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Microcap & Penny Stocks : IMDS nasdaq bulletin board

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To: Dan O who wrote (3787)	12/5/1999 9:35:00 PM
From: Dan O	of 4122

Misleading NASDAQ statements: Note the following timeline and how it illustrates how management mislead shareholders: 3/24/96 Application was filed with the NASDAQ At some unknown point between 3/24/96 and 2/5/97, the application was rejected due to concerns about a minority shareholder. An appeal was made. Deb Obrien of Investor relations continued to post on the message boards as if the application was pending and was held up by new NASDAQ regulations. No attempt was made to inform the shareholders of the initial denial (a material event). In fact, on 9/3/96, she even made the statement that "Our application to NASDAQ has not been withdrawn or denied - it is still pending". 2/5/97 NASDAQ granted CONDITIONAL approval 2/6/97 IMDS issued a press release stating that they had received approval but the release FAILED to mention that there were conditions (a material omission). 2/7/97 Deb Obrien posted on the AOL message board that she will post the trading date as soon as NASDAQ informs her. 2/24/97 Obrien posted on AOL that NASDAQ has "not given us a date", implying that the issue was "when", not "if". 3/31/97 A Barron's article stated that the application was denied and that an appeal WILL be denied. This was the first time shareholders were told that a denial ever occurred. The article quoted a source at NASDAQ which said the appeal will be rejected. 3/31/97 Obrien posted on AOL that the Barron's article was incorrect. While it WAS incorrect about the NASDAQ being determined to deny the application appeal, it was quite correct in stating that the application had been denied in the first place (which investors were not informed of). Despite this, Obrien stated "The Barrons article was incorrect, we have been accepted and as of Wednesday the 26th NASDAQ was reviewing to decide when we will actually be listed." Note that she says "when", not "if". This misstatement was aggravated by a press release on 3/31 stating that NASDAQ's decided that the application "be accepted with conditions. As of this date the Company has complied with the conditions." Investors had not been previously informed of conditions - material omission. 4/3/97 Obrien posted on AOL "We were never denied - end of story." This statement is obviously false since the denial has now been admitted by IMDS in the 1998 10K.. 4/7/97 Obrien admitted in an AOL post that the conditions were made BEFORE the application was accepted. This raises the obvious question why they were not disclosed to investors. 4/7/97 Barrons clarified their article stating that the NASDAQ spokesman they quoted apparently didn't realize an appeal had been decided in the company's favor on Feb 5. The clarifying statement by Barron's did not answer why the company failed to disclose the initial rejection or why they did not disclose that the recent approval was CONDITIONAL. 2/11/98 A press release stated that approval had been received with the condition that the stock price be above $4 per share and that a minimum tangible net worth be demonstrated. 5/11/98 The conditional listing period expired. An ugly history. Do you feel like you were dealt with fairly?

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