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T HIRD P OINT R ESEARCH , LLC ADVANCED MEDICAL ISOTOPE CORPORATION – INNOVATION IN CANCER THERAPIES – WATCH FOR FDA NEWS Advanced Medical Isotope Corporation (OTCQB:ADMD) has filed pre- market notification to the FDA for its Yttrium-90 (Y-90) RadioGel™ brachytherapy cancer treatment device, which utilizes a dissolvable (referred to as “resorbable”), biodegradable polymer and yttrium-90 microspheres for containment rather than metal or glass seeds. We believe odds of FDA clearance by mid-2014 are above 80%. We believe the Company is on the verge of a major product introduction into the brachytherapy cancer treatment market. We view the Y-90 RadioGel™ device and the other Y-90 products as compelling hybrids between the legacy low dose rate products that utilize permanent seeds for the treatment of prostate cancer and the high dose rate therapies that are gaining in popularity. There have been very few meaningful treatment developments for prostate cancer in quite some time. We believe the Company’s Y-90 isotope-based cancer therapy using a patented polymer delivery methodology could be one of the most significant advances in the treatment of prostate cancer within the past 10 years. The safety profile of beta-emissions from the Y-90 isotope, for both patient and practitioner, is a significant improvement over currently available products with penetrating x-ray or gamma ray photons, because high-energy beta particles deliver a much higher percent of their radiation energy to the tumors being targeted, as contrasted to nearby healthy organs and tissues. Accordingly, we believe use of Y-90 also may provide superior efficacy, compared to legacy brachytherapy products. The Y-90 RadioGel™ device and the other Y-90 products could begin generating substantial revenues at an attractive margin as early as late 2014. The Company is also involved in the production of other isotopes used in nuclear medicine. Several of these critical isotopes are in short supply as available nuclear reactors are shutdown. This market offers an additional and steady potential revenue stream for the Company. Over the coming weeks we will be watching for two events, news relative to FDA clearance and news relative to fundraising activities. Should we get positive news relative to either event, we would expect the shares to trade considerably higher. Market Data Market Cap (MM) $8.0 Shares Outstanding (MM) 109 Float 40 Dividend Yield n/a 52-Week Range $0.03-$0.24 Financial Summary Sept ’13 Quarterly Rev (MM) $0.115 9-Month Revs to Sept ‘13 $0.140 Cash end of Last Quarter (MM) $0.026 Total Assets (MM) $.522 Long-Term Debt (MM) $9.0 Shareholders’ Equity (MM) ($8.5) Initial Report Rating: STRONG SPECULATIVE BUY OTCQB:ADMD Current Price: $0.07 Price Target: $0.50 – Should FDA Clearance be Granted Odds of FDA Clearance: >80% by mid-2014 Third Point Research, LLC Analyst Certification We, hereby certify (1) that the views expressed in this research company report accurately reflect our personal views about any, or all, of the subject securities or issues reflected in this company report, (2) that we do not own these securities, (3) that we will not trade these securities within three months of production of this report. Please see other important disclosures at the end of this report. January 2014 Please see important disclosures, including analyst certification

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ADVANCED MEDICAL ISOTOPE CORPORATION – INNOVATION IN CANCER THERAPIES – WATCH FOR FDA APPROVAL THIRD POINT RESEARCH, LLC Initial Report Rating: STRONG SPECULATIVE BUY OTCQB:ADMD Current Price: $0.07 Price Target: $0.50 – Should FDA Clearance be Granted Odds of FDA Clearance: >80% by mid-2014 Third Point Research, LLC Analyst Certification

Transcript of AMIC Research Report 01-16-14 Stock Symbol (QB:ADMD)

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T H I R D P O I N T R E S E A R C H , LLC

ADVANCED MEDICAL ISOTOPE

CORPORATION – INNOVATION IN

CANCER THERAPIES – WATCH FOR FDA

NEWS • Advanced Medical Isotope Corporation (OTCQB:ADMD) has filed pre-

market notification to the FDA for its Yttrium-90 (Y-90) RadioGel™ brachytherapy cancer treatment device, which utilizes a dissolvable (referred to as “resorbable”), biodegradable polymer and yttrium-90 microspheres for containment rather than metal or glass seeds. We believe odds of FDA clearance by mid-2014 are above 80%.

• We believe the Company is on the verge of a major product introduction into the brachytherapy cancer treatment market. We view the Y-90 RadioGel™ device and the other Y-90 products as compelling hybrids between the legacy low dose rate products that utilize permanent seeds for the treatment of prostate cancer and the high dose rate therapies that are gaining in popularity.

• There have been very few meaningful treatment developments for prostate cancer in quite some time. We believe the Company’s Y-90 isotope-based cancer therapy using a patented polymer delivery methodology could be one of the most significant advances in the treatment of prostate cancer within the past 10 years.

• The safety profile of beta-emissions from the Y-90 isotope, for both patient and practitioner, is a significant improvement over currently available products with penetrating x-ray or gamma ray photons, because high-energy beta particles deliver a much higher percent of their radiation energy to the tumors being targeted, as contrasted to nearby healthy organs and tissues. Accordingly, we believe use of Y-90 also may provide superior efficacy, compared to legacy brachytherapy products.

• The Y-90 RadioGel™ device and the other Y-90 products could begin generating substantial revenues at an attractive margin as early as late 2014.

• The Company is also involved in the production of other isotopes used in nuclear medicine. Several of these critical isotopes are in short supply as available nuclear reactors are shutdown. This market offers an additional and steady potential revenue stream for the Company.

• Over the coming weeks we will be watching for two events, news relative to FDA clearance and news relative to fundraising activities. Should we get positive news relative to either event, we would expect the shares to trade considerably higher.

Market Data

Market Cap (MM) $8.0 Shares Outstanding (MM) 109 Float 40 Dividend Yield n/a 52-Week Range $0.03-$0.24

Financial Summary

Sept ’13 Quarterly Rev (MM) $0.115

9-Month Revs to Sept ‘13 $0.140 Cash end of Last Quarter (MM) $0.026 Total Assets (MM) $.522 Long-Term Debt (MM) $9.0 Shareholders’ Equity (MM) ($8.5)

 Initial Report Rating: STRONG SPECULATIVE BUY OTCQB:ADMD Current Price: $0.07 Price Target: $0.50 – Should FDA Clearance be Granted Odds of FDA Clearance: >80% by mid-2014

Third Point Research, LLC

Analyst Certification

We, hereby certify (1) that the views expressed in this research company report accurately reflect our personal views about any, or all, of the subject securities or issues reflected in this company report, (2) that we do not own these securities, (3) that we will not trade these securities within three months of production of this report.

Please see other important disclosures at the end of this report.

January 2014

Please see important disclosures, including analyst certification

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ADVANCED MEDICAL ISOTOPE CORP. – INNOVATION IN CANCER THERAPIES

Executive Summary Advanced Medical Isotope Corporation (AMIC) has built a team of renowned radiochemists and other scientists focused on the development, production and distribution of medical isotopes. In addition, the AMIC team has significant expertise in critical operational areas including regulatory, manufacturing, sales and marketing as well as finance. The Company is fully reporting and current with the Securities & Exchange Commission with the common shares traded on the OTCQB market under the symbol “ADMD”.

The Company was founded in 2006 by entrepreneur and former Wall Street financial consultant, James C. Katzaroff, who is today the Chairman of the Board and Chief Executive Officer. Management team members and board members have a considerable ownership position and have invested heavily in the business. The Company has been very successful in partnering with local, state and federal agencies, including being awarded a $1.3 million federal grant for the development of innovative brachytherapy cancer treatments.

The market for medical isotopes is valued at approximately $5 billion worldwide and is expected to grow considerably over the next

few years. Medical isotopes are used for both diagnostic purposes and treatment.

AMIC has exclusively licensed an yttrium-90 (Y-90) polymer composite technology from Battelle Memorial Institute, developed at Pacific Northwest National Laboratory, a leading research institute for government and commercial customers. The license agreement grants AMIC the exclusive right to manufacture and market products using the Y-90 polymer composites for treating a broad range of cancers.

Brachytherapy is a form of radiotherapy where a radiation source is placed inside or adjacent to cancerous tissues. In the case of treatment for prostate cancer, the radioactive isotopes are usually placed in small metal or glass shells called “seeds”. Many of these seeds are then inserted via catheters into the prostate where the radiation is delivered to cancerous tissue. Certain other cancers may be treated in a similar fashion with brachytherapy.

Battelle and the Company have developed a new brachytherapy cancer treatment that combines products well known to the FDA. Y-90 is a well accepted medical isotope. It is currently approved in conjunction with antibodies or polymers for cancer treatment. The RadioGel™ device polymer composite building blocks are synthetic and natural non-toxic materials well known to the FDA for cosmetics and food applications.

The Company regards the selection of yttrium-90 as the isotope for its brachytherapy products as a significant decision during product development. Apart from the introduction of the cesium-131 (Cs-131) isotope, which has a significantly shorter half-life relative to the isotopes used in legacy brachytherapy products, there has been little

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advancement in prostate related brachytherapy over the past few years. While the half-life of Cs-131 was a significant improvement over previously used isotopes at 9.7 days, Y-90’s half-life is only 2.7 days. A shorter half-life is significantly desirable as the patient treated with brachytherapy is radioactive until the energy dissipates. In addition to a shorter half-life, Y-90 delivers a significantly higher average therapeutic energy, which delivers the prescribed dose of radiation much more quickly and which should provide more effective treatment and reduce patient side effects.

Importantly, the Y-90 isotope emits short-range beta radiation, while other brachytherapy isotopes in use emit penetrating x-ray or gamma radiation. Short-range beta particles are easier to shield and yield much lower dose rates outside the patient. These features make beta emitters safer for medical workers, the patient’s family and others who are near the patient.

The patent rights licensed from Battelle include several important features, one of which is for the use of a biodegradable polymer to completely replace the metal or glass casing used in previous generations of brachytherapy seed products. Metal or glass seeds, after dissipating the radioactive energy to kill the cancer cells, are left in the prostate. The biodegradable polymer, which is used in the Company’s patented RadioGel™ device and polymer seed products eventually dissolves and is naturally absorbed by the body.

The Company recently applied for 510(k) marketing clearance from the FDA and is expecting a positive response by mid-2014. Because predicate products are already on the market, we believe the odds of clearance are very high. The U.S. market for prostate-related brachytherapy products is approximately $300 million, with the worldwide market valued at approximately $600 million. The breast and liver cancer markets combined are similar in size to the prostate market, so addition of these two cancer types would double the potential market size. According to Bio-Tech Systems, the U.S. brachytherapy market is projected to reach $2.0 billion by 2016.

Newer therapies, which deliver higher dosage rates of radiation over a shorter period of time, are now coming online. These are potentially more effective than are the traditional low dose, slow delivery brachytherapy products. The Company’s Y-90 products could potentially offer many of the same benefits of these newer high dose therapies, but with a lower risk of side effects such as impotence and incontinence when treating prostate cancer. Additionally, the RadioGel™ device will likely be a much more cost effective solution, which could allow the Company to realize superior gross margins.

For its longer-term pipeline, the Company also is active in the development of other medical isotopes and isotope technologies.

As nuclear reactors age and are taken off-line for maintenance or decommissioned, many medical isotopes are in short supply, or soon will be. Though particle accelerators can produce isotopes primarily for diagnostic applications, these isotopes are not preferred for most treatments.

The Company has installed a linear particle accelerator near its Washington State headquarters. The equipment is capable of producing a wide array of medical isotopes and the Company has already met some success in securing markets for the isotopes this equipment produces. The Company’s accelerator technology is not proprietary. Hence, we don't believe this business operation is of particular interest to most growth-oriented investors. However, the accelerator is useful for the Company’s research activities and the margin generated can provide funding for the Company’s overhead and other costs, thereby assisting the Company to launch proprietary products that offer higher margins and superior revenue growth profiles, without additional dilution from financings.

The Company also has a small distribution capability by which it sells medical isotopes and

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related equipment for third parties. This capability requires little capital and offers an immediate contribution to the bottom line. The Company has indicated in recent securities filings and a December 2, 2013 press release that it intends to expand this activity.

Current market capitalization is approximately $8 million. While the Company will need to raise funds in order to complete product development and begin marketing of the Y-90-based brachytherapy products, we believe the investment funds may be readily available as some institutional investors are likely to understand the upside potential of a product that could to be a significant improvement over the 20+ year old technologies that are still being widely used today.

The Company also has identified at least one acquisition target, subject to financing. If consummated, this transaction should accelerate the Company’s reaching positive cash flow. Throughout 2014, we expect the Company to place nearly all management emphasis and all monetary resources on the completion of development of the Y-90 products and to the setting up of initial marketing and licensing relationships in order to bring the products to market pending a positive outcome from the FDA.

During 2014, we also expect the Company to expand its distribution capabilities, which requires little capital and is immediately cash positive.

With the possible exception of a potential partnership in Southern California with a major medical center, we also expect the Company to deemphasize its other activities through at least 2015, as it focuses on the materially lower-capital, more rapid returns available from its Y-90 products and then to pursue a growth strategy that includes isotope linear accelerator-based production and other nuclear isotopes and related technologies.

We expect trading of the shares to be event driven over the coming weeks leading up to the FDA clearance decision.

Should FDA clearance be granted, we see a relatively short period to revenue production, as we believe several

companies currently involved in the prostate-related brachytherapy business would be potential near-term partners.

Over the coming weeks we will be watching for two events, news relative to FDA clearance and news relative to fundraising activities. Should we get positive news relative to either event, we would expect the shares to trade considerably higher.

There have been very few meaningful treatment developments relative to prostate cancer in quite some time.

We believe the Company’s Y-90 isotope-based cancer therapy, combined with the patented biodegradable polymer delivery methodology to be one of the most significant advancements in the treatment of prostate cancer within the past 10 years.

Considering the technology is intended to treat a broad range of tumor-based cancers, we believe FDA clearance should be a very significant event for both the Company and its investors.

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Advanced Medical Isotope Corporation - An Investment Perspective

Introduction Will Advanced Medical Isotope Corporation Revolutionize Brachytherapy for the Treatment of Prostate and Other Cancers?

Advanced Medical Isotope Corporation, headquartered in Kennewick, Washington, USA, which trades under the symbol “ADMD” began its life as a public corporation in September 2006. In early 2007, it acquired the assets of the life sciences business segment of Isotonics Corporation. Utilizing a $1,250,000 grant received in late 2010 and an additional grant of $245,000 received during early 2011, the Company is actively pursuing the development of an advanced resorbable (dissolvable) seed brachytherapy for the controlled delivery of yttrium-90 into cancerous tissues.

Within this report we refer to the Company as either “Advanced Medical Isotope,” “the Company,” or “AMIC.”

To date, the Company has largely been in the development phase, with $15 million expended on research and development. Its revenue-generating activities have been limited to a small linear accelerator in Kennewick, Washington, the distribution of medical isotopes for third parties, and consulting.

The expected FDA clearance for the Company’s Y-90 RadioGel™ device will be the catalyst for the Company’s transition to full operations.

Therefore, the emphasis of this report will be on the vast opportunity that is potentially in front of this Company relative to the introduction of a new generation of brachytherapy cancer treatments. In particular, because we believe the prostate cancer related market is the largest near-term opportunity and where the Company could quickly take market share, the majority of this report will concentrate on the products the Company will likely be able to market for the treatment of prostate cancer. However, we believe there is significant potential for the RadioGel™ device for many tumor cancer types.

For its longer-term pipeline, the Company also is developing other medical isotopes and technologies.

An Investor’s Understanding of Medical Isotopes Medical isotopes are radioactive substances that are injected or placed into the body so that diagnostic images can be taken or so that certain diseases can be treated. The use of medical isotopes for diagnostics and treatment is part of the field of nuclear medicine. Typically, the physicians who perform nuclear

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medicine related procedures for cancer treatment and diagnosis are called radiation oncologists.

The market for medical isotopes is substantial and, according to Transparency Market Research, is valued at approximately $5 billion worldwide as of 2012, with an expected growth to approximately $12.2 billion worldwide by 2018. This equals an approximate annual compound growth rate of 18%. North America is by far the largest market for medical isotopes, but the expected compound annual growth rate is likely to be higher in Europe.

For diagnostics, when appropriate isotopes are injected into, or placed within the body, the isotopes give off energy that can be detected by imaging equipment that indicates the location of the isotope. The physician can then evaluate the displayed images to diagnose the patient's health and certain diseases.

Technetium-99m, which is used as a radioactive tracer, is the most commonly used isotope, involving more than 80% of nuclear medicine procedures. The radiation emitted by Tc-99m can be detected in the body using cameras that show the uptake of Tc-99m radiopharmaceuticals in the heart, brain, thyroid, liver, lung, gallbladder, and skeleton. As is shown in Exhibit One, the most widely used procedure involving Tc-99m is a myocardial perfusion scan, which evaluates heart function and blood flow.

Exhibit One – Primary Uses of Tc-99m in Nuclear Medicine

Source: Nuclear Medicine Report

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Medical isotopes for diagnostic nuclear medicine procedures typically emit gamma rays, which are one of the three types of radioactive energy. The other two types of radioactive energy are alpha and beta radiation. As is shown in Exhibit Two, gamma rays pass directly through the body, allowing these to be easily detectable by medical diagnostic devices.

Exhibit Two – Alpha, Beta and Gamma Energy Penetration

Source: US Nuclear Regulatory Agency

In addition to use in diagnostics, other higher-energy isotopes can also be used to treat cancers. Cancer cells may be more sensitive to radiation than normal or healthy cells. If delivered specifically to cancer cells, the radiation energy can be highly effective against cancer while sparing healthy tissues.

The use of isotopes for the treatment of cancer is usually divided into two categories: (1) unsealed source radiotherapy, which relates to the radioactive substance being administered into the body by either injection or ingestion, or (2) brachytherapy treatments where the radioactive isotope is placed in a sealed source and then placed either inside of, or adjacent to the cancerous area.

Advanced Medical Isotope Corporation is targeting the brachytherapy market. Therefore we will focus our analysis toward this opportunity.

What is Brachytherapy? Brachytherapy is a radiation-based treatment for cancer. The method uses contained radioactive materials that are placed adjacent to, or within, the cancerous tumor. Most often, this therapy is used for gynecological, prostate, breast, skin and liver cancers, although it also used to treat certain types of tumors on other parts of the body. Physicians started using this therapy on patients during the mid-1960s, but the therapy experienced only limited

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acceptance due to radiation exposure issues. Since that time, due to advances in medical isotopes, radiation shielding, and imaging that permits more precise implantation, use of brachytherapy has soared and today it is a common therapy for many cancers, particularly prostate cancer.

Brachytherapy can be divided into two main segments: permanent (low dose rate) or temporary (high dose rate). Permanent brachytherapy involves the implantation of one or more devices, often called “seeds” into the target area. The actual number of seeds used depends on several factors, such as the type, size and location of the cancer. For example, 30 to 120 seeds may be used to treat prostate cancer. The seeds give off radiation over a period of time in order to kill the cancerous cells.

The use of implanted seeds is often referred to as low dose rate (LDR) brachytherapy because these seeds are implanted within or next to the cancerous tissues where relatively low level doses of radiation are absorbed over an extended period of time. After the therapeutic dose is delivered, the seed remains in the body because there would be no safe or effective method of removal. One risk of this type of treatment is the seeds sometimes migrate to other parts of the body or can sometimes be expelled in semen or urine.

Please see Exhibit Three for a depiction of brachytherapy seeds.

Exhibit Three - Brachytherapy Seeds

Source: Allen Wilson, Inc.

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Temporary brachytherapy involves short-term placement of a device into the affected area whereas radiation is delivered via the device over a predetermined period of time, which is often five to ten minutes. After the treatment is completed, the device is removed from the patient. Such treatments usually yield a considerable radiation dose to the affected area during the limited treatment timeframe, thus these temporary brachytherapy procedures are referred to as high dose rate (HDR) therapies.

Brachytherapy for the Treatment of Prostate Cancer The market for prostate cancer related products comprises approximately 50% of the US brachytherapy market, with liver and breast cancer comprising almost equally the next two biggest indications. As we outlined above, we believe AMIC has an exceptional opportunity to enter the brachytherapy market relative to the treatment of prostate cancer. Therefore, an explanation of brachytherapy relative to the treatment of prostate cancer is warranted.

Over the past 20 years, the use of brachytherapy for the treatment of prostate cancer has increased significantly. The use of brachytherapy seeds, indicated in Exhibit Four, clearly offers a much more acceptable risk profile relative to impotence and incontinence as compared to other prostate cancer treatments. IMRT (Intensely Modulated Radiation Therapy) uses computer generated 3D images and dose calculations to deliver precise radiation doses to tumors. Cryotherapy involves the freezing of tumors. Low dose rate brachytherapy is almost always an outpatient procedure that involves very little recovery time. For these reasons, LDR brachytherapy seeds have become a popular treatment selection for many prostate cancer patients.

Exhibit Four – Prostate Cancer Alternatives and Risks

Source: Mayo Clinic

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Sizing the Market Opportunity for Prostate Cancer Related Brachytherapy Several reliable sources estimate the size of the U.S. prostate cancer brachytherapy market to be in excess of $300 million per year.

In the near-term, we do not see significant growth within the U.S. market for prostate cancer brachytherapy due to the increasing popularity of alternative treatments, such as intensity modulated radiation therapy, and several new surgical techniques. This could change over the coming years as the bubble of baby boomers reach prime prostate cancer age and an increasing number of procedures are required. We believe it is likely that the Asian and European markets will see near-term growth for prostate cancer as these techniques become more popular in these areas.

By contrast, we believe there is likely to be significant worldwide growth for brachytherapy treatments relative to other indications, such as lung, brain and gynecological-related cancers.

The traditional iodine-125 (I-125) and palladium-103 (Pd-103) technologies for brachytherapy are well entrenched with powerful market players controlling the market. The industry-standard I-125-based therapy was developed by Oncura, which is a unit of General Electric Company (NYSE:GE), but the product is currently marketed by Theragenics Corporations (TGX). Additionally, C.R. Bard, a major industry player competes in the I-125 brachytherapy marketplace. These market competitors are also involved in the distribution of Pd-103 based products, which are clearly the market share leader.

While it appears that Cs-131 therapies are beginning to take some market share away from the legacy therapies, we do not view the market share erosion as being significant, based on IsoRay, Inc.’s (NYSE:ISR) recent sales figures. We simply do not believe that Cs-131 based therapies offer significant enough benefits to stem the tide away from some of the newer technologies that are increasing in popularity. There is also some evidence that these newer technologies yield more revenue for physicians and that this is an additional market driver toward HDR.

Brachytherapy for the Treatment of Liver and Breast Cancer Other important brachytherapy market segments AMIC is expecting to participate in include liver cancers and partial breast irradiation. Total U.S. sales for breast brachytherapy is expected to increase to $359 million by 2016.

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Further, U.S. sales of irradiated microspheres for liver cancer are expected to increase to $237 million by 2016.

Which is Better for the Treatment of Prostate Cancer – Low Dose Rate (LDR) or High Dose Rate (HDR) Brachytherapy The discussion in this section focuses on the isotopes and modalities currently in use, rather than the Company’s Y-90 brachytherapy products.

Relative to midterm and long-term efficacy and survival rates, there is very little data to indicate that one method currently on the market is better than the other. Most physicians recommend LDR for localized (cancer only within the prostate) prostate cancer cases in younger men. More complex cases where the cancer has progressed or has spread to other areas, such as a seminal vesicle, are usually treated with HDR, but this is not always the case. Advanced stage cancers usually are treated with HDR and other external radiation source technologies such as external beam radiation therapy (EBRT), or several of the newer external source radiation therapies.

The decision of the use of one procedure over the other is often based on factors such as age, basic general health, the aggressiveness of the cancer, and the additional very important factor of the patient's treatment preference. LDR is typically an outpatient procedure that is often accomplished within one hour. LDR is typically performed under local anesthetic and the patient usually leaves the treatment facility under his own power and resumes normal activities that day or the day after. Younger patients with very early-stage prostate cancer often realize excellent results with of the LDR treatment, so there is often no added benefit to pursuing other therapies.

Because each of the individual seeds have relatively low amounts of radiation, it is critical that the oncologist ensure that seeds are placed in all sectors of the prostate that require treatment. While advancements in devices, techniques, and imaging have mitigated this placement issue somewhat, it still remains a concern relative to LDR treatment.

One drawback for LDR is that using current devices, the patient’s implants remain radioactive for between 15 to 60 days, depending on the isotope used. While the radiation levels drop off quickly, patients are advised to avoid exposure to children and spouses.

Radiation doses from sealed metal seeds also represent a radiation hazard during the entire personnel chain of those involved in production, distribution, and implementation of the radioactive seeds. The shell of the seed is typically made of metal or glass, as these materials are well tolerated by the body. The seeds can be breached, and therefore careful handling procedures must be

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employed to prevent leakage of the radioactive isotope. All three of the major isotopes presently used in prostate-related brachytherapy emit penetrating x-ray or gamma photons. To block this radiation prior to use requires lead lined containers and other radiation safety precautions. Additionally, implanted seeds can sometimes migrate throughout the body, which can lead to radiation doses to normal tissues such as the lungs or bladder.

Physicians are generally more comfortable with LDR as the therapy because it has been used for many years and many oncologists have acquired considerable skill in the techniques. Please see Exhibit Five for a depiction of brachytherapy seeds within the prostate.

Exhibit Five – Radiograph Showing Implanted Brachytherapy Seeds

Source: yester.ispub.com

While LDR procedures significantly outnumber HDR procedures, acceptance of HDR among oncologists is increasing. A growing body of evidence suggests that cancer cells in the prostate are more effectively treated when higher energy levels are applied over a shorter period of time, thus increasing the efficacy of HDR over LDR. In addition, HDR can provide a more uniform dose distribution to target tissues, helping to ensure that that all areas of the prostate that require treatment are treated adequately. Further, since the device is only inserted temporarily, the patient is not left with metal seeds in the prostate.

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Physicians acknowledge some disadvantages with HDR. For example, cancer treatment may require hospitalization for a day or two, and because the patient typically receives multiple treatments during the same day, the patient may be confined with tubes inserted into the prostate between treatments. Many men find this uncomfortable and intimidating. The insertion of a catheter is also required. Additionally, urinary, bowel or erection problems may be more frequent following HRD.

For these reasons, while overall usage is on the rise, HRD still has drawbacks that are mitigated by the use of the more traditional mainstream low dose rate techniques involving the use of permanent seeds.

Types of Low Dose Rate (LDR) Brachytherapy - It's About the Isotope The discussion in this section focuses on the isotopes and modalities currently in use, rather than the Company’s Y-90 brachytherapy products. The discussion then compares the existing isotopes and modalities to the Company’s products. Exhibit Six shows the most common isotopes used in brachytherapy.

Relative to isotopes used for low dose radiation seed implantation, there are three very important factors to consider relative to both the safety of the device and the efficacy:

• Half Life of the Isotope - Relative to the half-life of the radioactive element within the seed, a shorter half-life is desirable. For example, in Exhibit Six below, we notice that I-125 isotopes have a half-life of sixty days. This means that after implantation, sixty days must elapse before half of the radioactive energy dissipates from the seed. As indicated above, this is problematic as the patient is radioactive for an extended period of time. The use of I-125 isotopes has decreased with preference for isotopes with shorter half-lives. For example, Pd-103 has a half-life of only seventeen days. Recently, the use of Cs-131, which has a half-life of 9.7 days, has increased. By contrast, the Company’s isotope of choice, Y-90, has a half-life of 2.7 days.

The issue of the half-life of the isotope is simply not an issue of safety of those around the patient, it is also the issue of safety of the surrounding tissues. It is highly desirable to limit the amount of radiation and the time of exposure to surrounding healthy tissues.

• Dose Rate – Isotopes with higher dose rates have biological effectiveness for killing cancer cells (up to a certain dose). The average rate delivered from the three principal isotopes now in use is still relatively low, requiring longer times to deliver a prescribed dose

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(Exhibit Six). The Company’s Y-90 device is expected to offer a higher dose rate which will offer a shorter treatment duration and a higher theoretical effectiveness in killing cancer cells.

• Total Absorbed Dose - Cesium-131 delivers 90% of the prescribed dose to the prostate gland in 33 days compared to 58 days for Pd-103 and 204 days for I-125. As discussed above, growing evidence suggests that a higher absorbed dose to cancer cells over a shorter period of time is more effective for treatment. AMIC’s Y-90 device will provide 90% of the prescribed dose in approximately 10 days.

Exhibit Six – Medical Isotopes Used for Low Dose Rate (LDR) Prostate-Related Brachytherapy

Isotope

Half-Life in

Days

Energy

Total Dose

90% of Dose

Absorbed

Delivery

Form

Device Left in

Body

Y-90 2.7 2.3

MeV 80-300

Gy 10 days Biodegradable

Polymer No

Cs-131 9.7 30.4 KeV

115 Gy 33 days

Metal Seeds Yes

Pd-103 17 20.8 KeV

125 Gy 58 days

Metal Seeds Yes

I-125 60 28.5 KeV

145 Gy 204 days

Metal Seeds Yes

Source: Vendor supplied data assembled by Third Point Research, LLC

Has Cs-131 Revolutionized LDR? We believe that Cs-131 represents an important advance in LDR brachytherapy, but we do not believe the technology has revolutionized treatment. Certainly the significantly shorter half-life is an advantage over other penetrating photon emitters for prostate-related LDR therapies, but many of the other disadvantages of LDR still persist. Dose rates are low relative to HCR. While a 43% reduction in the half-life is an improvement, the patient still maintains radioactivity for more than a month. Additionally, issues inherent to LDR, such as migration of seeds to other parts of the body, difficulties in achieving dose homogeneity, anatomical changes of the prostate, and the low biological effectiveness relative to high dose rate treatments persist and are not meaningfully, if at all, improved through the use of Cs-131 isotope.

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Advanced Medical Isotope Corporation’s Y-90-based Brachytherapy Products The use of yttrium 90 (Y-90) for treatment of cancers is well established. Therapy using Y-90 microspheres, which are small beads approximately the width of five red blood cells, have proven very effective in several large multi-institutional studies for treating liver tumors.

Although yttrium-90 products are approved to treat cancer and the polymer used in the Company’s Y-90 RadioGel™ device is non-toxic and well known to the FDA, the two components were not previously combined as a brachytherapy treatment. That is what Battelle and the Company have done on a patented, proprietary basis.

The Company has exclusively licensed Y-90 polymer composite technology from Battelle Memorial Institute, which is a highly regarded organization that conducts scientific and technology research and development and designs products on behalf of government and commercial customers. The license agreement grants AMIC the exclusive right to manufacture and market Y-90 polymer composites for use in a broad range of cancers. The Company plans to bring this technology to market, first in its Y-90 RadioGel™ device.

AMIC plans to introduce a new Y-90-based product line to the market that optimizes controlled delivery of Y-90 for a wide range of applications for the treatment of prostate, breast, pancreatic, liver and other cancers. The Company plans initially to introduce three products based on the technologies licensed from Battelle:

• Y-90 RadioGel™ device combines Y-90 microspheres with a polymer carrier that may be injected directly into the tumor. The Y-90 RadioGel™ device enables delivery of higher radiation doses to tumors than can be achieved with traditional seeds and with greater sparing of nearby normal tissues.

• Y-90 Fast-Resorbable Polymer Seeds – Y-90 contained within a polymer seed, as opposed to metal or glass. This product would be used in place of treating cancers with titanium seeds that contain currently marketed isotopes. This product is expected to offer several significant benefits and eliminate or mitigate several side-effects that make the traditional therapies less than optimal. Additionally, this product could prove to be significantly less costly to manufacture and distribute compared to legacy brachytherapy technologies.

• Y-90 Polymer Topical Paste - This product may be applied directly

to tissue surfaces after surgical tumor removals (also referred to as

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“resection”) to treat minimum residual disease--residual tumor cells. We believe this product could end up being a huge winner for the Company.

FDA Application Filed for AMIC’s RadioGel™ Device The Company, on November 3, 2013, announced it had applied for 510(k) clearance with the FDA to begin marketing the Y-90 RadioGel™ device. The FDA has until February 2014 to clear the device, which would allow the Company to begin marketing, or to notify the Company that the FDA requires additional information. It is typical that the FDA would ask for some clarifications and so it is more likely that clearance would be received in mid-2014 than in February 2014. We consider it very positive news that the FDA has confirmed it would review the product as a medical device and not as a drug. This path to clearance for devices with approved, substantially equivalent devices in the market is relatively quick and inexpensive, as compared to the regulatory approval for drugs.

In order to receive 510(k) clearance the Company must demonstrate, to the FDA's satisfaction, that its product is “substantially equivalent” to other products that have previously been cleared. In our opinion, there are several predicate devices currently on the market to which the Company could appropriately compare its RadioGel™ device. Because of this, we believe the odds of clearance by the end of Q2 2014, or shortly thereafter, are high.

AMIC has announced that it plans to file applications for 510(k) clearance for the Y-90 polymer seeds and the Y-90 polymer topical paste, soon after it receives either clearance for the RadioGel™ device or FDA comments.

AMIC also has announced that after it receives FDA clearance it will seek foreign licensees and partners to begin the process of obtaining analogous foreign regulatory approvals, including the important CE certification for clearance in the European Economic Area. The EEA consists of the European Union, as well as Iceland, Liechtenstein and Norway.

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Advantages of AMIC’s Y-90 RadioGel™ Device In earlier sections of this report we point out the many issues with current Low Dose Rate (LDR) brachytherapy therapies. Relative to these product inadequacies, we believe the Y-90 RadioGel™ device and AMIC’s other Y-90 brachytherapy products could offer some significant improvements.

For example:

Maximizing Therapeutic Index - The short-range beta particles emitted by Y-90 deliver radiation energy within a tight range in tissue. This feature enables radiation to be more selectively delivered to target tissues while minimizing radiation dose to nearby normal tissues. High therapeutic indices imply that more radiation energy may be imparted to cancer tissues, with less radiation reaching adjacent normal tissues. This feature enhances both efficacy and safety. Isotopes currently used in brachytherapy with penetrating x-ray or gamma photons deliver higher doses to nearby normal tissues and the patient becomes a source of radiation exposure to medical workers, family members and other people. It is important to note that with Y-90, the beta energy is confined to the target region.

Half Life - The industry-standard Pd-103-based products have a half-life of 17 days, meaning the patient is radioactive for over two months. As is demonstrated in Exhibit Six, the introduction of Cs-131 products reduced the half-life versus Pd-103 products by 43%. The Y-90 based product for which AMIC has recently applied for 510(k) clearance, has a half-life that is 84% shorter than that of Pd-103. While a patient treated with Pd-103 would still be radioactive 60 days after treatment, a patient treated with Y-90 would be close to radiation free in 10 days.

“Biological Effective Dosage” Profile - The evidence is mounting that therapies with higher average energy levels are more effective against prostate related cancers. Yttrium-90-based products hold the promise to deliver significantly higher average therapeutic energy yielding the prescribed dose in a very short period of time.

Better Delivery Method - The placement of permanent metal seeds in the prostate employs up to 30 large needles. By contrast, AMIC’s biodegradable polymer carrying Y-90 microspheres may be administered with small-gauge needles.

No Permanent Seeds Remaining - The Company’s Y-90 RadioGel™ device utilizes a biodegradable, non-toxic polymer that is ultimately absorbed by the body, leaving nothing in the prostate once the radiation dissipates. This eliminates the possibility of a long-term seed migration or other problems that

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may sometimes arise when seeds remain in the body.

Exhibit Seven - Post Treatment with “Seeds” on (Upper) Versus Without Seeds (Lower)

Source: GSO Images

Significantly Improved Safety Profile - Because Y-90 is a beta-emitter compared to commonly used x-ray or gamma ray penetrating photon emitters, Y-90-based products would be significantly safer to use for both the patient and for the personnel involved with the manufacturer, distribution and administration of the product. It is expected that the use of Y-90 for the treatment of prostate cancer would be safer for the patient because the radioactivity would stay within the prostate. Additionally, manufacturing distribution and medical staffs would be able to utilize much less stringent handling procedures compared to those required for x-ray emitter-based products. For example, the other three main isotopes used for the treatment of prostate cancer must typically be stored in lead lined containers due to the x-ray emissions. Y-90-based products can be stored in simple plastic containers or other lightly structured enclosures.

In addition to the above, the microspheres and polymers can hold the Y-90 isotope in place, avoiding the migration of radioactive seeds throughout the patient’s body, as occasionally occurs with the existing metal and glass seeds.

Potential Lower Cost – Yttrium-90 supplies are readily accessible and are relatively inexpensive. Further, the elimination of the metal or glass enclosures greatly reduces manufacturing costs. Upon FDA clearance, AMIC would likely be able to produce a Y-90-based product that should significantly undercut the competition relative to price. The Company claims up to a potential 75% cost savings to manufacture the product as compared to metal or glass seeds. AMIC would likely pass a significant portion of this savings onto the marketplace in order to encourage adoption, while retaining a portion of the advantage to achieve a favorable gross margin. However, if adoption does occur, the Company could eventually raise prices in order to produce very strong gross margins.

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Therapeutic Benefits that are Similar to HDR Treatments - As we indicated above, it appears to us that low dose rate treatment utilizing metal or glass seed for the treatment of prostate cancer is experiencing reduced popularity as physicians look toward more advanced treatments. The new Y-90-based options that AMIC will likely soon be bringing to the market offer many of the advantages of the high dose rate treatments that seem to be gaining in popularity. We believe as the Company begins marketing efforts, the advantages of this new product relative to legacy low dose rate treatments will drive market adoption.

Implementation Scenarios for AMIC’s Yttrium-90 Based Products We see several possible implementation scenarios relative to the RadioGel™ device and AMIC’s other Y-90 brachytherapy products, assuming that they achieve FDA clearance, which we believe is highly likely, particularly for the Y-90 RadioGel™ device for which AMIC has already filed its 510(k) application:

Scenario One - Implementation in line with that achieved thus far by the new Cs-131 product manufactured by IsoRay, Inc.

The current marketer of Cs-131 products, IsoRay, Inc. (NYSE) produced approximately $850,000 in prostate related Cs-131 product sales last quarter. A similar sales rate of Y-90 product would put AMIC at approximately a $3.4 million run rate per year. We would view the development of such a scenario as a disappointment, as we believe much higher penetration rates are possible due to the significant features and benefits of the Y-90 product line versus the competition.

Scenario Two - Implementation in line with that of Cs-131, with a 10% market share gain.

A lukewarm reception by the market, which represented the Company acquiring a 10% market share, would produce approximately $15 million per year in revenues for sales from within the United States. Sales in Europe and Asia could easily produce an additional $15 to $20 million in revenue per year for the Company, which would place total revenues between $30 million-$45 million.

Scenario Three - 10%+ market penetration of prostate, breast, pancreatic, liver, head and neck cancer indications.

Considering there are approximately a quarter million prostate and a quarter million breast cancer cases each year within the US alone, almost all of which will need treatment, and a market that is likely three times this size outside of

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the United States, it is easy to predict numbers that are in the hundreds of millions of dollars in sales several years out should the market significantly catch on to Y-90 as a viable and superior brachytherapy medical isotope.

The Y-90 Marketing Plan On December 2, 2013, management issued a press release discussing its three-year strategy, which focuses its corporate activities on the rollout of the Y-90 products following the anticipated FDA clearance.

Considering the limited capital available to the Company, we are pleased to see the Company indicate its desire to pursue a partnership-based marketing strategy in the United States, which would involve third-party arrangements for manufacturing, sales, distribution and licensing, for what could be a significant new product into the cancer treatment market.

The Company would, however, retain control of its products and a significant role in regulatory matters, marketing and education/training of medical professionals.

The Company’s press release stated that outside of the United States, the Company was contemplating entering into licensing arrangements. We see this as favorable because such arrangements could result in advances, guarantees and royalty payments for the Company, while avoiding or minimizing the costs and risk of launching and growing the product line around the world.

In October 2013, the Company also announced the addition of an experienced technology company CEO, deal-maker and licensing expert to its board of directors as vice-chairman. In its December 2 press release, the Company explained that this individual would advise the Company in seeking and selecting partners and licensees. We see this as a strong addition to the Company’s capacity to commercialize its products.

It also appears the Company is contemplating acquiring a controlling interest in a European-based operation that would potentially help move AMIC into positive operating cash flow more quickly. This operation would assist AMIC in selecting international licensees and also would be an important in enhancing AMIC’s overall isotope and technology distribution capability. Based on the language used in the recent press release, it appears the Company has identified the target company, but a definitive agreement is contingent upon financing.

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The Medical Isotope Market and AMIC’s Expected Future Activities in Production and Distribution The discussion in this report up until now has mainly centered on the Company’s ability to penetrate the market for a new product line based on the Y-90 isotope and the biodegradable polymer delivery method.

We covered this area first in this report simply because we believe it is the area where the Company has its most rapid road to material revenues and profits and the greatest near-term market opportunity. With that said, we also believe the Company has a very viable business in the production of medical isotopes. This is a market in which the Company has experience, with some level of success.

In its December 2, 2013 press release, the Company indicated that it plans to continue operation of its linear accelerator and that it is considering building a larger production facility in Southern California in partnership with a major medical facility. The Company also announced that it will again include the production of medical isotopes as a core business activity after it launches its Y-90 product line.

Hence, we expect that the Company likely will re-focus on this activity in 2015, though it may launch a significant facility before then, as described above.

The overall market value of medical isotopes reached approximately $5 billion during 2012 and is expected to continue to experience significant growth. The market for Tc-99m alone is pegged at approximately $550 million per year.

The traditional way of producing medical isotopes involves the separation of spent uranium fuel within a nuclear reactor. Historically, most of the isotopes supplied to the nuclear medicine industry were sourced from a relatively few research reactors, several of which have been recently shut down. The remaining few reactors producing medical isotopes are decades old and several are scheduled to cease operations.

The medical isotope that is by far in most demand is technetium-99m (Tc-99m), which is used in a wide array of medical diagnostic tests. The worldwide market for this isotope is thought to be approximately $550 million per year with most of the supply being produced by just four nuclear reactors. Many within the nuclear medicine industry are predicting severe shortages of Tc-99m, not only due to the reactor shutdowns, but also due to the cost profile of producing such isotopes. The cost of recovery is often prohibitive, as is the cost of the infrastructure, and thus it has been difficult to attract new investment into this area.

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Due to such concerns, there is significant pressure from government regulators and from within the nuclear medicine community to find alternative methodologies for the production of medical isotopes.

AMIC has an in-house proton linear accelerator that is capable of producing a variety of isotopes that are currently in high demand within the nuclear medicine market place. Due to the issues cited above, it is believed that AMIC could have a very viable market to sell non-reactor produced isotopes in the nuclear medicine industry by building and operating additional linear accelerators to be located near significant medical centers.

AMIC installed and operates a proton linear accelerator manufactured by a division of Hitachi Company at its Washington state isotope production center. This linear accelerator is depicted in Exhibit Seven.

Exhibit Seven – AMIC’s Proton Linear Accelerator

Source: Advanced Medical Isotope Corporation

The Company has had limited contracts for isotopes produced by this linear accelerator, but we believe there is significant room for growth, once the Company is able to evaluate the success of the Y-90 brachytherapy products.

As a result, we believe revenue production from isotope production will be limited over the near-term. Instead we expect the Company to focus on sales agency activities for isotopes and related equipment, which requires little capital. In the most recently reported quarter, the Company produced approximately $115,000 of revenue from these activities. We believe higher quarterly revenues will be obtained from greater distribution in the future.

AMIC has announced that in 2014 it will deemphasize the business of isotope production, which requires additional capital and will instead push full speed ahead with the development and (subject to FDA clearance) commercial deployment of its unique yttrium-90-based brachytherapy products for the treatment of prostate, liver and other cancers, a business activity that requires considerably less capital and that could be profitable in Q4 2014 or early 2015.

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AMIC’s Fundraising Activities We believe the Company clearly has significant revenue potential should FDA clearance be granted for its Y-90 based brachytherapy products. As we indicated previously, we believe the nearest market opportunity is within the prostate cancer market, with the market for liver cancer following any initial successes.

AMIC recently estimated it needs approximately $1.5 million to maintain current operating activities and between $2 million and $5 million to fully fund the FDA approval process and the rollout of the brachytherapy products.

The Company has indicated it has revenue production opportunities relative to sales of third-party isotopes and equipment. Although we believe these are far less important to the Company’s ultimate value, the incremental cash contribution can be achieved without any material capital and can help enhance the Company’s visibility and relationships in the industry.

Management has also been vocal that it seeks to acquire a controlling interest in a company it has identified in Germany. Management believes this would require an investment of approximately $3 million, which would take the form of a combination of cash and stock. With the Company’s share of the target’s profits and the Company’s distribution of isotopes and related equipment, management believes the margin generated by the Company’s brachytherapy products could cover related costs and the Company’s overhead on a cash basis within six months after FDA clearance is received and the Company could turn profitable on a GAAP basis shortly thereafter.

Management also believes it will be able to generate positive cash flow from its Y-90 product line within four to six months after it achieves FDA clearance for the Y-90 RadioGel™ device and could be profitable on an overall basis within twelve months after doing so, even with the increased spending outlined above.

We believe AMIC could be successful in funding these plans. Competitor, IsoRay, Inc. (NYSE:ISR) recently priced an underwritten offering, which raised $3.7 million from an institutional investor.

With strong prospects for FDA clearance of its Y-90 therapy products, we can easily see a scenario where medical device-oriented institutional investors would provide the funding necessary to allow for the rollout of the new products, and to possibly finance the contemplated acquisition of controlling interest in the German company.

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Valuing Advanced Medical Isotope Corporation With approximately 150 million fully diluted common shares, of which insiders own approximately 33%, the market capitalization for the Company is approximately $8 million, which we believe is significantly undervalued considering the company's ability to produce near-term revenues relative to its legacy isotope production and distribution activities and the very strong possibility of FDA clearance for its new Y-90 brachytherapy products.

The capital structure of AMIC is outlined in Exhibit Eight.

Exhibit Eight – Capital Structure of American Medical Isotope Corporation

Dec. 2011 Dec. 2012 Sep. 2013

Common Stock

70,653,399 81,544,459 109,016,604

Insiders 54% 45% 35%

Fully Diluted Common Stock

75,788,399 110,731,160 152,169,201

Insiders 55% 35% 33%

Restricted shares

52,180,703 57,634,212 60,917,633

Shareholders 183 190 196

Market Cap $7.1MM $15.5MM $8.2MM

Source: American Medical Isotope Corp.

With an FDA decision likely by mid-2014, we believe the value of the shares will be event driven until the decision is announced.

An additional factor that could potentially move the valuation higher would be news relative to the Company securing financing. Should an investor step in to finance the Company at the minimum required level of $2 million, AMIC would have adequate financing to finish development of its Y-90 products and to secure the partnerships required to move into commercialization, pending FDA clearance.

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The higher end goal of raising $5 million is within the realm of possibility, in our opinion, especially considering an additional $2 million cash investment with an additional million dollars in stock could secure control of a European-based company that would help move the Company toward positive cash flow.

The Bottom Line • We believe this Company is on the verge of a major product

introduction into the brachytherapy market. We view the Y-90 brachytherapy products as a possible hybrid between the legacy low dosage rate products that utilize permanent seeds for the treatment of prostate cancer and the high dose rate therapies that are gaining in popularity.

• The safety profile of Y-90, for both patient and practitioner, is a significant improvement over currently available low dose rate products.

• We believe a compelling argument can be made that considering the higher therapeutic doses that can be administered, Y-90-based products may exhibit superior efficacy.

• Use of the RadioGel™ device and the polymer seeds will certainly eliminate seed migration issues and use may prove to offer better dose homogeneity within the tissue. We believe the issue of no foreign matter being left in the prostate upon completion of the therapy will be an additional selling point relative to the adoption of AMIC’s Y-90 products.

• We believe FDA clearance is likely by mid-2014 as there are several close predicate devices currently approved and on the market.

• While it appears that the Y-90 products are superior as to efficacy, safety and cost compared to what is on the market today, we believe the question will be whether the Company can demonstrate to convince physicians that the benefits justify a change in the therapies to which they have become accustomed. It certainly appears that many physicians are actively seeking new technologies and therapies for the treatment of prostate cancer. We believe it will be important to not just market the Y-90 based products as simply as an improved isotope. Even though Cs-131 is a significant improvement over Pd-103, physicians are not exactly scrambling to embrace the technology. The overall benefits of Y-90 must be emphasized.

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Board of Directors James C. Katzaroff – Chairman, Founder and CEO

A strong desire to make an unshakable impact in the fight against cancer led Mr. Katzaroff to found AMIC in 2006. Mr. Katzaroff was a financial consultant for Wall Street firms Bateman Eichler, Smith Barney and EFHutton. Since 1990, he has been responsible for corporate engineering, senior-level corporate strategy, and fostering investment bank relationships while serving as a senior financial advisor for numerous start-ups and development stage companies. Katzaroff serves on the Board of Directors for the Washington Biotechnology and Biomedical Association (WBBA), is Vice Chairman of Go Nuclear Inc. and past Vice Chairman of the Fighting Children’s Cancer Foundation.

Kenin M. Spivak – Vice Chairman, Director

An entrepreneur, financier, author and attorney, Spivak has led nearly $10 billion of precedent-setting licensing, merger, acquisition and other complex transactions and multinational corporations with thousands of employees. After starting his career as an attorney, Spivak joined a Mobil Oil subsidiary and then Merrill Lynch Investment Banking, where he led numerous financings, mergers and acquisitions in the United States, Europe and Asia. Since leaving Merrill Lynch, Spivak has served as chairman, vice chairman, president, CEO and a senior board member of numerous companies in technology, media and finance. He is a director of the prestigious RAND Corporation’s corporate ethics center, co-editor of the Knowledge Exchange Business Encyclopedia and a patent-holder. He received an A.B., M.B.A. and law degree from Columbia University.

Dr. Carlton Cadwell – Director

Dr. Cadwell brings over 30 years of experience in business management, strategic planning, and implementation. He co-founded Cadwell Laboratories, Inc. in 1979 and has served as its President since its inception. Cadwell Laboratories, Inc. is a major international provider of neurodiagnostic medical devices.

Thomas J. Clement - Director

Clement has over 32 years’ experience in product development engineering, engineering management, and senior management. Tom Clement is currently the CEO of Aqueduct Neurosciences, Inc, and previously was the CEO of Cardiac Insight, Inc. Pathway Medical Technologies, Inc, and a founding employee of Heart Technology. He is the recent Chairman of the Board of Directors for the Washington Biotechnology and Biomedical Association

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(WBBA), and he remains on the Executive Committee of the WBBA.

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Analyst and Other Important Disclosures

Analyst Certification - We, certify (1) that the views expressed in this research company report accurately reflect our personal views about any, or all, of the subject securities or issues reflected in this company report, and (2) the analyst does not own these securities.

The coverage analyst uses a relative rating system in which stocks are rated as; BUY/SPECULATIVE, SELL, or HOLD.

Stock Ratings:

BUY/SPECULATIVE - the stock is expected to outperform the non-weighted expected total return of the sector over a 12-month investment horizon.

SELL - the stock is expected to underperform the non-weighted expected total return of the sector over a-12 month time horizon

HOLD - the stock is expected to perform in line with the non-weighted expected total return of the sector over a 12-month investment horizon.

______________________________________________________________________________________________________________________________

Information, opinions, or recommendations contained in this research report are submitted solely for informational purposes. The information used in statements of fact made has been obtained from sources

considered reliable, but we neither guarantee nor represent their completeness or accuracy. Such information and the opinions expressed are subject to change without notice. This research report is not intended

as an offering or a solicitation of any offer to buy or sell the securities mentioned or discussed. The firm, its principles, or the assigned analyst do not own or trade shares, options, or warrants of this covered

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