Mr. Bolgiani is a director of VASO Medical, Inc., a public
company engaged in the business of medical devices.
SEC Investigation- -----------------
In February 1995, the Company received a subpoena duces tecum by the
broker-dealer branch of the Northeast Regional Office of the Securities and
Exchange Commission ("SEC") requesting certain documents from the Company
pursuant to a formal order of private investigation in connection with possible
registration and reporting violations. The Company has cooperated with the
investigation. As stated in the subpoena, the "investigation is confidential and
should not be construed as an indication by the SEC or its staff that any
violations of law have occurred, nor should it be interpreted as an adverse
reflection on any person, entity or security." The Company is not aware of any
activity concerning this investigation since April 1998, and is unable to
establish the likelihood of an unfavorable outcome or the existence or amount of
any potential loss.Litigation- ----------
In May 1996, an action was commenced in the Supreme Court of the State of
New York, Nassau County, against the Company, its directors and certain of its
officers and employees for the alleged breach of an agreement to appoint a
non-affiliated party as its exclusive distributor of EECP systems. The complaint
seeks damages in the approximate sum of $50,000,000, declaratory relief and
punitive damages. The Company denies the existence of any agreement, believes
that the complaint is frivolous and without merit and is vigorously defending
the claims as well as asserting substantial counterclaims. This matter is in its
preliminary stages and the Company is unable to establish the likelihood of an
unfavorable outcome or the existence or amount of any potential loss.
In May 1998, an action was commenced in the New York Supreme Court, Suffolk
County, against the Company and other parties. The action seeks damages in the
sum of $5,000,000 based upon alleged injuries resulting from the alleged
negligence of the defendants in the use of the Company's product. The Company
and its insurer believe that the complaint is frivolous and without merit and
are vigorously defending the claims. Furthermore, management believes that this
action is fully covered by insurance. This matter is in its preliminary stages
and the Company is unable to establish the likelihood of an unfavorable outcome
or the existence or amount of any potential loss.
In February 1999, an action was commenced in the Massachusetts Superior
Court, Essex County, against the Company. The action seeks damages in the sum of
$1,000,000 based upon an alleged breach of a sales contract. The Company
believes that the complaint is frivolous and without merit and is vigorously
defending the claims. This matter is in its preliminary stages and the Company
is unable to establish the likelihood of an unfavorable outcome or the existence
or amount of any potential loss.<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
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OPERATIONS |
