suppliers or API strontium suppliers? To the best of my knowledge, the 3 generator suppliers I'm aware of are Bracco, GEhealthcare and Nordion. The top 3 suppliers of strontium is Los Alamos, Brookhaven and Nordion. regardless, it seems that Bracco will need someone to fill the void, if what you stated is true.

Robert

I see where he also posted on Dotmed. I don't understand the $35,000 deposit, since my understanding is 30% down.

http://www.dotmed.com/virtual-trade-show/category/Honest-%26-Dishonest-Dealings/Discussions/Forums/Beware-Positron-Corp-PoscOb-Cardiac-Pet/37029

Let me get this straight. Someone is seeking a refund for a piece of equipment, but doesn't specify which product he ordered. He states that Corey Conn informed him that his money is in China. That being the case, it appears that the the piece of machinery is the Attrius which is built in China. The sale price for the Attrius is around $750,000. When an order is placed, a deposit of 30% is required when the contract is signed. That equates to $225,000. Why is he seeking a refund of only $35,000? Just doesn't sound credible to me.

Robert

Definitely not as good as we were expecting, but since the Attrius FDA approval, POSC has improved each year since then.

Year_______________Sales/Revs______________Yearly % G/L
2009_______________$1,446,000
2010_______________$4,623,000_________________ +320%
2011 (thru 9/30)_____ $6,374,000_________________ +38%

Even without the Cardiogen82 generator for most of 2011,Positron was still able to increase revs YOY since 2009.