UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

Amendment No. 4

(Mark One)


þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003.


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___TO ___.


		Commission file number No. 0-11881

INTERWEST MEDICAL CORPORATION

(Exact name of registrant as specified in its charter)


Oklahoma		75-1864474

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


3221 Hulen Street, Suite C Fort Worth, Texas		76107-6193


(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (817)731-2743

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

NONE

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

NONE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act)
o Yes þ No

As of June 30, 2003, the aggregate market value of the 9,620,461 shares of voting Common Stock held by non-affiliates of the Company was approximately $577,777.00 based on the average bid and ask prices on that date.

APPLICABLE ONLY TO CORPORATE REGISTRANTS

Indicate the number of shares outstanding of each of registrant’s classes of Common Stock, as of the latest practicable date.


		Shares Outstanding
Class		as of April 10, 2004

Common Stock, $0.001 Par Value		15,915,461

DOCUMENTS INCORPORATED BY REFERENCE

(a)	Prospectus dated June 6, 1983 — incorporated by reference in Part I.

(b)	Exhibits to the Registration Statement No. 2-82655 on Form S-18 — Part IV.

(c)	Form 8-K, dated July 2, 1990.

TABLE OF CONTENTS


PART I
	Item 1. Business
	Item 2. Properties
	Item 3. Legal Proceedings
	Item 4. Submission of Matters to a Vote of Security Holders
PART II
	Item 5. Market for Registrant’s Common Equity and Related Stockholders Matters
	Item 6. Selected Financial Data
	Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 7a. Qualitative and Quantitative Disclosure About Market Risk
	Item 8. Financial Statements and Supplementary Data
	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
	Item 9a. Controls and Procedures
PART III
	Item 10. Directors and Executive Officers of the Registrant
	Item 11. Executive Compensation
	Item 12. Security Ownership of Certain Beneficial Owners and Management
	Item 13. Certain Relationships and Related Transactions
PART IV
	Item 14 Principle Accounting Fees and Services
	Item 15 Exhibits, Financial Statement Schedules and Reports on Form 8-K.
INDEX TO EXHIBITS
SIGNATURES
Code of Ethics
Certification of CEO and CFO Pursuant to Section 302
Certification Pursuant to Section 906

FORM 10-K

INTERWEST MEDICAL CORPORATION

PART I

Item 1. Business.

InterWest Medical Corporation (the “Company”) was incorporated under the laws of the State of Oklahoma on March 3, 1983. The principal office and place of business of the Company is located at Suite C, 3221 Hulen Street, Fort Worth, Texas 76107-6193. Its telephone number is (817) 731-2743.

The Company was organized to engage in the business of developing, operating and owning surgery centers itself and in association with others. The Company did not, however, develop any surgery centers.

In April 1984, the Company commenced efforts to develop nursing homes in an effort to diversify its efforts. The Company built and sold to an unrelated purchaser a 187-bed skilled nursing home in Vista, California. The Company presently owns and operates a 156-bed skilled nursing home in Colton, California. The Company does not at this time have any plans to develop other nursing homes.

The Company’s business is extremely competitive in all phases. Many of its competitors, both public and private, possess and employ financial and personnel resources substantially greater than those which are currently available to the Company.

Item 2. Properties.

The Company owns and operates a 156-bed skilled nursing home located on a nine-acre parcel of land in Colton, California. At December 31, 2003, the Company had an undepreciated cost of $3,058,271 in such facility, including equipment and furniture.

Item 3. Legal Proceedings.

In the opinion of management, all litigation pertaining to the operations is considered to be ordinary routine litigation incidental to its business and that the disposition of all outstanding legal actions will not have a material adverse effect on the Company.

Item 4. Submission of Matters to a Vote of Security Holders.

No matters were submitted to a vote of security holders during the fourth quarter of 2003, except for the election of directors at the annual meeting of shareholders.

PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholders Matters.

The Company’s Common Stock is traded in the national over-the-counter market and is listed in the pink sheets. The high and low bid prices quoted for each quarter in the past two calendar years were as follows:


Period	Low Bid	High Bid
1^st Quarter, 2002	$0.09	$0.12
2^nd Quarter, 2002	$0.09	$0.11
3^rd Quarter, 2002	$0.09	$0.11
4^th Quarter, 2002	$0.09	$0.11

1^st Quarter, 2003	$0.04	$0.06
2^nd Quarter, 2003	$0.04	$0.09
3^rd Quarter, 2003	$0.06	$0.10
4^th Quarter, 2003	$0.06	$0.11

As of March 15, 2003, the approximate number of holders of Common Stock was 1770. No cash dividends had been paid as of December 31, 2003, and the Company does not currently anticipate paying cash dividends in the foreseeable future.

Item 6. Selected Financial Data.

The following table sets forth certain summary financial information concerning the Company.


	2003			2002			2001			2000			1999
Operating Revenues	$	15,849,894		$	13,489,084		$	13,347,836		$	12,349,695		$	11,295,408

Net income (loss)		(155,713	)		(1,233,558	)		(822,941	)		(2,512,242	)		1,657,032

Total Assets		8,344,031			8,230,816			9,119,421			9,966,256			13,247,657

Long-term Debt		4,555,316			4,293,990			4,340,814			4,388,104			4,435,560

Earnings per common share		(0.01	)		(0.08	)		(0.05	)		(0.16	)		0.11

Cash dividends declared		0.00			0.00			0.00			0.00			0.00

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(a) Liquidity and Capital Resources:

During the year 2001, the Company’s cash increased from $885,513 to $1,412,024. Accordingly, there was an increase in cash of $526,511. Additionally, the Company’s trading assets increased from $1,379,138 to $1,477,949, or a increase of $98,811. These increases were the result of operations and investment trading activities.

During the year 2002, the Company’s cash decreased from $1,412,024 to $1,004,795. Accordingly, there was a decrease in cash of $407,229. This decrease was caused by losses from operations and purchases of property and equipment.

During the year 2003, the Company’s cash decreased from $1,004,795 to $796,434. Accordingly, there was a decrease in cash of $208,361. Additionally, the Company’s trading assets increased from $186,606 to $355,252, or an increase of $168,646. These changes were the result of gains incurred in investment trading activities.

The Company is not aware of any known trends or any known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in the registrant’s liquidity increasing or decreasing in any material way.

In the Company’s view, its short-term liquidity and short-term capital resources will be sufficient to cover its cash needs up to 12 months into the future. The Company does not presently anticipate material capital expenditures. The Company does not have any significant balloon payments. The Company’s long-term debt consists of a mortgage loan bearing interest at the rate of 5% and is payable in monthly installments of $23,307. It is anticipated that these payments will be made from revenues received by the operation of the Company’s nursing home.

(b) Results of Operations:

From time to time the Company has invested a portion of its liquid funds in stocks which trade on an exchange or over the counter and which investments are referred to herein as trading assets.

Operating profit for 2001 was $230,370, as compared to operating profit of $564,770 for 2000. The net loss decreased from ($2,512,242) to ($822,941) for the year 2001. The decrease in net loss in 2002 as compared to 2001 was the result of a reduction in investment trading losses.

Operating profit for 2002 was $284,877, as compared to operating profit of $230,370 for 2001. The increase in operating income was attributable to an increase in revenues,

as a result of an increase in the annual daily census of 2.1$. Net loss in 2002 was ($1,233,558), as compared to ($822,941) in 2001. The increase 5.n loss was attributable to an increase in losses on securities.

Operating profit for 2003 was $260,746, as compared to operating profit of $284,877 for 2002. Net loss decreased from ($1,233,558) for 2002 to ($155,713) for the year 2003. The decrease was the result of investment trading results and an increase in annual daily census from 140 to 145 and an increase of 10% in per patient day revenues.

Total revenues for 2003 was $15,849,894 as compared to $13,489,084 in 2002. The increase in revenue was attributable to an increase in average daily census of 145 compared to 140 in 2002. The increase in revenues was more than offset by an increase in operating expenses attributable largely to an increase of labor costs resulting from increased staff and higher wage levels. Operating profit for 2003 was $260,746, as compared to operating profit of $284,877 for 2002. In 2003 the Company realized a loss on refinancing of ($349,320) as a result of refinancing the facility. In 2003, the Company realized $164,669 gain on the sale of securities as compared to a loss on securities of ($1,233,736) in 2002. As a result, net loss in 2003 was ($155,713) as compared to net loss of ($1,233,558) in 2002.

The Company has a contract with Kaiser Foundation Hospitals that expires July, 2006 for the nursing care of Kaiser’s patients. In 2003, this contract provided 59% of the Company’s revenues. This company has no other material contracts. This contract has favorably impacted the company’s operations because patients under this contract have replaced patients from other lower revenue sources. The Company’s operations would be negatively impacted upon the loss of this contract in the event it is not renewed upon its expiration.

The Company has no planning and has no economist on staff. Its operations are limited to one nursing home and, therefore, it has not had a broad range of experience from an industry standpoint. From its limited operations, the Company is of the view that as the country’s population continues to age the need for nursing services will increase, particularly for care of patients with higher acuity. The industry appears to be mature and competition is expected to remain at a high level. Increased pressure on rates is expected to come from efforts of both government and industry. Employee costs and cost of workers compensation premiums are expected to increase. Patient litigation has increased recently and is expected to continue to increase in the future.

Effects of Inflation:

The Company is of the view that inflation did not affect its operations in 2003 and should not in 2004

Item 7a. Qualitative and Quantitative Disclosure About Market Risk

The Company did not enter into any derivative financial instruments in 2003 and does not anticipate any in 2004.

The Company has no variable rate debt. The Company’s mortgage note carries a 5% fixed rate and would be unaffected by changes in interest rates.

Item 8. Financial Statements and Supplementary Data.


		Page No.

Independent Auditor’s Report		F-1

Consolidated Balance Sheets December 31, 2003 and 2002		F-2

Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2003, 2002 and 2001		F-4

Consolidated Statements of Stockholders’ Equity for Years Ended December 31, 2003, 2002 and 2001		F-5

Consolidated Statements of Cash Flows for the Years Ended December 2003, 2002 and 2001		F-6

Notes to Consolidated Financial Statements		F-8

Schedule II — Valuation and Qualifying Accounts		F-15

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

There have been no disagreements with accountants on any matter of accounting principles or practices or financial statement disclosures during the twenty-four (24) month period ended December 31, 2003.

Item 9a. Controls and Procedures

Within 90 days of the filing of this 10-K, an evaluation was performed under the supervision and with the participation of the Company’s management, including the CEO, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-14 and 15d-14 under the Securities Act of 1934). Based on that evaluation, the Company’s management, including Mr. Arch Gilbert, who acts as the principal executive and principal financial officer, concluded that the Company’s disclosure controls and procedures were effective as of March 19, 2004. There have been no changes in the Company’s internal controls or in other factors that could affect internal controls subsequent to the date of the evaluation.

Evaluation of Disclosure Controls and Procedures. Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e) as of the end of the period covered by this report. Based on that evaluation, Mr. Arch Gilbert, who acts as the Chief Executive Officer and Chief Financial Officer has concluded that our disclosure controls and procedures are effective in alerting him on a timely basis to material information relating to the Company required to be included in our periodic SEC reports.

Change in Internal Control. There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2003 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

INDEPENDENT AUDITOR’S REPORT

To the Board of Directors and Shareholders
InterWest Medical Corporation

We have audited the accompanying consolidated balance sheets of InterWest Medical Corporation and subsidiaries as of December 31, 2003 and 2002, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the years in the three year period ended December 31, 2003. Our audits also included the financial statement schedule II for each of the years in the three-year period ended December 31, 2003. These consolidated financial statements and the financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and the financial statement schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of InterWest Medical Corporation and subsidiaries as of December 31, 2003 and 2002, and the consolidated results of their operations and their cash flows for each of the years in the three year period ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the financial statement schedule II when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

(WEAVER AND TIDWELL, L.L.P.)

WEAVER AND TIDWELL, L.L.P.
Fort Worth, Texas
March 19, 2004

4172

F-1

(1 of 2)

INTERWEST MEDICAL CORPORATION
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2003 AND 2002


	2003		2002
ASSETS

CURRENT ASSETS
Cash, including interest bearing accounts, 2003 $555,443; 2002 $730,748	$	796,434	$	1,004,795
Accounts receivable - trade, net of allowance for doubtful accounts, 2003 $452,000; 2002 $110,033		3,655,364		2,783,978
Investments - trading		355,252		186,606
Prepaid expenses and other receivables		75,933		530,505


Total current assets		4,882,983		4,505,884

PROPERTY AND EQUIPMENT, at cost
Land		294,354		294,354
Buildings and improvements		4,147,464		3,960,924
Equipment and furniture		1,240,906		1,389,927
Oil and gas properties (successful efforts method of accounting)		170,489		170,489


		5,853,213		5,815,694
Less accumulated depreciation and depletion		2,723,936		2,480,107


		3,129,277		3,335,587
OTHER ASSETS
Cash escrow accounts		253,202		40,025
Deferred financing costs, net		78,569		349,320


		331,771		389,345


TOTAL ASSETS	$	8,344,031	$	8,230,816

The Notes to Consolidated Financial Statements
are an integral part of these statements.

F-2

(2 of 2)

INTERWEST MEDICAL CORPORATION
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2003 AND 2002


	2003			2002
LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Current maturities of long-term debt	$	50,539		$	50,898
Accounts payable		2,022,066			2,077,100
Accrued salaries		708,786			645,766


Total current liabilities		2,781,391			2,773,764

LONG-TERM DEBT		4,555,316			4,293,990


Total liabilities		7,336,707			7,067,754

COMMITMENTS AND CONTINGENCIES		—			—

STOCKHOLDERS’ EQUITY
Common stock, par value $0.001, authorized 50,000,000 shares; issued 22,000,000 shares		22,000			22,000
Additional paid-in capital		5,096,745			5,096,745
Retained earnings (deficit)		( 3,059,187	)		( 2,903,474	)

		2,059,558			2,215,271

Less cost of shares held in the treasury, 2003 - 6,084,539 shares; 2002 - 6,084,289 shares		892,234			892,209
Notes receivable - officer		160,000			160,000


		1,007,324			1,163,062


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	8,344,031		$	8,230,816

The Notes to Consolidated Financial Statements
are an integral part of these statements.

F-3

INTERWEST MEDICAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001


	2003			2002			2001
REVENUES
Patient service revenue	$	15,804,213		$	13,435,829		$	13,284,809
Other revenue		45,681			53,255			63,027


Total revenue		15,849,894			13,489,084			13,347,836

COSTS AND EXPENSES
Professional care of patients		9,402,039			8,010,399			7,775,638
General services		2,988,107			2,617,876			2,436,208
Administrative services		2,906,192			2,246,550			2,621,360
Other costs		15,791			37,000			16,782
Depreciation, depletion and amortization		277,019			292,382			267,478


		260,746			284,877			230,370

OTHER INCOME (EXPENSES)
Gain (loss) on sale of securities		164,669			( 1,233,736	)		( 690,316	)
Loss on refinancing		( 349,320	)		—			—
Interest income		13,747			34,174			64,407
Interest expense		( 245,555	)		( 329,864	)		( 352,209	)


Income (loss) before taxes on income		( 155,713	)		( 1,244,549	)		( 747,748	)

Provision (benefit) for income taxes		—			( 10,991	)		75,193


Net income (loss)	($	155,713	)	($	1,233,558	)	($	822,941	)


Weighted averages shares outstanding		15,914,192			15,918,773			15,929,353


Earnings per common share - basic and diluted	($	0.01	)	($	0.08	)	($	0.05	)

The Notes to Consolidated Financial Statements
are an integral part of these statements.

F-4

INTERWEST MEDICAL CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001


	Common Stock				Additional		Retained
	Number of		Par		Paid-in		Earnings			Treasury			Note
	Shares		Value		Capital		(Deficit)			Stock			Receivable
BALANCE, December 31, 2000		22,000,000	$	22,000	$	5,096,745	($	846,975	)	($	889,989	)	($	160,000	)
Net loss		—		—		—		( 822,941	)		—
Purchase of 5,500 shares of common stock		—		—		—		—			( 550	)		—


BALANCE, December 31, 2001		22,000,000		22,000		5,096,745		( 1,669,916	)		( 890,539	)		( 160,000	)
Net loss		—		—		—		( 1,233,558	)		—			—
Purchase of 8,900 shares of common stock		—		—		—		—			( 1,670	)		—


BALANCE, December 31, 2002		22,000,000		22,000		5,096,745		( 2,903,474	)		( 892,209	)		( 160,000	)
Net Loss		—		—		—		( 155,713	)		—			—
Purchase of 250 shares of common stock		—		—		—		—			( 25	)		—


BALANCE, December 31, 2003		22,000,000	$	22,000	$	5,096,745	($	3,059,187	)	($	892,234	)	($	160,000	)

The Notes to Consolidated Financial Statements
are an integral part of these statements.

F-5

INTERWEST MEDICAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001


	2003			2002			2001
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers/patients	$	14,978,508		$	13,064,210		$	13,474,485
Interest received		13,747			34,174			62,955
Cash paid to suppliers and employees		( 14,869,775	)		( 12,992,557	)		( 12,735,386	)
Investments — net		( 3,977	)		51,252			( 789,127	)
Interest paid		( 225,351	)		( 303,161	)		( 352,209	)
Income taxes paid (refunded)		—			15,632			1,028,429


Net cash provided by (used in) operating activities		( 106,848	)		( 130,450	)		689,147

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		( 69,826	)		( 240,457	)		( 150,925	)
Proceeds from sale of assets		—			20,701			—
Mortgage escrow deposits, net		( 21,477	)		( 12,137	)		32,777


Net cash used in investing activities		( 91,303	)		( 231,893	)		( 118,148	)

CASH FLOWS FROM FINANCING ACTIVITIES
Loan proceeds		73,665			—			—
Payments on debt		( 83,850	)		( 43,216	)		( 43,938	)
Purchase of treasury stock		( 25	)		( 1,670	)		( 550	)


Net cash used in financing activities		( 10,210	)		( 44,886	)		( 44,488	)


Net increase (decrease) in cash		( 208,361	)		( 407,229	)		526,511

CASH, beginning of period		1,004,795			1,412,024			885,513


CASH, end of period	$	796,434		$	1,004,795		$	1,412,024

The Notes to Consolidated Financial Statements
are an integral part of these statements.

F-6

INTERWEST MEDICAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001


	2003			2002			2001
RECONCILIATION OF NET INCOME (LOSS) TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

Net income (loss)	($	155,713	)	($	1,233,558	)	($	822,941	)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities

(Gain) loss on securities		( 164,669	)		1,233,736			690,316
Depreciation and amortization		277,019			292,382			267,478
Loss on refinancing		349,320			—			—
Deferred taxes		—			—			209,527
Changes in assets and liabilities
Accounts receivable		( 871,386	)		( 424,874	)		126,649
Prepaid expenses and other receivables		454,572			( 443,868	)		( 1,542	)
Trading securities		( 3,977	)		51,252			( 789,127	)
Accounts payable		( 55,034	)		340,700			175,016
Accrued liabilities		63,020			49,139			( 58,872	)
Income taxes payable (receivable)		—			4,641			894,095
Other		—			—			( 1,452	)


Net cash provided by (used in) operating activities	($	106,848	)	($	130,450	)	$	689,147

NON-CASH INVESTING AND FINANCING ACTIVITIES

In 2003, the Company refinanced it’s mortgage on its healthcare facility, of which $191,700 of escrow deposits and $79,452 of loan costs were financed as part of the refinancing.

The Notes to Consolidated Financial Statements
are an integral part of these statements.

F-7

INTERWEST MEDICAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

The accounting policy relative to property and equipment is shown on the accompanying balance sheets. Other significant accounting policies are as follows:

Basis of Presentation

The consolidated financial statements include the accounts of InterWest Medical Corporation and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated.

Depreciation

Depreciation of long-term health care property and equipment is provided principally on the straight-line method over the estimated useful lives of the depreciable assets. Estimated useful lives of depreciable assets are as follows:


Buildings and improvements		31 years
Equipment and furniture		7 years

Investments in Securities

The Company’s investments in securities are classified as follows:

Trading Securities - Investments in debt and equity securities held principally for resale in the near term are classified as trading securities and recorded at their fair values. Unrealized gains and losses on trading securities are included in other income.

Securities to be Held to Maturity - Debt securities for which the Company has the positive intent and ability to hold to maturity are reported at cost, adjusted for amortization of premiums and accretion of discounts which are recognized in interest income using the interest method over the period to maturity.

Securities Available for Sale - Securities available for sale consist of its debt and equity securities not classified as trading securities nor as securities to be held to maturity.

Unrealized holding gains and losses on securities available for sale are reported as a net amount in accumulated other comprehensive income in stockholders’ equity until realized.

Gains and losses on the sale of securities available for sale are determined using the specific identification method.

F-8

INTERWEST MEDICAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES – continued

Oil and Gas Property and Equipment

The Company utilizes the “successful efforts” method of accounting for costs incurred in the exploration and development of oil and gas properties. Accordingly, costs incurred in the acquisition and exploratory drilling of oil and gas properties are accumulated and subsequently either expensed, if the properties are determined not to have proved reserves or capitalized as a depletable asset if proved reserves are discovered. Costs of drilling development wells are capitalized. Geological, geophysical and carrying costs are charged to expenses as incurred. Acquisition costs relating to producing oil and gas properties are amortized on a prospect by prospect basis using the units-of-production method based on engineers’ estimates of proven oil and gas reserves. Depletion and depreciation of producing oil and gas properties (other than acquisition costs) are amortized by prospect using the units-of-production method based on estimated proved developed reserves. At one time the Company had a subsidiary involved in Oil and Gas operations. The Company is not pursuing oil and gas exploration activities and the remaining costs in oil and gas activities of $170,489 are fully depleted and included in accumulated depreciation and depletion.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Financial Instruments

Financial instruments of the Company consist of cash, accounts receivable, investments and debt. Recorded values of cash and accounts receivable approximate fair values due to the short maturities of the instruments. For information on the fair value of investments, see Note 2. The fair value of debt is estimated at its carrying value at December 31, 2003 and 2002, based upon current interest rates of similar debt which approximates the Company’s mortgage interest rate.

Revenue

The Company operates an acute care facility in Colton, California.

Patient service revenue is reported at the estimated net realizable amounts from patients, third-party payers, and others as services are rendered and net realizable values are determined based upon preapproved rates or negotiated contracts. The Company derives a significant portion of its revenues from third party payers (health maintenance organizations, Medicare and Medi-Cal). Approximately 59% of 2003 revenue and 53% of 2002 revenue was derived from a contract with one health maintenance organization.

F-9

INTERWEST MEDICAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES – continued

Revenue – continued

Revenue under third-party payer agreements is subject to audit and retroactive adjustment. Provisions for estimated third-party payer settlements are provided in the period the related services are rendered. Differences between the estimated amounts accrued and interim and final settlements are reported in operations in the year of settlement. For 2003, 2002, and 2001, final settlements with third-party providers were immaterial.

Income Taxes

The Company provides for deferred taxes resulting from temporary differences between the basis of assets and liabilities for financial and tax reporting purposes. Such differences result principally from the use of the direct write-off method for bad debts for tax reporting purposes and unrealized losses on investment securities.

Earnings Per Common Share

Dilutive earnings per share have not been presented since the inclusion of potential common stock would be antidilutive.

Amortization

Costs of obtaining financing are amortized over the term of the financing.

Credit Risk

The Company regularly maintains cash in bank deposit and brokerage accounts which exceed FDIC/SPIC insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Stock-based Compensation

The Company recognizes compensation costs for stock-based compensation plans based on the difference, if any, between the quoted market price of the stock and the amount an employee must pay to acquire the stock. The dates that quoted market prices are determined may vary depending on whether the terms of an award are fixed or variable.

F-10

INTERWEST MEDICAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES – continued

Stock-based Compensation – continued

The Financial Accounting Standards Board has issued Statement No. 123 establishing a fair value based method of accounting for stock-based compensation plans. As permitted under Statement No. 123, the Company does not intend to adopt the recognition or accounting requirements of the statement.

NOTE 2. INVESTMENT SECURITIES

Investment securities consist entirely of equity securities.

Included in gain (loss) on sale of investments for 2003 is $343,839 of unrealized gain on trading securities held at year end. In 2002 and 2001; $521,182 and $418,728, respectively, of unrealized loss on trading securities was held at year end.

NOTE 3. CAPITAL STOCK

The Company has adopted a Stock Option Plan which provides for the granting of options to officers and other key employees for the purchase of common stock of the Company.

The Plan reserves 1,500,000 shares of common stock for the granting of such options. Options are subjected to adjustment upon any change in the capital structure of the Company such as a stock dividend, stock split or other similar events.

Options may be granted at not less than 100% of the fair market value of the Company stock at the date of grant, and are exercisable during a term of ten years from the date of grant at any time in whole or in part, and are subject to continued employment and other conditions as set forth in the option agreement.

Options are exercisable only by the participants and are not assignable during their lifetime and must be exercised within one year of the death of the participant by his legal representatives.

F-11

INTERWEST MEDICAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3. CAPITAL STOCK – continued

A summary of the status of the Company’s stock options for 2003, 2002 and 2001 is as follows:


	2003				2002				2001
			Weighted				Weighted				Weighted
			Average				Average				Average
	Shares		Exercise		Shares		Exercise		Shares		Exercise
	(000)		Price		(000)		Price		(000)		Price
Outstanding, beginning		1,500		.15		1,500	$	.15		1,500	$	.15
Granted		—		—		—		—		—		—
Exercised		—		—		—		—		—		—
Forfeited		—		—		—		—		—		—


Outstanding, ending		1,500		.15		1,500	$	.15		1,500	$	.15


Options exercisable at year end		1,500	$	.15		1,500	$	.15		1,500	$	.15


Weighted average fair value of options granted during the year			$	—			$	—			$	—

At December 31, 2003, the 1,500,000 options have an exercise price of $0.15 per share and a weighted average remaining contractual life of 6.25 years.

NOTE 4. RELATED PARTY TRANSACTIONS

	During the years ended December 31, 2003, 2002 and 2001, Arch B. Gilbert, a Professional Corporation, whose sole stockholder is president of the Company, was paid $82,500, $193,163 and $225,326, respectively, for legal services rendered.

	During the years ended December 31, 2003, 2002 and 2001, the above corporation was reimbursed $34,307, $26,547 and $50,273, respectively, for expenses incurred on behalf of the Company.

	During 2003, 2002 and 2001, the wife of the Company’s president performed consulting services for the Company for which she received annual compensation of $36,000.

	The Company has a note receivable from its president. The note bears interest at 6% annually and principal is due at maturity, April 1, 2004. Interest accrued on the note was $9,600 annually in 2003, 2002 and 2001.

F-12

INTERWEST MEDICAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5. FEDERAL INCOME TAXES

The Company’s tax provision (benefit) for 2003, 2002 and 2001 consists of the following:


	2003			2002			2001
Current expense (benefit)	($	—	)	($	10,991	)	($	134,334	)
Deferred taxes		—			—			—
Re-evaluation of valuation allowance on beginning temporary differences		—			—			209,527


	($	—	)	($	10,991	)	$	75,193

The 2003, 2002 and 2001 tax provision (benefit) differs from the amount calculated by applying statutory tax rates to pre-tax income as follows:


	2003			2002			2001
Tax at statutory rates	($	52,942	)	($	423,147	)	($	254,234	)
Re-evaluation of valuation allowance on beginning temporary differences		—			—			209,527
Losses not providing benefits		52,908			412,112			119,855
Other		34			44			45


	($	—	)	($	10,991	)	$	75,193

	All income (loss) since inception relates to domestic activity.

	The tax effects of temporary differences at December 31, 2003 and 2002 that give rise to significant portions of deferred tax assets and deferred tax liabilities are as follows:


	2003			2002
Deferred tax assets
Unrealized loss on marketable securities	$	60,296		$	177,202
Expense deduction in future periods		153,680			37,411
Capital loss carryforward		875,302			831,552
Other carryforwards		31,398			—


		1,120,676			1,046,165

Deferred tax liabilities
Depreciation and depletion		( 79,615	)		( 115,476	)
Valuation allowance		( 1,041,061	)		( 930,689	)


Deferred tax asset (liabilities), net	$	—		$	—

	During 2003, the valuation allowance increased $110,372. The valuation allowance increased $399,645 in 2002.

	The Company has a capital loss carryforward of approximately $2,574,000, ultimately expiring in 2008, and a net operating loss carryforward of approximately $85,000 due to expire in 2021.

F-13

INTERWEST MEDICAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6. LONG-TERM DEBT

Long-term debt consisted of the following at December 31:


	2003		2002
Mortgage loan for financing of a nursing home constructed in Colton, California. The mortgage loan bears interest at 5%, is due in monthly installments of $23,307 (principal and interest), matures in September, 2038 and is secured by real estate	$	4,605,855	$	4,344,888

Less current maturities		50,539		50,898


	$	4,555,316	$	4,293,990

Aggregate maturities of long-term debt for each of the succeeding five years and thereafter is as follows:


2004	$	50,539
2005		53,125
2006		55,842
2007		58,699
2008		61,703
Thereafter		4,325,947


	$	4,605,855

NOTE 7. CONTINGENCIES

The Company is involved in litigation pertaining to its long-term health care operations. It is the Company’s opinion that any loss incurred would be adequately covered by insurance and the ultimate liability, if any, should not have a material adverse effect on the Company’s consolidated financial position.

NOTE 8 EMPLOYEES RETIREMENT PLAN

The Company has a retirement plan covering substantially all of its employees. Contributions to the plan in 2003, 2002 and 2001 totaled $55,301, $61,144, and $79,518, respectively.

F-14

INTERWEST MEDICAL CORPORATION
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS


			Column C
			Additions
	Column B		Charged
	Balance at		to Costs		Charged				Column F
	Beginning		and		to Other		Column E		Balance at
Column A	of Period		Expenses		Accounts		Deductions		End of Period
Allowance for doubtful accounts

Year ended December 31, 2001	$	52,932	$	129,127	$	—	$	7,864	$	174,195


Year ended December 31, 2002	$	174,195	$	88,513	$	—	$	152,675	$	110,033


Year ended December 31, 2003	$	110,033	$	390,360	$	—	$	48,393	$	452,000

F-15

PART III

Item 10. Directors and Executive Officers of the Registrant.

(a) Identification of Directors:

The directors of the Company are elected annually to serve until the next Annual Meeting and until their successors are elected and qualified.


			Year First Became
			a Director of
Name	Age		Company	Position
Arch B. Gilbert		70	1983 (1)		President, Secretary, Treasurer & Director

(1) Date of incorporation

(b) Identification of Executive Officers:


Name	Position	Age
Arch B. Gilbert	President, Secretary, Treasurer		70

Officers serve at the discretion of the Board of Directors.

Arch B. Gilbert received his B.A. and his LL.B. degrees from the University of Oklahoma in 1955 and 1957 respectively. He also his received his LL.M. degree from Southern Methodist University in 1963. Since August 1, 1979, Mr. Gilbert has been a member of the law firm of Arch B. Gilbert, A Professional Corporation. From February 1, 1962 to August 1, 1979, Mr. Gilbert was a member of the law firm of Brooks, Tarlton, Gilbert, Douglas & Kressler, Fort Worth, Texas.

There is no family relationship between any director or executive officer of the Company.

No personal meetings of the directors took place in 2003. All resolutions of the directors were taken by written consent.

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors, executive officers and persons who own more than 10% of the Company’s outstanding Common Stock to file with the Securities and Exchange Commission reports of changes in ownership of the Common Stock of the Company held by

such persons. Officers, directors and greater than 10% shareholders are also required to furnish the Company with copies of all forms they file under this regulation. To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company, during the two fiscal years ended December 31, 2003, all Section 16(a) filing requirements applicable to its officers, directors and greater than 10% shareholders were complied with.

Item 11. Executive Compensation.

During the fiscal year ended December 31, 2003, Arch B. Gilbert did not receive any direct remuneration.

All executive officers as a group (1 person) received cash remuneration in fiscal year 2003 of $0. This does not include legal fees paid to the law firm of the President of reimbursement or expenses paid to it. See Item 13. Directors do not receive any compensation for their services as directors.

The Company has established an Incentive Stock Option Plan (the “Plan”) which reserved 1,500,000 shares of Common Stock for the exercise of options which may be granted to directors, officers, employees and others. Mr. Gilbert was granted an option to purchase 1,500,000 shares of stock at $.15 per share on April 1, 1999. The option is for a period of 10 years.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

(a) The following table sets forth, as of April 1, 2003, certain information regarding all persons known to the Company to be the beneficial owners (as determined in accordance with the Rules under the Securities Exchange Act of 1934) of more than 5% of the Company’s Common Stock:


Name and Address	Shares
of	Beneficially
Beneficial Owner	Owned		Percent
Arch B. Gilbert	6,702,400	(1)	33.5%
3221 Hulen Street
Suite C
Fort Worth, Texas 76107

Reche Canyon Convalescent	6,060,507	(1)	30.3%
Center, Inc.
1350 Reche Canyon Rd.
Colton, CA 92324

(1) Includes 444,000 shares owned by Arch B. Gilbert, A Professional Corporation. Includes 6,000 shares owned by Jo Anne Gilbert, Mr. Gilbert’s wife. Does not include shares owned by Shannon Gilbert Moten or Devon Vrana, Mr. Gilbert’s adult daughters, which beneficial ownership Mr. Gilbert disclaims. Does not include options to purchase 1,500,000 shares. Does not include shares owned by Reche Canyon Convalescent Center, Inc., the Company’s wholly owned subsidiary, of which Mr. Gilbert is the sole director.

(b) The following table sets forth as of December 31, 2003, certain information concerning shares beneficially owned by all directors and all directors and officers of the registrant as a group:


		Amount and
	Name of	Nature of
	Beneficial	Beneficial	Percent
Title of Class	Owner	Ownership	of Class
Common Stock	Arch B. Gilbert	6,295,000		39.6	%

Common Stock $0.001 Par Value	All Officer and Directors as a Group (1 person)	6,295,000		39.6	%

Item 13. Certain Relationships and Related Transactions.

The Registrant shares the offices of Arch B. Gilbert, consisting of approximately 1,400 square feet, for which it paid total rent in the year 2003 of $15,600. The Registrant also reimbursed Mr. Gilbert for 50% of his office and administrative expenses for the year ending December 31, 2003 and for direct out-of-pocket expenses incurred on behalf of the Company. The total amount of such reimbursement was $18,707. For the year 2003, Arch B. Gilbert, A Professional Corporation, whose sole stockholder is the President of the Company, was paid $82,500 for legal services rendered.

In 2004, Mr. Gilbert may perform legal services on behalf of the Registrant although there are no present plans, agreement or understandings in regard to any such legal services. If any such legal services are performed by Mr. Gilbert on behalf of the Company, he will be compensated at his usual hourly rate.

In 2003, Mr. Gilbert’s wife performed consulting services for the Company for which she received total cash compensation of $36,000.00.

The Company is not informed as to whether payments made to Mr. Gilbert and his wife were on terms as favorable as the Registrant might have obtained from unaffiliated parties.

On April 1, 1999, the Company sold Arch B. Gilbert 2,000,000 unregistered shares of Common Stock at a price of $0.08 per share. Mr. Gilbert gave the Company a five year non-recourse $160,000 note for such shares. The note provides that interest

of 6% per annum will be payable annually and the entire balance and any accrued interest will be payable on April 1, 2004.

PART IV

Item 14 Principle Accounting Fees and Services

The Company has only one director, Arch B. Gilbert. He also serves as the Company’s president and chief executive officer. Mr. Gilbert pre-approves all services of Weaver and Tidwell, L.L.P., the Company’s principal accountant. Aggregate fees billed by Weaver and Tidwell, L.L.P. for 2003 and 2002 were as follows:


	2003		2002
Audit fees	$	41,050	$	35,900
Audit related fees		—		—
Tax fees (compliance)		10,030		9,200
All other fees (health care consulting)		—		3,700


	$	51,080	$	48,800

Item 15 Exhibits, Financial Statement Schedules and Reports on Form 8-K.

(a) 1. Financial Statements.

The following financial statements of the Company are included in Part II, Item 8:


		Independent Auditor’s Report

		Consolidated Balance Sheets December 31, 2003 and 2002

		Consolidated Statements of Operations for the Years Ended December 31, 2003, 2002 and 2001

		Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2003, 2002, and 2001

		Consolidated Statements of Cash Flows for the Years Ended December 31, 2003, 2002, and 2001

		Note to Consolidated Financial Statements

		Supporting Schedule II

2. Financial Statement Schedules.

Financial Statement Schedule II is included in Part II, Item 8. All other schedules are omitted because they are not applicable, not required or because the required information is included in the financial statements or the notes thereto.

3. Exhibits.

The exhibits listed in the accompanying index to exhibits are filed as part of this report.

(b) Reports on Form 8-K.

No reports on Form 8-K were filed during the last quarter of the period covered by this report.

INTERWEST MEDICAL CORPORATION

INDEX TO EXHIBITS

ITEM 14(a)


Exhibit	Description	Page
3	Articles of Incorporation, Bylaws	*

4	Instruments defining the right of securities holders, including debentures	*

10	Material contracts	*

14.1	Code of Ethics	*

31	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Exchange Rule 13a-14(a) as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002	*

32	Certification pursuant to 18 U.S.C. Section 1350 pursuant to 906 of the Sarbanes-Oxley Act of 2002	*

*Pursuant to Rule 12b-32 under the Securities Exchange Act of 1934, the Registrant hereby incorporates by reference its Registration Statement No. 2-82655 on Form S-18 and Exhibits to such Registration Statement, and which contains these documents which are also required to be filed as Exhibits to this Form 10-K.

SIGNATURES

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


				INTERWEST MEDICAL CORPORATION

		By:		/s/ Arch B. Gilbert

				Arch B. Gilbert, President
				Chief Executive Officer,
				Chief Financial Officer and Chief Accounting Officer

Date: January 20, 2005

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


By:		/s/ Arch B. Gilbert

		Arch B. Gilbert, Director

Date: January 20, 2005

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INTERWEST MEDICAL CORP 10-K/A